How can a leader develop a risk-appetite?

To be successful, a leader need to take more risk. However, while developing risk-appetite a leader needs to understand how much can he afford to take it.

To be successful, a leader need to take more risk. However, while developing risk-appetite a leader needs to understand how much can he afford to take it. This may look very difficult, but it’s simply a combination of desired goals in a limited time frame and the conviction of being successful.

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A top-down approach, defining the risk and then sharing the same with key stakeholders is usually the best way to begin developing the risk-appetite. A top-down approach makes the requirements of the various external stakeholders explicit, stimulates debate in the executive team and identifies the key area of concern and the ways to tackle them. The process can also be used to engage the board and the directors on the subject. The result is a robust framework that can be used to articulate appetite throughout the group and to the external stakeholders.
(Pankaj Dubey, managing director, Polaris India)

Corporate leaders always need to manage their business with a strong entrepreneurial flair. With an entrepreneurial approach comes many risks but also many opportunities. Identifying opportunities and the risks, especially in this dynamic environment, is vital to a leader’s success.