Business leaders focus on risk

May 24 2010 by Brian Amble Print This Article

Given the fragile state of the economy and continuing turbulence in the financial markets, it is no surprise that business leaders around the world are more focused today than ever before on managing risk and uncertainty within their organizations.

And as research released last week by Babson Executive Education finds, this uncertainty is inspiring many executives and business leaders to behave more boldly and more entrepreneurially than they did before the global economy tumbled.

Babson's 2010 Report on Business Uncertainty reveals that almost half of 1,048 global executives surveyed said they are taking bolder actions now than before 2008, with a variety of experimental approaches to managing uncertainty in a complicated business environment being adopted.

For example, more executives are intentionally linking job design to growth strategy. "These corporate growth and innovation goals are being adapted pervasively across the workforce, not just from the traditional groups like Research & Development," said H. James Wilson co-author of the report.

But while six out of ten respondents agree or strongly agree that they are more innovative in performing their jobs, half complained that they are also expected to perform routine tasks that steal time from innovative pursuits. The survey points out the downside of "responsibility creep," when managers ask employees to take on new tasks before asking whether such tasks are strategically relevant.

The importance of this is highlighted by the fact that almost seven out of ten of those who agree that there is a clear link between their job and corporate strategy also report that their company is growing revenue.

"Companies that don't regularly link jobs to strategy often are more than twice as likely to have flat or declining revenues," H. James Wilson pointed out.

Meanwhile, with almost half of respondents saying that training and professional development initiatives have also been reduced since the economic downturn, the report also suggests that increasing numbers of employees are taking their careers into their own hands and taking steps to network and be more proactive in seeking new opportunities.

Dr. Elaine Eisenman, Dean of Babson Executive Education, warned that this posed risks for retention unless organizations responded.

"Executives can create new legitimacy for employee empowerment - by providing greater opportunities for promotion and 'giving credit' to employees who have expanded their job responsibilities," she said.