Choosing to take risks can stimulate innovation and growth, but can also be devastating for people and organisations. Take, for instance, the economic carnage left behind in the wake of the 2008 recession. Behavioural scientists at the University of Amsterdam (UvA) conducted three experiments and a field study to see whether risk-takers benefit from their risk-taking behaviour in terms of social hierarchy, how risk-taking behaviour reveals specific qualities and when risk-takers are accepted as leaders.
They found that people consistently associate risk-taking behaviour with leadership. Whether or not risk-takers are accepted as leaders depends on the context. The support for leaders with ‘brass balls’ is particularly evident in competitive situations.
‘It would seem that risk-taking delivers an added social bonus in the form of more power and status. We know from prior research that individuals with more power are also prepared to take more risks, which reveals the potential for a vicious cycle to emerge,’ according to Gerben van Kleef, one of the researchers.
The theory: dominance and prestige
In an attempt to explain the connection between risk-taking and leadership, the scientists applied a theoretical model which they tested in their experiments and fieldwork. Simply stated, this model assumes that by taking risks, an actor reveals certain qualities that would otherwise be difficult to detect – specifically, dominance and prestige. On the one hand, by daring to take risks, a person demonstrates that they possess relevant skills and knowledge which may be useful to the group and in doing so, compel the respect of others (prestige). On the other hand, the actor also shows that they are undaunted by the potential consequences associated with the risk in question. This reveals a certain degree of strength and might (dominance). Prestige and dominance are therefore two important paths leading to power, influence and leadership.
An implicit connection between risk-taking and leadership
An initial experiment was aimed at testing the association between risk-taking and leadership. The researchers presented participants with groups of words and asked them to connect the words that matched best. The results showed that words having to do with leadership, such as ‘boss’, were consistently grouped with words that had to do with risky behaviour, such as ‘daring’. This yielded the first conclusion: that people implicitly assume a positive correlation between risk-taking and leadership.
Non-dominant leaders preferred
In a subsequent field study during the Israeli elections in 2019, Van Kleef and the project team tested this correlation in a real-world setting and analysed which qualities were rewarded. To that end, they arranged the nine most plausible candidates along a scale for measuring risky behaviour. The researchers then asked voters what they thought about these candidates, who they planned to vote for and, later, for whom they had actually cast their ballot.
This field study showed that political candidates who took more risks were seen as more prestigious and more dominant than candidates who were less inclined to risk-taking. While voters indicated they would prefer not to be led by a candidate considered to be dominant, they did deem candidates who were associated with prestige deserving of their votes.
But some situations do call for dominant leaders
So when – in what kind of situations – do people indeed vote for dominant leaders? To answer this question, two additional experiments were conducted in which participants were asked to select candidates for leadership positions in cooperative or competitive situations based on their LinkedIn profile. Which qualities make a person suitable for a leadership position in an oil company, for instance, when that job involves cooperating with the government to find alternatives to fossil fuels (cooperative context)? And on the other hand, which qualities make someone well-suited to leadership when the job involves competing with other companies for the extraction rights to a new oil field (competitive context)?
Dominant risk-takers tend to fare well in a highly competitive context
These experiments, again, showed that risky behaviour reveals a combination of dominance and prestige. With regard to the cooperative situations, the dominant candidates were once again viewed as unsuitable leaders – yet they were seen as suitable for the competitive situations. ‘In other words, dominant risk-takers tend to fare well in a highly competitive context,’ the researchers concluded.
Recognising risky behaviour more effectively
Although for a moment, subsequent to the 2008 recession, it did seem as though a paradigm shift was occurring in the financial world, ultimately it seems little has changed in terms of risk-taking. Apparently, there is persistent support for risky behaviour in highly competitive settings. The results of this study will make it possible to recognise and describe such behaviour more effectively. ‘Our research shows when and how risk-takers find support for their leadership and helps us to better understand the social dynamic of risky behaviour in organisations, politics and society as a whole,’ Van Kleef concludes.
In a follow-up study, Van Kleef and his colleagues want to explore whether the end result of risky behaviour matters: ‘Has it been successful or not; and if so, for whom?’
Gerben A. van Kleef, Marc W. Heerdink, Arik Cheshin, Eftychia Stamkou, Florian Wanders, Lukas F. Koning, Xia Fang, Oriane A. M. Georgeac (2020), ‘No Guts, No Glory? How Risk-taking Shapes Dominance, Prestige, and Leadership Endorsement’, In: Journal of Applied Psychology.