Taking risks Flashcards
Why and how do we take risks in organizations?
M&Z: Psychological propensity explains only partially
M&Z: Insensibility to probabilities and sensibility to contexts
M&Z: Pressure to succeed encourages managers to take calculated risks (very low risks)
This is problematic because:
M: Taking risks is important to develop preferences
Mc: Failing, an inevitable part of taking risks, is inevitable and a conduit to learning, if done intelligently
Therefore, it is advisable to allow people to:
M: Come up with ideas: Sensible foolishness (temporarily suspend the assumptions of pre-existing goals)
M: Allowing us to do it: Playfulness (temporally suspend the need for consistency)
Mc: Fail intelligently: clarify what is failing, then fail fast and cheaply, and build an organization that accepts, celebrates and learns from failures
