Doing Nothing – The Biggest Risk
There’s a well-known parable about a wealthy CEO who took an extended business trip. He left his company in the hands of his three VPs, and gave each of them a portion of the net assets to manage in his absence. Based on what he knew of their capabilities, he gave the first one, we’ll call her Pat, $50 million. The next one, Chris, was given $20 million, and the last, Joe, was given $10 million. When the CEO returned, he asked for a report of their activities and earnings during his absence. Pat proudly showed him how she had doubled the assets entrusted to her, and now she had $100 million. Chris was pleased as well to show that she now had $40 million. Joe by now realized he had fallen far short of his CEO’s expectations. He was afraid to take a risk in losing his leader’s money, after all he couldn’t afford to pay it back, so he did absolutely nothing with it. Nothing. Joe didn’t even try to increase it, or put it in an interest bearing bank account. You can imagine what the CEO did with Joe after that. He likely didn’t have a job.
Now Pat and Chris could probably tell some interesting stories about their journey to doubling their assets; things they learned along the way both about themselves and their business strategies. They likely had some failures, but they were able to effectively manage through them.
Rut vs. Risk
Joe was afraid to take any type of risk with the valuable resources he had. He simply sat on them. Hopefully he had an idea of a business strategy he could try, something he wanted to do, but unfortunately he didn’t know how to do it or was afraid to take the risk. And by doing nothing, he effectively lost ground.
There are too many people like Joe who are stuck in ruts of demonstrating ineffective leadership behaviors, producing negative business results, performing unfulfilling work, and facing unrealized dreams and goals. These individuals have found the so-calledcomfort of their present state to be more powerful than the energy required to change.
They’ve become paralyzed at the prospect of failure or embarrassment, having to deploy a new strategy or learn a new skill, and are not yet willing to put forth the effort to get out of the rut. Think about the process of getting a vehicle out of a rut. Living in the snow belt, I learned as a teenager how to shift a vehicle between drive and reverse and gun the motor to rock it out. (It was actually fun!) Doing nothing and staying in that rut wasn’t an option. But you have to get on the field in order to play the game.
No Risk, No Progress
Olympic athletes provide a stark example of individuals who push themselves to higher levels of achievement. If they really want to win gold, they have to exceed past accomplishments, and risk personal physical injury to see how far their minds and bodies can go. The psychological component is as great as the physical in reaching their goal. There are definite downside risks for their commitment; training expenses, loss of family time and typical teenage activities, unflattering PR and social media feedback, the emotional toll of their grueling schedule, and obviously failure to qualify to get to the games.
But the bottom line is that a life without risk is a life without progress. Accomplishing anything of significance requires risk. And yet it’s important to understand that taking a risk doesn’t always mean that you’ll achieve a specifically articulated goal. An overwhelming percentage of startups fail. Most of the people who strive for the Olympics never get there. Ninety-six percent of businesses fail within 10 years. Many organizational transformations
and business reorganizations fail¹. Their fault lies not intaking a risk, but in managing that risk effectively.
Managing is the Key
Managing risk requires competencies of flexibility, adaptability, proactivity, learning agility, decision quality and action orientation. It also requires a deep knowledge of your subject matter and business environment; willingness to learn from others; and a clear understanding of the potential downsides. And in the midst of all of that, it requires self-forgiveness when you make a mistake, because you will.
So if your employment is negatively impacted by taking this risk, what’s your potential loss of professional reputation, your capability of finding the right next job quickly, and the financial impact on you and your family? Or if your company’s new product or service doesn’t meet established revenue goals, how will your stakeholders (investors, clients, board, sponsors, family) respond?
If you invest in this new business venture and it fails, how will you deal with it? Bottom line, don’t pour all your resources into a high risk strategy unless you can afford to lose everything.
Be smart about the risks you take; but take more than you turn down, and learn from the ones you take. Find a new position that aligns with your values. Choose the right career path. Master new leadership skills. Lead an innovative program for your company. Pursue your purpose. Invest in a viable business idea. Step out of your rut.
Risk is a growth word. Anything gained has come through risk of failure. Doing nothing is not an option.
¹Why 96% Of Businesses Fail Within 10 Years, Bill Carmody, Inc.
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