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How to become a better risk taker

Are women afraid to take as big risks as men?

Is that question even a valid one?

I have survey data that says it is a valid question and that women are more afraid of risk taking -- particularly when it comes to putting money on the line. But that can change.

All of us can become better risk takers if we change the way we think about risk -- looking at it for the opportunities rather than the repercussions.

I tackled the topic of risk taking in my Miami Herald column today and learned a lot about how to make risk taking pay off. I have edited the article to hone in on the best advice:

Many women business owners hesitant when it comes to risk taking

 
 
 
Mary Jo Eaton, executive managing director of CBRE, in front of the 777 Brickell Building, one of the properties the firm manages and where its Miami office is located. Eaton has taken big risks to help CBRE expand in Florida, most recently opening a Tallahassee office.
Mary Jo Eaton, executive managing director of CBRE, in front of the 777 Brickell Building, one of the properties the firm manages and where its Miami office is located. Eaton has taken big risks to help CBRE expand in Florida, most recently opening a Tallahassee office. 
C.W.GRIFFIN / MIAMI HERALD STAFF

 

BY CINDY KRISCHER GOODMAN

Allison Sokol, CEO of Specific Beauty, needs to be a risk taker. Her marketing channel, HSN, wants her Miami multicultural skin care company to forge into new product lines. Her buyers want her to expand into Europe. Her business partner, Dr. Heather Woolery-Lloyd, wants to showcase the science behind results through infomercials. But Sokol approaches risk taking cautiously.

“I’m not risk adverse,” she says. “I’m just not impulsive. I believe in being sure and taking educated risks.”

Sokol’s caution mimics many women who run businesses. But when big risks lead to big rewards, women leaders must shift their thought processes if they are going to increase their growth prospects. How exactly, does someone become more of a risk taker?

The first step is a mindshift. A new survey shows women business owners in Florida are struggling to find an appropriate balance between risk and caution. The survey of nearly 250 women by the Commonwealth Institute South Florida found women leaders and owners are optimistic about growth for their businesses in 2014. But while they express interest in expanding product lines and moving into new geographies, most hesitate to take a financial risk.

Most telling: More than 63 percent said they plan to fund growth in 2014 with internally generated funds. That represents a startling figure when research by the Department of Commerce shows most male owners are willing to borrow money to fund their ambition and cease growth opportunities.


“Women by nature are not gamblers,” says Laurie Kaye Davis, executive director of the Commonwealth Institute

Visualize the potential outcome to make risk taking less scary. Judy Leibovit, founder of Sweet Endings offers this advice as she looks toward national distribution for her desserts:  "It’s about doing it carefully, slowly and smartly and seeing clearly where the risk will take you.”

Size up competitors’ risk tolerance. Risk can be critical to increasing market share, the outspoken Richard Branson founder of the Virgin Group has noted. In this competitive economy, avoiding risk can be its own gamble.
 
Reframe risk as an opportunity to succeed. This thinking has helped men build more million dollar companies than women. Of course, some of that may be by choice. Women business owners often work harder at juggling work and family; accordingly, they often have smaller performance expectations for their businesses, according to research by the National Women’s Business Council. In assessing risk, look for long term pay off rather than short term rewards.

Think bigger and bolder. “Women are taking risk consistent with their goals but their goals aren’t big enough,” says Sharon Hadary, former and founding executive director of the Center for Women’s Business Research in Washington, D.C. “We live up to our own expectations.”  Mary Jo Eaton, executive managing director for CBRE Florida, has relocated twice and taken on difficult roles that she saw as opportunities to stand out. “I have had great male mentors who I’ve watched assess risk, take significant risk and be rewarded.”


Prepare well. The greatest rewards come from preparing for risk in advance and seeing short-term setbacks as a stepping stone to long-term success. Allison Sokol's Specific Beauty offers a case study. Sokol's initial strategy for distributing her tone-evening skincare line required an unsustainable marketing budget to support sales through retail stores. She has since begun distributing the projects through doctors’ offices, med spas, the Internet and HSN.

Still, Sokol wants big rewards for her company and factors that into every potential risk: “The bottom line is I didn’t go into business to make little bit of money. I went into it to make a lot of money. If I am taking away time from family, I want to do it in big way.”

 

 

 

 

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