Risk and Leadership Risk-Taking Is Somewhat Different

Risk and Leadership

Risk-taking is somewhat different from the perspective of project manager, rather than that of a leader. A leader is dealing with things like vision and strategy; a project manager deals with work breakdown structures and critical pathways. The strategic leader has leeway to take risks, because the details will be sorted out later. The project manager has no such leeway -- the details are critical to the job. The project itself can certainly be based on risks, but the risks inherent in the implementation of a project need to be minimal and calculated.

A project manager does need to exhibit some leadership in the role, but not nearly as much as the strategic leaders in Heifetz, Grashow and Linsky (2009). They discuss leadership in general, and argue that "executives need to set the tone for candor and risk-taking," which again highlights the distinction between the strategic leaders and project managers. To the extent that the project manager has the freedom to undertake risk, it is usually done in a measured way. This is a necessary facet of the job, given that the project manager must work with facts and concrete information as much as possible. Risks relate primarily to uncertainty -- of conditions, of implementation outcomes.

In a world of perfect resources and information, the project manager would not face much risk. However, there are often decisions that need to be made with imperfect information. At that functional level, however, the decision still needs to be made with the best possible information, and if there is a significant chance that the project could be delayed, that information should be relayed up the chain of command. Even at innovative companies, project managers are paid to deliver results and implement strategy, not to freelance. At times, however, there will be the need to put people in positions to which they are unaccustomed. Such risks need to be taken, but because people are critical to the success of most projects, risks need to be mitigated with training, and skills matching.

There is no question that organization culture plays a role in managerial risk-taking. Managers operating in a risk-averse culture will not be viewed well if they take risks and fail, and sometimes will suffer if they take risks and succeed. Other companies are more consequentialist in their approach to business, and expect managers to take risks. Williams (2006) notes that such companies give their managers much more discretionary control from the outset, and that all members of the organization have bought into this philosophy. That facilitates risk-taking from project managers, who understand that they themselves have the leeway to freelance and even fail. Organizational culture might be the critical determinant of how much risk-taking will be tolerated from a project manager. This is even the case with ethical risk-taking -- some companies have strong ethics that do not allow much room for interpretation, others are rather more pragmatic about the issue (Dinsmore & Cabanis-Brewin, n.d.)