Are You Taking Risks that Fly?

Smooth seas do not make skillful sailors -- African proverb

Why are some CEO’s ready to take risks while others bask contentedly in a short-lived growth spurt? Risk-taking is discussed daily by business leaders and pundits. But, what separates ordinary risk-takers from those who are extremely successful?

Overconfidence and overgeneralizing may be key components of entrepreneurial success for those who take the plunge, according to a study by management professors, Jay Barney of Ohio State and Lowell Barney, University of Houston. They studied 124 entrepreneurs and 95 top business managers to test confidence as they revisited answers to questions. While both groups were overly confident, the entrepreneurs were even more so. But, is overconfidence enough?

Just for fun I considered three prominent business bloggers' suggestions about risk-taking. What do you think?

Smart, Hard Work, Not Providence Word of Mouth Marketing “is smart, hard work, not providence,” according to Steven Sibukin. “It’s an outcome that requires a convergence of smart risk-taking, unyielding focus on a well understood target, and a keen strategy for initiating a dialogue with willing influencers at the right time. And, of course, a brilliant product.” Steve garners wisdom from Judith Clark’s marketing plan for Baby Einstein.

To develop a Word of Mouth Marketing plan, Sibukin suggests we reflect on the following questions:

• Who are the small handful of influencers that I most need to target upfront – and what is my high-touch, unique plan for winning them over?
• How will my Word of Mouth Marketing strategy need to evolve as my product awareness grows, and as other elements of my marketing mix get refined?
• How will I prove and maintain a genuine and authentic voice as my business grows and communication points proliferate?

As you approch influencers and supporters do you have a plan?

Risk-taking involves “doing your homework,” Tom Belford, at The Agitator suggests to avoid being a Happy Loser. Consequently, by the time you go out the door to meet a prospect face-to-face, Belford asserts, “you should be looking at closing the deal… If not, why not?”

Belford suggests savvy fundraiswers ask these questions before approaching potential doners:

• How thorough was your research?
• How much sifting of the wheat from the chaff did you do -- did you set priorities in terms of likelihood to give?
• How well did you prep your prospect, both in terms of tailored material and references from within the prospect's own network?
• Was there a specific reason or cultivation scheme behind a face-to-face meeting that wasn't intended to win closure?
• Did you send the right messenger, and was he or she well-prepared?

How might you update your approaches in future?

Risk-takers must tolerate the uncertainty and chaos associated with choices and decisions that are unconventional. Mike Wagner at Own Your Brand opens a window to understanding as he shares Mary Minnick's story.


Transformation Is Easy to Talk about – Hard to Do! In There’s Something about Mary, Mike Wagner tells the story of Mary Minnick, Coca-Cola’s President for Marketing, Strategy and Innovation. Mike applauds risks Mary or any leader takes to grow a brand:

Leverage chronic discontentment for the good of the brand. Minnick told investors, "I tend to be quite discontented in general." And, “It will never be fast enough or soon enough or good enough."

Wagner contends, “Too many business leaders have lost their hunger. Not their hunger for more money, but the hunger for intellectual, emotional, and relational challenges of the marketplace. Brands stop growing when the hungry stop leading.”

Embrace the pain of a changing marketplace. Mary Minnick is more than aware that onsumers are flocking to a new breed of coffees, juices, and teas -- all categories where Coke has been weak. According to BusinessWeek, PepsiCo Inc. has blown past Coke in stock performance, earnings growth, talent development and buzz. Pepsi now has a market value equal to Coke. Ten years ago, Coke was three times bigger. Brands stop growing when their leaders stop listening, observing, and growing with their customers.

Don't “work around” the problem. Minnick doesn’t apologize for her direct approach: “Historically, we had a culture where putting the hard issues on the table made some people uncomfortable.” Mild-mannered people, talking in soft mild-mannered tones about wicked problems, will not save the brand. Brands stop growing when leaders prefer unity over brutal facts and accountability.

Know transformational innovation when you see it. Coke has been unusually prolific by launching more than 1,000 new drinks or new variations of existing brands worldwide in the past 12 months. Some, like the brisk-selling coffee-flavored Coca-Cola Blak, have been hits. But Mary knows that, in the long run, new flavors and brand extensions won't be enough to make Coke a growth company again. She’s pushing to transform Coke from a soda-centric organization offering "me-too" products, to an innovative organization creating categories while identifying consumer trends.

“Transformation is easy to talk about -- hard to do,” Mike Wagner asserts. “That’s why many tweak their brands rather than transform their brands. Brands stop growing when leaders let their organization suffer from ‘hardening of the categories’ rather than embrace real change.”

Risks that transform old ways of doing business are hard because we are forced to step out of our basal ganglia, the part of our brain that stores business-as-usual approaches. Leaders willing to tap into their working memory to overcome problems, face challenges with possibilities and create innovative work cultures and products soon learn it takes extra energy, extreme focus and flow, as they go beyond talking, to live change.

Is super confidence enough for successful risks? In light of Steven Sibukin, Tom Belford and Mike Wagner’s wisdom, what are your thoughts? What would add wings to your risks?