No matter the organization, some amount of risk leadership needs to be assumed to move forward and take on new and exciting initiatives.
For nonprofits, risk is more complex and takes on another dimension as there is more to lose in terms of social impact and social value, according to a report by the Nonprofit Quarterly. Risk leadership needs to be assumed but not be risky in its endeavors that it hurts the entire organization or the direct group it is trying to reach.
Six members of Forbes Nonprofit Council gave some insight into how your organization can build risk leadership into its entrepreneurial strategies. Here’s what they had to say:
1. Celebrate Risk
Every organization needs risk leaders, innovators and disruptors! Modeling risk leadership at the senior level and sharing risk success stories shows that such thinking is valued and encouraged. And remember that risk leadership doesn’t just occur at the top, so transitioning to a flat organization -- which is designed to hear ideas from all levels -- might be a consideration. - Peggy Smith, Worldwide ERC
2. Start At The Top
Most risk aversion comes from the CEO or the board. It's up to them to set the level of risk that they will be comfortable with and clearly communicate it to the staff. That way, the staff can be entrepreneurial up to whatever "hard stop" the leadership has set. - Blake Pang, United Ways Serving Linn, Benton and Lincoln Counties
3. Establish Best Practices
It's important to define how to undertake risk leadership and within what boundaries, so that the organization knows how far they can make those leaps to be innovative and entrepreneurial. Concrete examples and a set of best practices also help. - Gloria Horsley, Open to Hope
4. Ensure Access To Capital To Spur Innovation
While it seems that nonprofits tend to be risk-averse, limited access to capital stifles creativity and innovation. When operational needs are met, organizations are more willing to take risks. Boards of directors and executives must increase the availability to unrestricted funds through grants, philanthropy and fundraising before we witness a balance between risk leadership and management. - Charles A. Archer, The THRIVE Network
5. Embrace Reasonable Risk
Organizations may survive with a strategy that minimizes risk, but to thrive, a reasonable level of risk must be embraced. Providing front-line employees and volunteers the leeway to try new things and be public about their support for the group may open up the group to the risk of mistakes, but it also opens the door to potential breakthrough successes. - Roy Speckhardt, American Humanist Association
6. Be Brave
Being a global leader requires constant innovation. We encourage strategic risk-taking, aligned with our core value of courage. This helps us move faster to achieve our mission of water and sanitation services for everyone, forever. We make strategic investments in tested areas for faster "big bang" results. Our quarterly risk reviews keep us on track to move quickly and manage risk appropriately. - Eleanor Allen, Water For People
