In a world marked by relentless change and mounting uncertainty, the greatest risk to any organization isn’t found in the market, AI advancements, or geopolitical instability. It’s found within—specifically, in how leaders choose to identify, prepare for, and respond to risk.
Too many organizations default to a strategy of extreme caution, doubling down on protecting their core operations while avoiding calculated risks on the periphery. The irony? This “safety-first” mindset doesn’t actually safeguard the core—it slowly erodes it.
As I explore in my upcoming book, The Courage Gap, playing it too safe is one of the most dangerous things leaders can do. Smart organizations understand that courage isn’t about recklessness—it’s about creating a culture where measured, strategic risk-taking is encouraged, particularly at the edges of the business.
You Can’t ‘Culture’ Your Way into New Behaviors
A thriving organization isn’t built on values painted on walls—it’s shaped by behaviors modeled from the top. As I often remind executives, “You can’t ‘culture’ your way into new behaviors. You need to behave your way into new cultures.” And the number one person responsible for demonstrating those behaviors? The CEO.
Culture isn’t just about words—it’s about actions. Leaders who embody courage, demonstrate vulnerability, and are willing to experiment with small, peripheral risks send a powerful message to their teams: It’s safe to try, safe to learn, and safe to fail.
Peripheral Risk-Taking: A Lesson from the Edges
Peripheral risks are those taken at the boundaries of a business—new product experiments, bold marketing campaigns, innovative pilot projects, or entering adjacent markets. They don’t threaten the core operations, but they inform them.
Take Netflix, for example. Before it became the streaming giant it is today, it was a DVD rental company. In the early 2000s, the leadership team took a peripheral risk by investing in streaming technology—a bet that seemed uncertain at the time. It wasn’t a full-scale overhaul of their business model but rather an experiment at the edges. That calculated risk didn’t just succeed; it reshaped the entertainment industry and solidified Netflix’s place at the center of it.
Compare that to Blockbuster, which famously played it safe. The company stuck to its core DVD rental model while dismissing opportunities to innovate on the periphery. By the time Blockbuster recognized the need to adapt, it was too late—the core had crumbled.
The lesson is clear: If you’re not taking risks at the periphery, you’re putting the core at risk.
The Real Threat Isn’t External—It’s Cultural
A lack of courage isn’t just an individual problem; it’s an organizational one. The most significant threats to long-term success aren’t external forces—they’re the internal dynamics that prevent organizations from responding to them.
Research from Dr. Amy Edmondson at Harvard Business School highlights the importance of psychological safety in organizational cultures. Teams that feel safe to take risks, share ideas, and voice concerns are more innovative and adaptive. Conversely, environments where fear of failure dominates decision-making lead to stagnation and missed opportunities.
As I often say, “The biggest threats to your organization are not external. It’s not GenAI, or the market, or geopolitical. It’s how you identify, prepare for, manage, and then learn from risk. That’s the greatest threat to your long-term success. And you can overcome that by fostering a mindset of courage in your organization.”
Behavior Shapes Culture—From the Top Down
Creating a culture of courage starts with behavior. It’s not enough for leaders to talk about innovation and experimentation—they must model it. When leaders embrace small, strategic risks—when they own their mistakes and celebrate thoughtful failures—they create a ripple effect throughout their teams.
This behavior unlocks a cycle of growth:
- Small risks lead to small wins.
- Small wins build confidence.
- Confidence fuels bigger, smarter risks.
The opposite is also true: in organizations where leaders punish failure or avoid risk altogether, fear becomes the dominant culture. And fear is a lousy strategy for growth.
Building a Culture of Courageous Risk-Taking
So, how can leaders foster this culture of peripheral risk-taking?
- Start Small, Learn Fast: Encourage small-scale experiments and pilot projects that won’t threaten the core if they fail.
- Reward Curiosity, Not Just Outcomes: Celebrate the act of trying something bold, even if it doesn’t succeed.
- Normalize Failure as Learning: Frame failure as an opportunity to grow, rather than something to fear.
- Lead with Vulnerability: Share your own risks and failures openly to set the tone for your team.
The Courage Gap: Bridging the Space Between Potential and Action
At the heart of this conversation is what I coin as ‘the courage gap’ —the space between what we could do and what we actually do. Closing that gap isn’t just about grand gestures of bravery; it’s about daily choices to embrace discomfort, challenge assumptions, and act despite fear.
Peripheral risk-taking isn’t a distraction from core stability—it’s the lifeblood of it. Organizations that innovate at the edges don’t just survive turbulence—they thrive because of it.
As leaders, we must ask ourselves: What are we risking by not taking risks at all?
Dr Margie Warrell is an keynote speaker and leadership advisor who emboldens braver leaders for better outcomes. Her new book is The Courage Gap: Five steps to braver action.