Building a Team of Trusting People that Mitigate Risk
The proliferation of information technology and the unfiltered access to that technology has contributed to a confusing information environment full of misinformation and disinformation, which requires businesses to become comfortable with uncertainty.
A business can achieve comfort despite uncertainty through organizing their team around trusting people and a process of deliberate risk mitigation.
Who can you trust?
A trusting person requires little direct guidance, takes action to solve problems on their own initiative, and takes personal responsibility for their work (the good and the bad). Therefore, trust is the manifestation of four attributes: initiative, candid communication, adaptiveness, and commitment. So how do we find these kinds of people and build a team around them?
Search for potential attributes not skills. Stop looking at pieces of paper that list a person’s self-described skills. Establish an interview assessment that identifies an individual’s potential qualities in the four trust attributes: initiative, candid communication, adaptiveness, and commitment.
- Select and Assess
Invite those individuals that demonstrate high potential across the four attributes of trust to a selection and assessment process. Objectively evaluate the individual’s initiative, candid communication, adaptiveness, and commitment through practical exercises. Select only those individuals that display all four attributes.
Now that you have the right person (i.e. a trusting person), train them in the skills that your business requires. The challenging part of the training phase is identifying the threshold of when to deselect an individual that has the attributes of trust but cannot achieve the skills necessary to thrive in your business environment. A critical skill for all your team members is the risk mitigation process as this will empower every individual to take initiative and adapt despite uncertain conditions.
Keep your trusting people around by investing in them. Offer these talented individuals’ opportunities to enhance their performance, gain unique education, and even give them the tools to succeed when they decide to leave your business.
How do you mitigate risk?
Risk is the probability that an obstacle or threat prevents a team from achieving their objectives. A business successfully mitigates risk by ensuring a positive risk threshold. A positive risk threshold is a positive difference between the benefit of achieving an objective and the cost of mitigating the obstacles and threats to that objective. This process of ensuring a positive risk threshold requires asking five questions:
(1) What do I want to achieve? [Objectives]
(2) What are the benefits of achieving these objectives? [Objective Benefit]
(3) What is preventing me from achieving those objectives? [Obstacles/Threats]
(4) How do I minimize the impact of obstacles and threats? [Mitigation Measures]
(5) How much time/capital do my mitigation measures require? [Mitigation Cost]
In an algorithm framework:
Mitigation Cost is the opportunity cost of an obstacle or threat to an objective.
Risk Threshold = (Objective x Benefit) – (Mitigation Measure x Time/Capital)
Risk Threshold = Objective Benefit – Mitigation Cost
“I will not go down under the ground”¹
Human progress is the result of undertaking daring tasks despite the consequences of failure staring humanity coldly in the face. Threats and obstacles to the success of any business are persistent, ever changing, and impossible to eliminate with one hundred percent certainty. But any business venture not implemented or executed will fail with one hundred percent certainty. Doing nothing or adopting a “shelter in place” mentality is its own type of risk. Every business should accept the challenges of a world full of uncertainty and set the conditions for success by building a team of trusting people that can mitigate risk.
¹Lyrics from Bob Dylan “Let Me Die In My Footsteps”