Lesson 3.5 | The Prepared Risk Taker™
TRANSCRIPT
The third superpower is being a PREPARED RISK TAKER. Now, some of you might shudder at the thought of risk-taking. It might feel a bit nerve-wracking, but it need not be. Remember, risk-taking is a part of business. Every decision and every choice involves some level of risk. In fact, not deciding and choosing not to act has risks, too, sometimes even more so. The truth is that taking too much, or too little risk can be equally problematic.
The same holds true for preparedness, which we discussed earlier when talking about the shifts. If we only focus on preparedness, playing to avoid losing, or defense, we will never score points and win games. In today's permacrisis environment, if we don't prepare, we may expose ourselves to unnecessary risks. In today's environment, with all that turbulence, this is even more so the case. The last thing you want to do is expose yourself to unnecessary risk. As with the other Superpowers, we need to do both.
What are the key behaviors and traits of PREPARED RISK TAKERS?
1. Think about sports for a moment. The offense scores points. You have to score points to win. Playing to avoid losing is not how you win games. You have to play to win.
Prepared Risk Takers take smart, considered risks. They strive to better understand the risks they take but recognize they can’t allow paralysis by analysis when you are in an imperfect and uncertain world. This is why it's important to pilot, test, and experiment. Make those small bets and learn before you jump in with the bigger bet. This type of risk taking is a central part of innovation in growth, too.
2. They understand that risk intelligence is the foundation of preparedness. They look at risks holistically and systematically. They recognize the interdependencies and interconnections and think about risk strategically. The more they understand risk, the better they can prepare for it.
3. Perfect preparedness is neither possible nor desirable; it's too costly. They understand becoming better prepared for the future is essential. What this means varies by company and context. PREPARED RISK TAKERS look across risks to identify common preparedness capabilities they can build and elements they can implement. Often, these are low- or no-cost items like a crisis communication plan, communication templates, or a remote work plan.
In some cases, companies develop playbooks for more common, significant risks. We do not know when they will occur, but we do know they will. These could include hurricanes or other natural disasters. You could have a playbook for certain competitor moves. If a competitor moves into your market, what will you do? The same goes for recalls and other predictable disruptions.
4. They combine insights from risk intelligence, smart risk-taking, and preparedness to make the best strategic decisions. They leverage risk strategically to their advantage, helping them recover from disruptions faster and be positioned to pounce on opportunities. The resulting outcomes and returns are much better.