Unlocking the Power of Risk and Understanding 8 Risk Types on Your Team
Do risk and reward go hand in hand, or does reward emerge as an outcome of taking risks? Imagine a scenario within your team where one member is a risk-taker, characterized as 'carefree,' while another is more risk-averse, categorized as 'wary.' Now, the team faces a crucial decision, whether it's about a product launch or structuring a presentation. In this setting, the carefree individual is eager to dive into action, while the wary team member advocates for a more cautious approach.
Team dynamics play a crucial role, and these differing risk preferences can tip the balance or lead to a standstill. Consequently, emotions can run high, and effective communication can become a challenge. The feeling of being stuck often has nothing to do with talent or skill. It stems from the varying risk tolerance of the team members. Risk introduces a unique emotional dimension, akin to the impact of change. Each one of us possesses a distinct risk threshold, and when that threshold is challenged, emotions, anxiety, and fear intensify, influencing our perception of risk in a given situation.
Understanding the 8 Risk Types
Excitable:
This risk type combines impulsivity and attraction to risk with moments of distress and regret. Excitable people fluctuate between enthusiastic optimism and pessimistic negativity, often responding emotionally to events.
Intense:
People falling into this category tend to be anxious and worrisome, always expecting the worst. They take decisions personally and can experience intense and drastic mood swings.
Wary:
Characterized by self-discipline and a focus on risk, wary people are cautious, organized, and prioritize security. They seek predictability and may struggle with making decisions.
Prudent:
Those in this category exhibit high self-control, preferring established procedures and a prudent, conservative approach. They are cautious and prefer familiarity.
Deliberate:
Combining calm self-confidence with caution, these deliberate people are well-organized and systematic, balancing risk acceptance with a desire for preparation.
Composed:
Cool-headed and unemotional, composed individuals remain optimistic and manage stress well. They are not overly impulsive or systematic.
Adventurous:
Adventurous types combine impulsiveness with fearlessness, often disregarding convention. Their decision-making is influenced by a lack of anxiety and impulsivity.
Carefree:
Disliking routine and authority, carefree individuals may appear reckless and impulsive. Their objectives may seem vague due to a lack of preparation.
These risk types are derived from the "Compass Risk Type Indicator" by Multi-Health Systems. Using this tool, you can assess the risk types of your team members and gain a comprehensive view of your team's risk profiles. By understanding these risk types, leaders can navigate team dynamics more effectively and leverage the unique risk profiles of each team member.
Nearly every decision involves an element of risk, and various factors influence an individual's willingness to take risks. As leaders, it is essential to be aware of how team members interpret and respond to risk, starting with self-awareness.
So, next time your team faces a decision-making deadlock, consider these risk types and explore whether differences in risk approach could be impacting the team’s productivity and results. Understanding and embracing these differences can be the key to unlocking your team's full potential.