AP Perspectives—The View From Via Del Mirlillo: Leadership = Risk = Leadership

Darren Walker, the president of the Ford Foundation, wrote an interesting and instructive opinion piece in the October 20, 2024 New York Times. His title? “There Is No Leadership Without Risk.” In this article he presents what he believes is the growing crisis of leadership. What is this crisis? Mr. Walker states:

“Hardly a day passes without a fellow leader lamenting—in sidebar, or green room, or private-lunch conversations—the myriad ways in which our culture actively discourages the courage that is essential to effective leadership.” He continues: “Leadership is an action, not a title. And many of our leaders are paralyzed by broken, perverse incentives that impair their abilities to fulfill institutional missions and mandates.” 

Over the years as a development staff member, consultant, speaker, and teacher, I’ve seen the effects of this crisis of leadership in many organizations. Board members, senior staff, and those further down in the ranks are afraid to take bold stands, say what they really think, and clearly push for necessary ways forward. This usually is related to their beliefs that the risks of doing so, both for the organization and for themselves, are too high. Part of my job as a consultant was often to convince them otherwise. Yes, you can achieve that fundraising goal, and here’s why and how. Yes, you need to make some major changes in how your organization is seen by your donors and publics, and here’s why, plus some needed possible changes. I often had to show them the risks were not what they believed.

But what are real risks as opposed to the perceived risks? Did you know that you're 15 times as likely to be killed by a falling coconut as a shark? There’s a perceived risk (the shark) versus the real risk—so don’t run out of the water and sit under a coconut tree! I’ve often done presentations based on the concept of black swans, all based on Nassim Nicholas Taleb’s book “The Black Swan: The Impact of the Highly Improbable”. Europeans for centuries believed all swans were white. It was only after explorers ventured into Asia did they discover there are also black swans. And what is a “Black Swan” event? According to Taleb, a “Black Swan is a highly improbable event that is unpredictable, has mass impact, and creates an explanation that makes it appear less random and more predictable than it was.”  

What’s an example of a fairly-recent Black Swan? Imagine you’re a development officer of a small theater company. Your theater is supported by ticket sales and contributions of patrons. You have a board-approved five-year strategic plan, which started being implemented in 2019. The COVID-19 pandemic arrives, with the resulting total lockdown of your theater. No ticket sales, a dropping off of your regular donors, and your strategic plan with the fundraising goals is blown to pieces. A real Black Swan.

If you follow the above so far, you’re probably seeing how leaders and all of us can easily be paralyzed by fear of risk. It’s out there, it’s often very real, and the possibilities are unknown. But both Taleb and Walker believe there is a positive side to acknowledging what risk is real and still moving forward. Taleb says you shouldn’t attempt to predict Black Swan events or make generalizations based on them, but seek to build robustness to negative events and an ability to exploit positive events. Robustness basically means you acknowledge the unknown, the unpredictable, the risk, and move forward. While supposedly the Chinese characters for “crises” mean “danger” and “opportunity”, in fact they mean “danger” and “crucial point”. And the word “risk” itself is derived from the Italian word “to dare”. In a crisis or any high-risk situation what are you going to do? 

Many strategic plans I’ve seen fail to account for the possibilities and the unpredictable and spell out alternative ways to proceed so everything moves forward. Who could have predicted the COVID-19 pandemic? Very few people. But could an unknown Black Swan event affect attendance at our theater example? Of course. Possibly the strategic planning process should focus not on what could cause a drop in attendance (an unpredictable black swan), but alternative steps that should be taken if attendance does start to drop. 

Here are some quotes I’ve used in my presentations on the topic of risk:

“There is no security on this earth. Only opportunity.” – Douglas MacArthur
“Creativity requires the courage to let go of certainty.” – Erich Fromm
“Don’t be afraid to go out on a limb – that’s where the fruit is.” – H. Jackson Browne
“Twenty years from now you will be more disappointed by the things you didn’t do.” – Mark Twain

In my Black Swan presentations I maintained that, as Walker says, most organizations are risk-adverse. They often function in terms of perceived risk rather than real risk. They imagine, present, and discuss all the possibilities of what can go wrong. Yes, the unlikely, the Black Swans, can happen. But Taleb’s use of the term “robustness” to negative events means that forward momentum, through building on positive events, can be maintained. Taleb also points out our tendency to base our estimation of risk on past “certainties”. As an example, he mentions that, of the 500 largest companies in 1957, when his book was published only 74 were still on the list. He later states we tend to remember the data that supports our beliefs and try to reduce the true complexity, and we try to distill past events into a way we can predict the future.

So, what can we do? Walker clearly states, “Indeed, effective leadership requires managing nuance and complexity, seeing all sides of an issue from the perspective of every stakeholder, and then setting a course, and communicating with clarity, consistent with common values.” In my Black Swan presentations and elsewhere I drew some lessons from the discussions of risk and leadership. These included:

• Focus on the big picture first.
• Don’t look for the precise and local. Don’t be narrow minded. Here I used a Yogi Berra quote: “You’ve got to be very careful if you don’t know where you’re going, because you might not get there.”
• Understand the difference between perceived risk and real risk.
• Plan and act based on real risk.
• Accept the complexity of the real world, your organization’s audiences, and your organization. 
• Seize any promising opportunity or anything that looks like an opportunity – maximize exposure to opportunities and increase exposure to serendipitous encounters.
• Take what look like your best long shots.
• Create success where there is a high perceived risk but a low actual risk. Success can breed success. 
• Build a social epidemic (an idea derived from Malcolm Gladwell’s book “The Tipping Point”)

Finally, to close, I leave you with this quote from William Shakespeare, "Our doubts are traitors, And make us lose the good we oft might win, By fearing to attempt".