By Nneka Orji

“Only those who risk going too far can possibly find out how far they can go.”  T.S. Eliot

We seem to be encouraged to take risks in many aspects of life in the hope or expectation of reaping greater rewards; from high-risk, high-return financial investments to extreme sports for “the thrill”. In our careers, we are also challenged with taking risks to increase the likelihood of successful career progression. Playing it safe, we’re told, will not differentiate us from our peers.This is welcome advice for some; taking risks is second nature. However for others, risk aversion comes more naturally. The definition of risk is “the possibility that something bad or unpleasant (such as an injury or a loss) will happen.” Every time we take a risk, we open ourselves up to an increased chance of something going wrong. This is hardly an appealing prospect, so why then do some people see risk as a prerequisite for success?

Risk as a prerequisite to success
To answer this question, we only need to look at those who have been successful and how they have approached risk. From political to sporting successes, it is clear to see that risk was not just one of many factors of success, but a necessity:

“Only those who dare to fail greatly can ever achieve greatly.” Robert F. Kennedy

“Progress always involves risk; you can’t steal second base and keep your foot on first.” Frederick Wilcox

It seems that for people to be successful, instead of seeing risk as being vulnerable to failure, they seize risky opportunities as a means of learning not to be scared of failure. The Huffington Post’s “7 reasons why risk-taking leads to success” also include seizing unforeseen opportunities, learning career-changing lessons and standing out from the crowd as reasons to take risks. The article highlights successful women who embraced risks, including Arianna Huffington (President and Editor-in-Chief of The Huffington Post), Heather Rabbatts (first female director of The Football Association), Sandra Peterson (CEO of Bayer CorpScience). Some of these women have been interviewed by theglasshammer.com previously on the topic, with Mrs Clinton’s famous learning that she had to “Dare to compete.”

With such prominent women promoting risk taking as a prerequisite to success, it isn’t too hard to see why many now see risk as essential to career advancement. But what happens if we are risk averse by nature?

Women – are we really more risk averse?
Previously, risk was viewed as an inborn trait – remaining static regardless of experiences or environment. If you were born a risk-taker, you remained a risk-taker in all aspects of and throughout your life. However more recent studies show that this is not an accurate reflection of risk. Research, such as the paper included in the 2012 Social Psychological and Personality Science journal, show the importance of environment and “culture of honour” in influencing an individual’s appetite for risk. Other papers also show that discrimination, rejection or the presence of women can all increase the chances of throwing caution to the wind and taking risks.

According to a paper by Bernd Figner and Elke Weber, it’s not just the environment that plays a role in the way we approach risk; “risk taking is not a single trait but is a behavior influenced by characteristics of the situation (what the decision is about and to what extent it engages affect vs. deliberation), the decision maker (age and gender), and interactions between situation and decision maker.”

Does gender matter?
The concept of gender differences when it comes to risk appetite is not new. Stereotypes have led to the belief that women are less likely than their male peers to take risks. These beliefs are supported by studies such as that led by the British Psychological Society. Geoff Trickey, study author, found that women were “Cautious Carols” at work and twice as likely to be wary and prudent compared to male colleagues.

Julie A. Nelson, author of the 2012 Tufts University paper, believes that the preconception that women are more risk averse than men needs to be challenged. Dr. Susan Marchant-Haycox agrees that it’s not black and white: “it’s the nature and perception of the risk which accounts for the sex differential”. While most research supports the case that men take more financial risks, there is increasing evidence to suggest that women take more career-related risks, including career changes, in an effort to seize opportunities they feel are more commonly given to their male peers. Mara Mather and Nicole R. Lightfall also highlight the effect of stress on risk taking and the gender differences in risk appetite; men tend to take more risks and adopt the “fight-or-flight” response under stress, while women tend to focus on bonding and developing relationships.

The message here is not that one gender is better than the other in taking risks, rather there needs to be a gender balance across any risk taking or decision making panel or board. Although a study by the German Bundesbank showed that female presence increases the risk appetite of male colleagues, there is evidence to show that both risk prone and risk averse men and women can work effectively to provide a balanced view for calculated risk taking – required for organisations to succeed.

Dealing with risk
While risk taking tends to be viewed as an intellectual exercise, a recent article in The New York Times argues that the physical experience associated with risk is just as important. John Coates, who authors the article, shows that when there is continuous volatility on the trading floor, the traders’ cortisol levels increase while risk appetite decreases by up to 44%. The reverse is true – spikes in volatility result in reduced cortisol levels, increased dopamine and testosterone, and an increased risk appetite.

The characteristics of the environment on a trading floor are similar to those we see in our careers. In our information rich and constantly changing world, we need to be mindful of how we are reacting physically and how that in turn determines our approach to risk. Learning how to deal with risk is crucial to our careers and avoiding it could potentially lead to missed learning opportunities and career defining moments.

As existential philosopher and theologian Paul Tillich says; “He who risks and fails can be forgiven. He who never risks and never fails is a failure in his whole being.” We must embrace risk, but it must be done in the right environment in order to be effective.