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Don’t misunderstand. I’m not advocating knee-jerk decisions or irrational behavior. Risks in business should be taken only after deliberate, careful planning with rational risk estimations of a likely outcome.
It’s just that the unsteady times we’re experiencing now are no worse than any of our previous unsteady times, and companies that take risks during unstable times often come out ahead later on.
What about the increased likelihood of failure?Critics might look at the current economy and be concerned about business failure.
Interestingly, since World War II, in only two time periods have we seen an increase in business failures, and both occurred during times of economic prosperity. One of those time periods was 1979 to 1986 – a time many remember for its continuous economic expansion!
Essentially, no risk means no reward. I love the story of J.C. Newman, who, in 1890, was only 14 years old and an immigrant to the United States. He became an apprentice cigar maker and worked in the trade for five years – until a recession resulted in massive layoffs within the industry.
At 19, the unemployed young cigar maker took a risk. He borrowed $50 for tools and supplies and began his own cigar company. It would have been easy to criticize Newman for making such a move during a recession, but within five years Newman’s company had grown to 70 employees. It grew even through the Great Depression, and the J.C. Newman cigar company is still thriving today – all because one young man took a risk more than 100 years ago.
You can’t move ahead if you’re hunkered down
What I’m trying say is that sitting in a corner during a slow or erratic economy and waiting for things to get better is probably not the best thing to. Sure you might not hear from as many critics, but your chances for future success are greatly diminished, too. IWheelExamine the horizon. Look for opportunity. Think! Rationally map out the “what ifs” for different scenarios. Don’t just go one level or even two. Drill down three, four, or even five levels of thinking.
One of the best tools I’ve found for doing this is the Implication Wheel, created by Joel Barker. It’s not a decision-making tool, it’s a decision-enhancing tool; designed to guide thinking when calculating the likelihood of different events occurring.
When you can have a better handle on predicting potential future outcomes from your actions you are likely to make better decisions.
Estimating the potential benefits and potential pitfalls allows companies to see the best possible paths for stepping up and getting a foothold while others are stepping back to “wait the storm out.”
Then, when the economy turns strong again, those companies with a foothold will be in a better position to make great gains.
Why we should push through
A former boss of mine often told a story about a cigar company that did not fare as well as the J.C. Newman Company. Although I’ve been unable to verify the story, he told of a popular cigar company that decided to save money during the Great Depression by cutting out all its advertising.
They were the third-largest cigar company in the world and everyone who smoked cigars knew their name. Their rationale was “why spend the money on advertising since everyone knows who we are?”
Their decision was short-sighted. The company’s sales dropped terribly. In fact, the company was unable to recover from their mistake and they folded. Essentially, their choosing to cut advertising was not logically evaluated to any depth.
That was the 1930’s. But with all the decision-making, decision-enhancing, and analysis tools available today, there’s no reason anyone should be making irrational decisions.
The bottom line is that we have choices
An unstable economy may seem like a good time to hunker down and ride out the storm, but is that really the best choice for the long term? Would taking a few calculated risks now pay huge dividends for you down the road?
Only you can know for sure, and the best way to answer that is to spend time thinking and asking a lot of “what if” questions. Map it out as you go.
Doing so will increase the likelihood of your success – despite what the critics may be saying.
Dan Bobinski is a training specialist, author, and an accomplished keynote speaker. He is also the president of Leadership Development, Inc., providing workforce and management training to Fortune 500 companies as well as smaller, regional concerns for more than 18 years.
In addition to being a certified behavioral analyst, Dan holds an M.Ed. in Human Resource Training and Development, a B.S. in Workforce Education and Development, and he is currently completing his doctoral work in Adult and Organizational Learning at the University of Idaho.
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