Sheri Jacobs, FASAE, CAE discusses the importance of distinguishing between risk tolerance and risk capacity to unlock your association’s true potential for growth and innovation.
An article, “Risk Capacity vs. Risk Tolerance”, written by President and CEO of Avenue M Group, Sheri Jacobs, FASAE, CAE is featured in Associations Now. In the article, Jacobs distinguishes between risk tolerance, which is subjective and based on past experiences or personal preferences, and risk capacity, which is objective and about what your organization can handle regardless of its comfort level. She states that focusing on risk capacity in addition to risk tolerance is important because it can help you:
- Make more informed decisions
- Pursue opportunities your organization might have otherwise overlooked
- Build resilience in your organization
- Foster a culture of innovation and growth
In the article, Jacobs shares an exercise to help your organization rate its risk capacity for specific ideas, as well as an assessment you can take to understand your current innovation Capacity Score. She also provides recommendations for how to get started regardless of if you have a low-, medium-, or high-risk capacity.
To understand your current innovation Capacity Score, click here. To read the full article, click here.
(Image: Sheri Jacobs, FASAE, CAE)