Do you feel the target on your back? It's there every day your in business. You may not have thought about it before, but it's there. It's called risk.
Note: This is the final part in a three-part series on risk in business.
Click here for Part 1 - Click here for Part 2
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Risk is something to be embraced - as the first two parts of this blog
series have detailed. In order to round out how risk should be managed
we'll examine what you can do with risk - how to be proactive with it.
The pen is mightier than the sword
"True, this! Beneath the rule of men entirely great,
The pen is mightier than the sword."
– Edward Bulwer-Lytton - 'Richelieu; Or the Conspiracy'
In my first post on risk I spoke about the 'sword of data.' This data,
compiled from gobs of market research, acts as a sword - a very powerful
tool. With this sword, business leaders are able to cut through the clutter
and clear new pathways. They are also able to fend off enemies of
deceit by slicing up poor strategies with factual analysis.
However, when it's time to create a new business or product, the sword
must be set down in favor of the more creative pen. This little
instrument of creativity harnesses the power for companies to outline
the blueprints for new ideas, technology, and markets, all of which sum
up the backbone of an attractive offering for customers.
Think of what you can create and why before you even think about the
amount of risk you are considering. Only after you've brainstormed, and
considered the possibilities of something new, can you really analyze
the risk in front of you. Remember, the greater the risk, the greater
the reward.
Loss aversion
Make no mistake, loss aversion is real in every aspect of life. It's scary to think about, but it is present in every decision we make, every day.
In a situation where the amount of risk is the same for both gain or loss, a decision-maker will most often choose the option to not lose. Here's where data analysis can pay off.
This knowledge shines light on the idea that innovation can create new products and business models ripe with possibility, while data can pave a way for decision-making and how to assume risk.Note: For more on how we make decisions with respect to risk, I recommend a great book titled Sway: The Irresistible Pull of Irrational Behavior
Follow the leaders
Two company models come to mind as examples that ensure regular creativity for new product development in the workplace.
Atlassian and Google have a set time every week for their employees to work on anything they want. This relaxed environment, free from the stresses of every day project work is responsible for some advanced technologies for Google, namely in Gmail and Orkut.
This model also acts as an added incentive to help attract and retain the top talent. Who isn't motivated to work on their own ideas? How does a relaxed work environment contribute to solutions-based products and services?
Tim Andren is the founder of Guideas, Inc. an innovation and marketing company.
