While it is true that all businesses encounter risk, enterprises survive and prosper through the systematic reduction and management of such risk. Persistent risk costs companies money and robs them of efficiencies. Risk always stands between a company and some major innovation that will stimulate growth. Successful executives may not fear risk but they have their own kind of aversion to it. Risk impacts productivity, profitability, and growth. Those who are risk-averse can be assured that their desire to eliminate risk is shared by all successful business executives.
The challenge that the risk-averse often face is that they are unable to move beyond their fear. If they, like a successful executive, could learn to manage risk, their aversion to a particular risk would be reduced and possibly conquered. The risk-adverse should understand that overcoming the fear of one particular risk could lead to personal gain. Even for the chronically risk-adverse, the success of overcoming one risk will likely embolden them to take on the next. That is what great companies do: they recognize, assess, and take on risk, resulting in sustained innovation and growth.
Successful businesses take on risk to develop product and service innovations, face competition, enter new markets, etc. They never take on risk because they revel in it. Overcoming risk leads to competitive advantage and gain, and successful businesses are always purposeful about measuring, assuming, and overcoming risk.
The innovator and the entrepreneur must accept and deal with risk. No great product or service breakthrough can be accomplished without the conviction that risk can and should be overcome and managed. No business can survive in a constant state of risk. The key to a business’ survival, growth, and success is to become better at overcoming risk than its competition.
Authored by: Dan Gregory