By | David Klaasen | Helping You Create Clarity, Inspire Your People & Drive Performance | Retain your best people | Changing Management Mindsets and Behaviour | Practical Behaviour Analytics
There is an element of risk in everything we do because even doing nothing has risks attached to it, especially in today’s volatile and uncertain world. What is your appetite for risk and is it balanced enough?
With hindsight it is easy to see that the West’s impulsive adventure into Iraq in 2003 didn’t take the complexities of the local sectarian alliances and animosities into account. It is also easy to see that the board of Directors at Kodak didn’t exploit the opportunity presented by Steven Sasson one of their engineers. Back in 1977 he invented the first digital camera. The Directors were very cautious about the idea because they didn’t believe that people would want to view their photos on a TV or screen and the marketing department was adamant that it didn’t want to erode Kodak’s massive share of the market for 35mm film. This initial lack of willingness to take a risk, combined with lots of impulsive but fruitless attempts to change as the world changed around them, ultimately destroyed the business which went into receivership in 2012.
The last 20 years are full of examples of big brand companies that were too cautious and remained inactive, or became impulsive by undertaking a number of knee-jerk initiatives that damaged the foundations of the business making it impossible to recover. Research shows that a lot of the thinking behind these unsuccessful behaviours is based on strongly held assumptions which create blind-spots that can prevent Directors and Managers from effectively analysing the potential pitfalls or be willing to take a risk.
The Right Balance
As a Director or manager you will have your own personal preferences and traits in regard to risk and it can be useful to have some distinctions that illuminate the paradoxical nature of how to develop a balanced and mindful approach to strategy. The proverb for this could be: “Have the courage to pursue success, but understand and manage your risks”.
