Source: Gene Calvert, Highwire Management, Jossey-Bass, 1993. Pp. 41 - 46.
Reprinted with permission.
Answer as Agree / Disagree (answers follow)
1. Taking management risks makes good sense only in the absence of acceptable alternatives.
2. I generally prefer stimulation over security.
3. I have confidence in my ability to recover from my mistakes, no matter how big.
4. I would promote someone with unlimited potential but limited experience to a key position over someone with limited potential but more experience.
5. Anything worth doing is worth doing less than perfectly.
6. I believe that opportunity generally knocks only once.
7. It is better to ask for permission, than to beg for forgiveness.
8. Success in management is as much a matter of luck as ability.
9. I would choose a three-thousand-dollar annual raise over a ten-thousand-dollar bonus, when I had about a one-in-three chance of winning the bonus.
10. I can handle big losses and disappointments with little difficulty.
11. If forced to choose between them, I would take safety over achievement.
12. Failure is the long road to management success.
13. I tolerate ambiguity and unpredictability well.
14. I would rather feel intense disappointment than intense regret.
15. When facing a decision with uncertain consequences, my potential losses are my greatest concern.
One point for each of the following questions on which you agree:
2, 3, 4, 5, 10, 13, 14
One point for each of the following questions on which you disagree:
1, 6, 7, 8, 9, 11, 12, 15
This survey is a general tool to stimulate reflection and thought about one's risk taking style and beliefs. It tends to indicate preferences and is NOT a rigid, diagnostic instrument. Someone giving a pro-risk response on all inventory items would, according to Gene Calvert, tend to agree with the following thoughts and assumptions about risk-taking.
1. I take risks by choice, not only by necessity; chosen risks usually benefit me much more than forced ones. Risk taking is associated with success.
2. Security is a myth; professional stimulation (challenge, growth or excitement) is worth the cost.
3. A way out of almost any risk-taking problem can probably be found or created, including a way to survive "the worst," if it actually happens. I have skills to deal with risk.
4. Conventional personnel management practices like promoting someone on the basis of past experience , generally produces average results, if more certain performance. Unconventional management practices like promoting someone on the basis of potential produce unconventional results such as outstanding, if sometimes less certain, performance.
5. Risk taking is typically a fast-moving, imperfect, and make-it-up-as-you-go process, no matter how well planned or implemented. Waiting until I risk near-perfectly means seldom risking or missing the best window of opportunity.
6. No matter how many times my risks fail, there will always be another opportunity to risk again and perhaps succeed that time. The ratio of wins to losses matters little in the end. What counts most is the net total value of wins compared to losses within an acceptable period of time (a budget cycle or an average time span at a management position or level).
7. While getting permission is always a smart move, some management risks have to be launched without prior approval. If it succeeds, no apologies are needed. If it fails and was legitimately and responsibly undertaken, I will probably be forgiven anyway.
8. Luck always helps, but I create my own luck by taking risks and betting on myself. My ability contributes to making things happen the way I want them to happen. "You have to play the game to win." For managers, that means taking risks and not depending on random circumstances, events or others.
9. The bigger the risk, the bigger the reward -- go for the riskier choice if it offers a greater payoff. I believe in my ability to produce results, especially when I have significant control of the outcome, as with my job performance.
10. Failure and loss should be viewed as learning experiences that will pay off in the long run. What is learned from risk-taking mistakes is what makes risks worth taking. Learning anything new is a matter of doing things wrong until you do them right.
11. For a manager or organization, achieving anything worthwhile requires venturing into unsafe territory. Being satisfied with average achievements, a standard of mediocrity, allows people to stick with the safe, sure and secure. Being dissatisfied with anything less than outstanding, a standard of excellence, forces you to give up the safe, sure and secure.
12. Succeeding as a manager means having a modest share of failures, if only because producing outstanding results requires risk-taking -- many of which will fail. The trick is not to fail catastrophically.
13. Ambiguity and unpredictability complicate risk-taking; those able to cope with these constraints will do well, or at least better than those who can't.
14. You always feel good about yourself when you risk sensibly and boldly, even if you fail, for you sustain and expand your self-esteem and earn the respect of others. Risking and then failing means never having to blame yourself for lacking the courage to try. Better to feel disappointments of risking than the regrets of not risking.
15. When risking, keep one eye on the potential losses and one on the potential gains instead of focusing obsessively on what you can lose. Risk to secure gains as well as to prevent losses.
