August 20, 2021

How to build risk into your company culture

Lucy Hitz
Director of Content, Ally.io

Risk gets a bad rap.

Instead of focusing on where a risk could go wrong, establishing a goal framework and transparent tracking enables us to see risk-taking’s benefits: innovation, improvement, competitive differentiation and, ultimately, positive impact to the bottom line.

We’re making a case today for the role of risk in business, supported by results from our 2021 Goal Management Report and survey.

The fear of failure

When teams don’t feel psychologically safe, clear on their organization’s broad vision and goals, and empowered to take intentional risks (key word, intentional), innovative thinking and doing withers on the vine. There is a stark difference in risk perceptions between employees with a goal framework in place, and those without.

According to our survey, 73% of employees who use a goal framework feel empowered to take risks despite the chance of failure. In comparison, only 53% of employees who don’t use a goal framework could say the same. 

In this case study with Trend Micro, VP of of Hybrid Cloud Security Adam Boyle shares the benefit of implementing a goal-setting structure, specifically for OKRs, in his organization.

Teams from across the globe also are now empowered to work toward a common vision and goal. OKRs have also helped Adam create a culture where team members feel safe enough to fail. “This psychological safety plays a huge role in shaping our culture and fueling innovation.”

Without a structure in place for setting and reaching goals, employees lack ambition to innovate and are hindered by a fear of failure. In contrast, employees working toward set goals are engaged enough to worry about whether they’ll reach them and empowered enough to take the necessary risks to get there. 

What you can do to build a risk-positive culture

So how do you build a culture of high psychological safety and mutual accountability? How do you enable your people to feel comfortable setting stretch goals and potentially failing at them?

• Foster a growth mindset. Instead of running away from failure or risk, focus on running your team towards growth. With a growth mindset, 70% is considered acceptable, as long as you have a story of why. This means you are innovating and stretching yourself. Think back to school. The grade is a benchmark to show progress and understanding of where you landed. How far off from my goal am I? How serious do I need to take the learnings to make changes?
• Encourage leaders to talk about their failures in a public space to reiterate the expectation that trying, failing, and learning is okay. Consider working this into your ritual for all-company meetings. Ally.io’s OKR dashboard helps you easily share business updates and progress in meetings, minus the time-consuming deck-building process.
• Move from annual planning to quarterly planning. Moving away from a big annual planning process towards the more agile process of quarterly planning is one strategy to consider—or at the very least accommodating for new quarterly goals which will require resources and risk. 
• Decide on the framework you need to successful. The OKR methodology gets everyone tracking toward the same goals, while also allowing room for unforeseen challenges and obstacles. In other words, an OKR program is designed to tolerate failure. One way we do this is by encouraging aspirational goals. Different from committed goals that are almost guaranteed to be achieved, these are ambitious, stretch goals that may be more challenging to reach, but have a worthwhile payoff. By designing a program that encourages organizations to push the boundaries and accomplish more, we set you up to “fail forward.” 
• Decide on the tool you need to be successful. 88% of Ally.io OKR software customers say they feel empowered to take risks; 80% say our tool has created a higher performing team, and 62% say it’s led to faster growth for their business.

That’s because Ally.io has built-in features that use progress (or a lack thereof) to inform future successes: integrations with the tools you already use, like Slack and Microsoft Teams; notifications make updating progress a habitual activity for every employee. This sets your team up for weekly, monthly, and quarterly reviews, where there’s ample opportunity to reflect on the work that’s being done, address setbacks or blockers, and adjust accordingly. 

At the end of a cycle, all OKRs get reviewed and scored on how well an objective was accomplished. This is a thorough exercise that occurs throughout the organization. In some cases, objectives don’t get completed. In our world, that’s alright. OKRs that are still a priority can rollover to the next planning cycle. 

Agility normalizes failure within an organization, making it an accepted and anticipated part of business operations rather than an end-all event. In doing so, employees are able to operate within a culture that’s set up to take risks and learn from the outcomes. In the long run, this OKR journey–one that’s empowering, agile, and informative–can bring an organization incredible success.

Interested in reading success stories from companies like Overstock, Rakuten, and BetterCloud who have used OKRs to fail forward? Check them out here.