Do You Value Innovative Risk-Takers?

November 5, 2010

“Pearls don’t lie on the seashore. If you want one, you must dive for it.” – Old Chinese Proverb

Once upon a time, I worked for a company whose message to us employees was, “We value risk-takers.” It was clear from this oft-repeated message that our senior management team understood that achieving greater growth meant that playing it safe – always seeking to avoid failure – equates to missing opportunities.

I was a couple of years out of college at the time, and it was exciting to be working for a profitable company that wanted to continue its successful streak. I was intrigued to see how this valuing of risk-takers would play out.

It was 1984 (gulp!), and a systems director for our investments division wanted to build a local area network for the entire department of high-end IBM PCs he was purchasing. This systems director had a vision of real-time access to information that could be shared and modeled within this network. He was aggressively pursuing his vision despite our company’s complete lack of experience in this area; gutsy and admirable – and by all appearances this was a calculated risk, not a reckless one.

Unfortunately, it wasn’t long before the risk began turning into a problem. The local area network wasn't functioning. Actually that’s not completely fair. It worked for a while and then it stopped working. Our group got involved because this risk was starting to look like an abject failure, and an expensive one at that.

The IT group that I was a part of at the time was this system director’s last shot. Despite the fact that we weren’t included as part of the technology selection process (and should have been), we dove in. We read the manuals provided by the vendor. We swapped out network adapters and network cabling, we reduced the size of the network and gradually brought computers on one at a time until something failed. Eventually a pattern emerged.

It was impossible to run all of the computers on the network all of the time. Once we reached a critical mass, firing up just one more computer would cause all of the other computers attached to the network to lock up. The computers needed to be re-booted so that they could start functioning again.

We worked with the vendor, pressuring them to send an expert out, which they did. This “expert” got off the plane reading the same manuals that we already had access to. We quickly learned that the vendor had purchased the local area network technology from another company – but not the technologists. And we had already tried everything that he could think of. We thanked him for taking the time to fly out and sent him packing.

Fortunately, we had another ace up our sleeves: a wily ex-Air Force veteran who was able to determine that the electrical length of the network was a part of the problem. He rigged up a variable resistor device to attach to the ends of the network so that we could tune the network based on the total length and number of devices attached. This was step one.

We then had to figure out which computers needed to be powered on at all times to keep the network running. If any one of these were turned off at any time, the networking software would lock up all of the computers attached to the network. It was a trial-and-error, manual activity to walk around turning the computers one by one to determine where the “key” computers were located each and every time new computers were added or removed.

Pop quiz: You value risk takers, so what do you do in a situation like this?
  1. Keep plugging away until someone from IT finds a way to make everything work reliably with the equipment that you have.
  2. Recognizing the potential of the vision (which hadn’t changed from the initial approval of the project), consider options like changing local area network vendors to help realize the vision, just in a slightly different way.
  3. Fire the systems director for taking a chance and failing.
If you guessed Option 2 – bingo! That’s what I would have selected. Unfortunately, that’s not what happened in real life.

As you might have guessed, our final solution didn’t come overnight. It took weeks of work. In the interim, someone somewhere was dissatisfied that the risk wasn’t working out. The company that valued risk-takers had forgotten to mention a condition about taking risks: failure was not an option. An important tidbit to omit! By the time we had figured something out – albeit not a perfect solution – the systems director had been shown the door and the project was scrapped.

So much for leadership support…

The local area network was unplugged, and the utilization of the personal computers was significantly reduced for the entire division, with much of the processing remaining on the corporate mainframe. In fact, the investments division became technology-adverse for an entire decade, spending precious little on technology advancements from that day forward. No one was about to approve any more “risks.”

And the company that boasted about valuing risk takers? After a while, this slogan faded away. A few years down the road the company went public and started mumbling about having the “pride of an owner.” (Can you guess where all the stock options were distributed?)

Innovation requires some element of risk, and leadership should partner with its employees in the creation of a culture of innovation and calculated risk-taking. If you want innovation, people must feel safe and supported, not thrown under the bus when things go wrong (and something will). As former Nike advertising VP Scott Bedbury said in a Newsweek article about Nike, "The key to the company's success is its willingness to embrace a culture of screw-ups. It does learn from its mistakes."