Execs Find Ways to Encourage Risk-Taking and Creativity

Jim Donald, CEO of Extended Stay America, stepped into his position one year ago and realized employees were afraid to take risks as the company attempted to restart after emerging from bankruptcy. Many were worried about losing their jobs and so avoided decisions that might cost the company money, like making property repairs. So Donald came up with a solution: Get Out of Jail, Free cards.

He handed the cards out gradually to his 9,000 employees. “All they had to do, he told them, was call in the card when they took a big risk on behalf of the company — no questions asked,” writes the Wall Street Journal.

“They were waiting to be told what to do,” recalls Donald, the former Starbucks Corp. CEO. “They were afraid to do things.”

This sort of fear is not unique to Donald and his company, suggests WSJ. “Growth and innovation come from daring ideas and calculated gambles, but boldness is getting harder to come by at some companies. After years of high unemployment and scarred from rounds of company cost-cutting and layoffs, managers say their workers seem to have become allergic to risk.”

According to the article, being averse to risk is how employees assume the boss wants it. They also assume the priorities lie elsewhere.

Mark O’Brien, North American president of ad agency DDB Worldwide, “says he got a wake-up call when workers cited ‘profit’ as the company’s top priority in a 2011 employee survey. In previous years, profit generally ranked second to creative work, and ahead of people,” according to the article.

But O’Brien understood why the workers felt that way as his own DDB North America division had just laid off 10 percent of its workforce and clients were paying less than before.

“He saw the work suffer, too — the division, which brought in roughly half of the company profit, only won a tiny share of industry awards given for creative work, a key driver for attracting talent,” explains the article. He decided then that talking too openly about profits was not positive for creativity and steered managers away from such discussions amongst employees.