Source: Gene Calvert, Highwire Management, Jossey-Bass, 1993. Pp. 41 - 46.
Answer True or False (answers follow)
1. Managers who are more successful take more risks than managers who are less successful.
2. Female managers risk differently than male managers.
3. Managers driven to high achievement take high risks frequently.
4. High fear of failure inhibits taking high management risks.
5. Skill matters more than chance in taking large or small risks.
6. Managers who are more experienced take fewer risks than managers who are less experienced.
7. Managers with more authority take more risks than managers with less authority.
8. Managers in larger firms take more risks than managers in smaller firms.
9. Managers with graduate degrees (such as MBA's) take more risks than those not having graduate degrees.
10. Most managers are risk averse.
Source: Gene Calvert, Highwire Management, Jossey-Bass, 1993. Pp. 49 - 58.
1. True; 2. True (maybe);
3. False; 4. False;
5. False; 6. True;
7. True; 8. False;
9. True; 10. True;
Details from the work of Gene Calvert:
1. Managers who are more successful take more risks than managers who are less successful. Over 30 years of research confirm greater risk taking among managers who are more successful. CEO's and COO's, for example, have taken more risks than those not reaching this pinnacle and see themselves as greater risk-takers. They take more risks, and not all their risks turn out well. Yet the successes helped them to move up the ladder faster than their peers. Calvert cites data that support the notion that taking a moderate number of calculated modest-sized risks was characteristic of top executives and that taking balanced risks equates with successful careers. Less successful managers seem to trade off career security over career advancement.
2. Female managers risk differently than male managers. Female managers are believed to take fewer risks by men and by women -- but research doesn't support the reality. Women tend to blame themselves for the failure, while men blame other factors.
3. Managers driven to high achievement take high risks frequently. False. Managers oriented to high achievement take moderate risks and avoid perceived high-risk activities that are beyond their grasp. They also avoid low-level risks that provide a limited sense of accomplishment as well as risks in which chance is likely to determine the outcome. They are not gamblers.
4. High fear of failure inhibits taking high management risks. False. Managers with a high fear of failure are less likely to take moderate risks. Instead, they tend to take big risks (which impose a limited sense of responsibility) or little risks (which cause little anxiety and have small potential loss).
5. Skill matters more than chance in taking large or small risks. False. Your beliefs determine your behavior; there is little reality to perception of specific risk, since you have no real way of knowing. Belief in the power of skill to determine the outcome increases the willingness to take moderate risks and does not influence the willingness to take big or little risks. Conversely, believing chance is the determining factor decreases the tendency to take moderate risks and increases the tendency to take big and little ones.
6. Managers who are more experienced take fewer risks than managers who are less experienced. Managers who are more experienced do take fewer risks and research does not explain why. They may have more to lose, or less to gain or may perceive more negative variables. They may perceive they have less time to recover from a severe mistake or greater responsibilities like elderly parents or kids in college.
7. Managers with more authority take more risks than managers with less authority. Managers with more authority take more risks than those with less authority, possibly having to do with confidence resulting from past successes. Since promotion tends to be linked with successful risk-taking, it is kind of a "chicken and egg" analysis problem of which came first. Those taking careless risks or those who are risk averse rarely become top managers. Mid-managers tend to be more risk averse, especially in the more bureaucratic organizations, which accounts for much of the resistance seen when programs are implemented.
8. Managers in larger firms take more risks than managers in smaller firms. False. Managers in larger firms believe they take more risks than those in the smaller firms but research shows the opposite. Increased decision-making layers or more conservative management methods probably put more constraints on risk-taking as a general rule.
9. Managers with graduate degrees (such as MBA's) take more risks than those not having graduate degrees. They do, but the reasons are not clear. There are no differences between college and high school graduates.
10. Most managers are risk averse. Calvert's research and experience indicate that most managers tend to avoid risks and suggests that a minority of managers take voluntary risks on a regular basis or on a significant scale. He suggests that maybe twice as many believe that they take risks than those who quality by their behavior. Lastly, active risk takers rarely label themselves as such, in part because their risk taking does not seem terribly risky to them. Estimates are that about 30% of Americans are true risk takers who are serious , regular, experimental, rule-bending, entrepreneurial risk takers.
Taken from: Gene Calvert, Highwire Management, Jossey-Bass, 1993. Pp. 49 - 58.
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