Of all of the dangers that a business or business owner faces during the process of establishing, growing and maintaining a business, one unexpected threat might stand out as the sleeping giant. Perhaps the largest and most menacing hazard standing in the way of success isn’t low employee morale or a lack of market need, it’s the act of settling in. Getting comfortable with where your business is and accepting your position as a middle of the market low-level competitor can break a business faster than almost anything else.
How can we, as business owners, CEOs and other executives prevent our businesses from falling into the trap of “settling?” By taking risks.
Mike Krzyzewski, coach of the Duke University men’s basketball team once said “if what you did yesterday still looks big to you, you haven’t done much today.” How then, are businesses supposed to put the accomplishments and accolades of yesterday behind them if innovation isn’t in their future?
Innovation breeds profit, and risk-taking breeds innovation. So breeding profit via innovation can best be achieved by examining not only the opportunities in front of you, but by creating new opportunities for your business. The fastest, easiest and most efficient means of innovating–of changing the world and market around them–is by taking not just any risk, but smart risks.
No one likes to fail, and one of the ways to insure failure is in your immediate future is by taking bad risks. Make sure each risk you take is a calculated, goal-oriented one with an endgame in mind. Taking a risk without a specific benefit to you or your organization can be not only a useless exercise, but a disastrous one if you fail.
According to Jeffrey Kudisch of the Washington Post, weighing the outcomes is a vital part of evaluating the potential in the risk you’re considering. Essentially, ask yourself what will (or might) happen depending on each path.
If you remain complacent in your current situation, what may happen? The first, and possibly most obvious answer is “nothing.” And while “nothing” might not sound like a bad thing, it certainly can be. When nothing happens, you’re not innovating, you’re not growing and you’re certainly not helping move the organization forward.
On the other side of the coin, what may happen if you do decide to invite change and take a risk? Is the risk large, or small? Could it derail the company or cause widespread failure? Calculate the potential benefits and setbacks that your risk could have.
If the biggest casualty of your risk is deemed acceptable, don’t be afraid to take it. Risk taking, even at its worst, can be an incredibly valuable learning tool. Failures and setbacks of all shapes and sizes can’t just be thrown by the wayside once they’ve taken a turn for the worst and been deemed a lost cause. Use these negative risks and failures as tools for the future.
Risks shouldn’t be something that scare you or your business away from innovation, they should cultivate change within your company. Enormous, multinational businesses wouldn’t be where they are today if it weren’t for the risks they’ve taken. Taking carefully planned and evaluated risks are a vital step to reaching your goals.
Victor Saad gave a fantastic Tedx Talk about the value of risk taking. The video can be found below.