Yin and Yang and the 5 Risk Roles of Executive Leaders

Diversity, transparency, empathy.

When organizations welcome these qualities while maintaining structure and stability, they’re ahead of the game.

It is often difficult to find the right balance between an aggressive approach and a passive one when managing a business. In this article, I will describe the 5 types of risk, the 5 risk roles of executive leaders, and how these apply to balancing the Yin and Yang of Management.

What are the 5 Varieties of Risk?

Risk awareness involves recognizing the obvious: external threats (fire, bombs, hackers) and internal threats (waste, loss, and fraud) as well as strategic risks, which I define as “vulnerabilities and untapped opportunities that affect an organization’s ability to reach goals.”

strategic risk, strategic planning, governance, operational, reputational
Pie chart of the 5 Types of Strategic Risk

The 5 types of strategic risks include:

  • Governance: Controlling, Planning, and Monitoring
  • Operational: Inefficiency and Waste Identification
  • Competitive: Customer and Market Drivers
  • Financial: Revenue Generation and Cost Control
  • Reputational: Public and Customer Perception, and Employee Engagement

Of these main categories, I believe the most difficult to self-evaluate is Governance.  Hidden threats that stem from leadership blind spots and biases have a major impact on strategic decision-making.

leadership blind spots, leadership, blind spots, bias, strategic planning, risk management, vulnerabilities
Grace LaConte’s “Leadership Blind Spots and Bias” Diagram

Unlike the other types (internal processes, market drivers, revenue, and customer perception), the Governance risks are especially critical. No organization can function without meticulous planning, control measures, and monitoring of vulnerabilities.

Risk Roles of Leaders

As an executive leader, you wear a lot of hats. The Governance role can be broken down into 5 Risk Roles of Executive Leaders. These include:

  • Planner: Determine strategic goals; Recognize blind spots
  • Director: Accurately gauge problems; Move projects forward
  • Organizer: Create high-yield systems; Design effective processes
  • Staffer: Identify work requirements; Select, train, and retain people
  • Controller: Establish boundaries; Regulate and measure risks
risk management, leadership, executive leaders, risk roles, planning
The 5 Risk Roles required of Executive Leaders

Risk Roles in Strategic Planning

Each of these 5 Risk Roles is also related to the Strategic Planning Framework:

  • Planning relates to Vision & Mission and Administration
  • Directing relates to Strategic Objectives
  • Organizing relates to Policies
  • Staffing relates to Standards & Guidelines
  • Controlling relates to Processes and Procedures
strategic planning, framework, vision and mission
Grace LaConte’s 3-part framework for strategic planning

My previous post on Yin and Yang Approaches to Management noted the difference between the Collaborative Yin style of management (which is consultative and relaxed), and the Hierarchical Yang style (which is assertive and dominant).

Yin and Yang, extreme, balance, strategic balance

Putting it All Together: Yin and Yang as Seen In the 5 Risk Roles

Below, I provide a side-by-side comparison of the Yin (Collaborative) and Yang (Hierarchical) styles for each of the 5 Risk Roles of effective leaders. I also include corresponding levels from the Strategic Planning Framework mentioned above.

 

Risk Role: Planner

Task: Planning

Strategic Plan Level: Vision & Mission, Administration

Goals:

  • Determine strategic goals
  • Recognize blind spots
Planner
Collaborative Management (Yin) Hierarchical Management (Yang)
Staff are involved in creating goals Leadership team sets goals & plans
All team members collaborate & provide ideas on how to reach objectives Leaders decide how to attain goals

Risk Role: Director

Task: Directing

Strategic Plan Level: Strategic Objectives

Goals:

  • Accurately gauge problems
  • Move projects forward
Director
Collaborative Management (Yin) Hierarchical Management (Yang)
Influence comes by collaboration from each member of the team Influence comes from position of authority
Facilitate team brainstorming to discover solutions Decide and deliver solutions

Risk Role: Organizer

Task: Organizing

Strategic Plan Level: Policies

Goals:

  • Create high-yield systems
  • Design effective processes
Organizer
Collaborative Management (Yin) Hierarchical Management (Yang)
Lead by example Responsibility is assigned (“do as I say”)
Enable team to allocate time & resources as they deem necessary Allocate time and resources only when proven necessary

Risk Role: Staffer

Task: Staffing

Strategic Plan Level: Standards and Guidelines

Goals:

  • Identify work requirements
  • Select, train, and retain people
Staffer
Collaborative Management (Yin) Hierarchical Management (Yang)
Allow roles & duties to evolve and fluctuate organically Adhere to specific roles & responsibilities
Provide immediate & continuous feedback Executives review performance annually

 

Risk Role: Controller

Task: Controlling

Strategic Plan Level: Processes

Goals:

  • Establish boundaries
  • Regulate and measure risks
Controller
Collaborative Management (Yin) Hierarchical Management (Yang)
Openly share information Monitor & maintain ownership of information
Encourage innovation; discover root causes continuously Make corrections as problems occur

 

Final Thoughts

As with anything, extremes are harmful. We need both aspects of management working together: Yang’s focus on expansion and assertive effort to maintain control, and Yin’s emphasis on flexibility and openness to change.

The key to developing a balanced organization is to recognize the benefits of a structured and clear, yet empathetic strategic plan.

 

Do you want help identifying whether your company has a Yin deficiency? Schedule a free call so we can talk.


Grace LaConte is a Strategic Risk Expert who helps Complementary and Integrative Health practitioners to find and fix organizational vulnerabilities. Using her experience as a Risk Officer and Director in healthcare and technology companies, Grace shares a refreshingly honest approach to uncovering hidden risks and opportunities. Learn more at http://laconteconsulting.com, or connect with her on Twitter @lacontestrategy.

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