Are You a Risk Taker or Reckless?
Is it Risky or Reckless?
In my 38 years in Corporate America I found myself taking calculated risks and being reckless. The reckless decisions were painful and expensive and took a long time to recover and get back on track. It’s easy to see in hindsight which ones was which but at the time I did not know if it was risky or reckless. This article is written to help you figure it out before you make a reckless decision.
The key questions to ask yourself
Does this make your brand better?
Whether you are a top CPG company or a new business getting started you must first ask the question, is this decision going to make my brand better? If you don’t know, then you don’t understand your brand and you need to spend more time defining what that looks like. If the risks are small and it makes your brand better, its’an easy decision, go for it. If it’s a high risk venture but it accelerates your brand, it’s worth consideration. If the initiative is high risk and it’s not great for your brand then you must pass on it.
This is usually the leaders decision. Don’t let your organization, who are competing for your resources, tell you if it’s on brand or not. As the leader, you must know if it is or not. One of the oldest arguments for competing organizations is to proclaim if an idea is right for the brand. One will debate it is and the other will debate the opposite. Leaders must make this decision and be clear about it.
Is it on Strategy?
The number one mistake I see from business leaders and people just getting started is they take on projects that are off strategy. Most of the time they are things they can do, might be easy to do, they might even make a little money but its off strategy. Successful companies spend significant time developing strategies that leverages what they do best, where they can win in the marketplace, and takes them to where they want to go long term. If you find yourself taking on projects that are clearly not on strategy, then you need to go back to square one and evaluate what you are trying to do. Doing things just because you can, your know how to do them or have done them in the past does not mean they are on strategy. Don’t talk yourself into doing these things in the shore term just to get a few things on the scoreboard. You will be wasting resources and you are taking away from the potential big wins in the marketplace.
What facts do you have that supports taking the risk?
It can’t be all about “gut feel” and “intuitive”, you must have facts that are creating interest in the project. There are landfills full of ideas that were a “gut feel” and “knee jerk reactions”. Do you have facts that support the decision? Is there a gap in the marketplace, are customers asking for it, do you see new emerging trends, do you have new insights you can leverage? You must have solid reasons and facts to risk your time, energy and money to take on the new risk.
One assignment I used for my teams in the past to help us make these decisions is to make 3 columns with these headings” What we know” (facts), “What do we think” (assumptions) “What do we not know”. The I would ask the questions, “What must we know that are in the assumptions and do not know columns to make this decision? How do we prioritize the list? How much will it cost to find out the answers? This exercise is very helpful in making the go or no decision on big projects.
Can you measure if it’s working?
We have all heard the phrases, “You measure what you treasure” and “What gets measured get done”, right.
If you decide to take on the risk you must have ways to measure if it’s working. You must have quantifiable measures, sales, profits, units sold, rooftop placement but you should also have qualitative measures, “ did we learn enough to go forward”, what should the next step look like? Great projects have great measures. Great measures have dates and people assigned to get the work done. Make sure you have all of this before you start a new project.
The biggest sin for a leader is to change the measurement after the results. This creates a culture that gets very comfortable very quickly not having real metrics because they know they can change the leaders mind later. Never change the metrics. You can new ones down the road, but don’t change the original metrics.
Do You the have the discipline and the courage to stop if its not working.
Leaders and organizations get emotionally attached to projects. They might spend a year or more working on them and when they clearly are not working they just can’t pull the plug. They continue to pour limited resources into plans that just are not going to work. Great leaders do not get emotionally attached to their projects. They are emotionally connected and passionate about their brand, but not projects.
If the project is not working, it will not be good for your brand. Let it go.