Executives in Science, Business and Society 3

leadership and boards IN SCIENCE,
BUSINESS
AND SOCIETY
ARE ALL LEADERS,
BY DEFINITION,
RISK-TAKERS?
Think about taking a risk. What is the first thought that comes to your mind?
Your friend, an entrepreneur, who took a risk and has been praised for their
success? Or, an action movie hero who risks their life to save the world?
Within business environments, as well as outside of them, risk-taking is
celebrated. It is possible that risk-taking is becoming culturally valuable,
and it has already become synonymous with status.
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26 JULIA VITTE
In everyday life, risk-taking is everywhere. I am
VRIJE UNIVERSITEIT AMSTERDAM fascinated by how people take risks. I am especially
interested in how groups make risky decisions and
how group leaders affect those decisions. Since
the 1960s, researchers studying group dynamics
have agreed that if a group doesn’t have a clearly
appointed leader, then the individual who actively
talks and expresses their opinion is perceived as more
influential and has a higher status among the other
group members. Later, in the 1980s, research found
that groups expect high-status individuals to make
more valuable contributions to the discussion than
lower-status members. To put it simply, if an individual
expresses their opinion more, the rest of the group
perceives them to be of a higher status and expects
them to contribute more. In terms of risk-taking, the
willingness to take risks is associated with higher
professional ability. So, the more risk one is willing
to take, the more capable they are perceived of being
and they become more valuable to the group. In other
words, the higher one’s risk preference, the higher
their status within a group.
If individuals who take more risks are perceived as
more valuable, then are those who are willing to take
the lead, risk-takers by definition? Research indicates
this to be true; making decisions, in and of itself,
is risky because the outcome of those decisions is
uncertain. In other words, success is never guaranteed
and some decisions may result in failure. In the face of
such uncertainty, determining which direction a group
should take is risky, and will inevitably lead to both
influence and vulnerability.
Considering the above, the next question to explore
is: “When working in groups, are leaders being
unreasonably risky only to ensure our own status?”
While studies must explore this question further,
looking at industry examples indicates that this might
well be the case.
Amba Zeggen, Lead Risk Culture and Behavior at
Probability & Partners, has 20 years of experience
working with teams on various aspects of risk culture.