Malcolm Gladwell on operational vs. social risk-taking

I am a huge fan of Malcolm Gladwell. I know there are many who question some of his facts, and theories--but I feel no one can question his ability to make us think.

And that's what makes me a huge Malcolm Gladwell fan. I like when others make me think. So, it was with excitement that I listened to Gladwell at the World Business Forum last week.

If you've ever heard him speak, you know of Gladwell's capacity to tell a story--his ability to entertain and captivate you with a seemingly common interaction between people, and then his ability to wow you with a big idea that he's so delicately served up you barely knew you had been convinced to love his presented theory.

Last week, the big idea I was captivated by was Gladwell's believe that "risk taking" is misunderstood--or at least ill-defined.

Clearly, great leaders take risks, and risk failure in order to achieve great things, and lead the people who execute big ideas.

But Gladwell believes there are two types of risk-taking.

Operational Risk Taking: e.g. spending R&D money on a new product, or expanding into new markets

Social Risk Taking: i.e. when failure could result in diminished reputation

Gladwell hypothesizes that the most effective risk-taking leaders take LOW operational risks--meaning they clearly understand failure and how to minimize it, but take HIGH social risk--where failure is not as much about the financial risk to a company than about looking bad in front of others if you fail.

He says poor risk takers don't take social risks, but may inflict business suicide by taking operational risks (i.e. "bad decisions") that create too much chance for failure.

Definitly something to think about. Thank you Malcolm.

For more on this, you may want to check out The New Yorker

(photographer's credit: Dov Friedmann)

blog comments powered by Disqus

The Featured Five