Today’s blog is the 5th in a 10 part series on the Entrepreneurial Puzzle. Today’s installment is about assessing RISKS.
For the first blog in the series on the IDEA, click HERE. To read part 4 on DETERMINATION, click HERE.
There are many differences between someone that chooses a corporate job and one that goes out on their own to pursue an idea or a dream.
In my 35 year career in the travel industry, I have done both. I spent over 15 years in senior roles with billion dollar companies, largely responsible for new business ventures.
But it wasn’t until I was out on my own that I learned that what made me an entrepreneur at heart was my tolerance for risk – and my ability to create a plan to mitigate the risks.
In addition to a high tolerance for risk, a key characteristics of an entrepreneur is enthusiasm. To the corporate executive that is used to exhaustive research and risk assessment, when that enthusiasm is coupled with the drive that it takes to launch a new idea, the entrepreneur appears to be reckless.
But I would suggest something that is quite different. I believe that it is the speed of risk assessment that separates those that are more comfortable in a corporate environment than those that are entrepreneurs at heart.
I have spent the last 18 years helping companies break out of the status quo and create product and/or service differentiation that is customer centric. It has been amazing to watch the various processes that exist, particularly in larger organizations. It was not unusual for companies to spend months on strategic planning and budgeting and millions on research, only to convince themselves to remain with the status quo or to convince themselves that if they wait, the opportunity will get better or the risks will go away.
The analogy that I’d like to use is cheese as the business goal. In most businesses, the way things have always been done (aka status quo) is producing a sufficient amount of cheese. While you’ve had to work for it, once that is done, you go to the store, buy it and then it is available for eating or cooking. It is predictable and for the most part, it is safe.
But stepping out to do something new to get that cheese (or to pursue a new type of cheese) produces risk.
In the following three pictures, the mouse is up against significant odds in getting to the cheese. In each case, the mouse quickly assesses the risk and gets ready to go for it, knowing that there is peril involved. In the first picture, the mouse puts on the helmet, so that when the trap snaps, it won’t hurt (as much). In the second one, the mouse is preparing Tom Cruise style, to snatch the cheese before the trap closes, well out of harm’s way by coming in from above. And in the third, rather than going the long way around, the mouse is contemplating jumping the wall to get the cheese.
In my corporate experience, including strategic consulting that I have done for large organizations, we spent our entire time convincing ourselves why the mouse should not go after the new type of cheese and why the risk of danger was just too great, even with a helmet. Some couldn’t even envision coming in from above or jumping the wall. Needless to say, most of them are still plugging away on their core business, not pursuing the status quo.
Risk mitigation is actually a very simple process that unlike cheese, does not improve with time.
Solutionz has a proprietary process called RapidStrategy™ where we can work with a leadership team to assess both external risks (out of your control) and internal risks (generally preventable or at least more within your control) of any new venture. We do this in a matter of hours, not days, weeks or months. To understand and mitigate any risk, it is necessary of understanding the cause and whether there are any preventative actions possible and then knowing the trigger and the effect of the risk occurring and what contingencies you can put in place to reduce the adverse impact of that occurrence.
By going through this facilitated exercise as a leadership team, you will come away with a valuable tool that can be used to look at any new venture or even a new business approach.
Bottom line is that risks do exist. But it is possible to be prepared. Put on your helmet and go after the cheese. The status quo is actually way more dangerous in the long run and you will need more than a helmet to succeed.
Tomorrow we will talk about the need for ENCOURAGEMENT along the way.
Stay tuned.
And if you need help with your risk assessment, don’t hesitate to call.
Chicke Fitzgerald