Best leaders risk failure to effect great change

Published in the November 6, 2009 edition of Columbus Business First

We expect leadership but do we support it when its boldness confronts our comfort zones?

The Columbus Foundation has spent much of this year exploring leadership and how to teach and encourage it.  In a survey it asked nonprofits, donors, and community leaders to define leadership.  The respondents identified characteristics they looked for in leaders and actions they believe define leadership. 

The survey response that caught my eye was the expectation that leaders take calculated risks.  The willingness to take risk is one of the most underappreciated attributes of real leadership. 

A leader must have a vision.  With very few exceptions, a meaningful vision challenges the status quo.  It tries something new.  It responds to new demands.  This is a risk.

Take the current insistence on greater transparency.  Obviously a worthwhile community objective, transparency lets the broad public into a wider array of issues within a nonprofit:  finances, budgets, program descriptions, compensation, benefits, board composition, program costs, corporate structure, and related organizations. 

No organization can please everyone and each additional area expands the potential for inquiry, criticism, and interference.  With this expands the likelihood that the leader will spend more time on public relations and less time on leading and managing the organization.  This is a risk.

Leadership means adapting the organization to changing community need.  The latter is often as much a perception as a fact and adaptation brings the risk that others will disagree that needs have changed or that the adaptation is appropriate.  For example, many believe that the current environment calls for retrenchment in the nonprofit sector through mergers and collaborations.  Experience has taught that mergers have a low likelihood of success.  This is a risk.

Leadership means balancing the demand for growth with the need for sustainability.  Denying services in order to build a safety net to be used during economic downturns is routinely criticized when the economy is expanding.  At the same time, cutting budgets during economic downturns because money was not set aside earlier is equally criticized.  Balancing the two often brings criticism at both ends.  This is a risk.

Are we – as patrons, donors, board members, opinion leaders – by our actions supporting or penalizing meaningful risk-taking and true leadership?  Addressing and responding to change requires courage and a willingness to take risks.  While these words seem harmless, the reality is that taking meaningful risk means accepting the possibility of failure.

Failure and its relation to leadership are rarely discussed because we associate leadership with success.  This is problematic if we expect leadership to result in dynamic organizations. 

Expecting our leaders to bat 1,000, never slipping or failing outright, will never support risk-taking leadership.  Is calculated risk defined as only choosing initiatives that are highly likely to succeed?  Do we insist that success also mean that the initiative will be completed by a certain date, or meet specified criteria?  Bold endeavors and significant changes in direction are not likely to survive these calculations.

The most demanding definition of a leader is a person who works hard for success but who is also willing to fail.  More bluntly, a leader is willing to risk getting fired in order to try something new or different. 

It is no surprise that the average tenure of CEOs of public companies or presidents of universities has shortened to less than 10 years.  Leaders in these areas must take risks in order for their organizations to thrive, and the consequence is that the risks accumulate over time to a point when they are asked to move on.  Ironically, those that don’t take risks and are satisfied with the status quo are often the leaders with the longest tenures. 

Parker Palmer provides valuable insight on this issue of risk and leadership in his book The Active Life. 

“Our culture’s fearful obsession with results has sometimes, ironically, led us to abandon great objectives and settle for trivial and mediocre ends.  The reason is simple.  As long as ‘effectiveness’ is the ultimate standard by which we judge our actions, we will act only toward ends we are sure we can achieve.  People who undertake projects of real breadth and depth are very unlikely to be ‘effective,’ since effectiveness is measured by short-term results….But people with small visions will win the effectiveness awards, since those projects are so insignificant that they can almost always ‘succeed.’”

We must ask ourselves if we back the safe leader who makes constituents feel good, is comfortable with the current convention, and keeps the boat upright, but who never reaches for big ideas, bold change, or challenges the status quo. 

Or are we willing to support a leader who bats only 300, striking out every so often but occasionally hitting a few home runs and, by his or her risks, helps some other organizations or initiatives score a few runs too?

How we answer these questions will determine the calculation of the calculated risks we want our leaders to take.

Allen J. Proctor was formerly chief financial officer of Harvard University and is the author of Linking Mission to Money® Finance for Nonprofit Board Members. He runs a nonprofit consulting business in Central Ohio. www.proctorconsulting.org

Copyright 2009. Reprinted with permission, Business First of Columbus Inc.