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Diversify Your Business Risk through Shared Risk and Reward Programs

Diversify Your Business Risk through Shared Risk and Reward Programs Risk assessment is a principal tool used to make current environmental decisions, but it is still crude, expensive, and controversial.

While diversification is indispensable to managing financial investment risk, business leaders need to prevaricate their bets and manage their financial vulnerabilities.

Risk taking is the part of business strategy that involves assessing how a business’s decisions will damage or benefit the company. Every business encounters risks, which may or may not be anticipated or controlled by the company.

This does not mean you attempt into markets or embrace technologies you don’t understand, but instead that you look at what you are already doing and categorize natural market synergies and product line extensions. In addition, it is best to be ahead of the curve on market trends and changes rather than lagging behind them.

Leaders Comprehend the Value of Shared Risk and Reward Programs

There is no seamless diversification strategy. It is more of an art than a science. The significant thing is to protect your margins and stabilize your cash flow while growing your top line. For example, you may have some parts of the business that are in a fast growth mode and eating cash. In this case, it would be helpful to have other areas of the business that are growing more incrementally, generating surplus cash flow and steady margins.

Risk assessment is a form of analysis of the probability and magnitude of harm from various events and activities. Related to the science of risk assessment, risk management determines how to plan for and communicate about risks. Risk perception is a science devoted to examining the qualitative aspects of risk, not simply its quantitative aspects.

To bring together the various disciplines and implement integrated risk management, ensuring the buy-in of top-level executives is vital. These executives can institute the processes that enable people and resources across the company to participate in identifying and assessing risks, and tracking the actions taken to mitigate or eliminate those risks.

You may also have become too reliant upon one client and need to have a marketing strategy that pushes you to identify multiple new prospects that have the potential to grow with you in the same way. You may entered one market as much as you can and need to expand to other geographies. Never rest on your marketing laurels or get too self-satisfied. Companies needed to take advantage of regional management contracts.

I realize that business size does come into play here. However, regardless of how big you are, do not become a “one trick pony.” Anticipate that your business will have up and down periods and then think of imaginative ways to smooth out this curve. All good leaders understand and embrace the importance of diversification. To the maximum degree possible, put your fate in your own hands instead of being subject to whims of the marketplace.

Posted in Business and Strategy

Thinking Outside the Box Frustrates Leaders

Innovate with Less

Do you want to innovate with less, to see and play with patterns to achieve extraordinary results? Then stop thinking outside the box and get back into the box of your discipline, organization, and life. Rearrange what you have.

No one is going to give you more resources until you prove yourself. And the greatest outside-the-box (OTB) thinking will get you fired, discredited, and maybe killed if you can’t solve an immediate problem-now.

Everyone wants to think outside the box. But where’s the practical side of OTB problem-solving? It creates tension between innovative “outside” learning and the everyday constraints of a real job. Thinking OTB frustrates leaders who have to solve problems back inside the box of their work. OTB thinking denies our vital problem-solving capacity.

So I start in the toybox. I adapt lessons from how kids play to help adults at work. Play unleashes our performance innovation potential.

Unfortunately, our workplaces and our world also isolate innovators. So, thinking OTB doesn’t work for what many people need. When people return after an off-site retreat, they encounter unfinished work and resentful colleagues. Result: increased dissatisfaction with themselves, their work, and the innovation process.

We must innovate with less at work in order to see and play with patterns across multiple arenas of our lives, to achieve goals with what we have now, within the day-to-day realities.

Inside the Box: A System of Creativity

Inside the Box: A System of Creativity

To think inside the box, choose the right box and start playing your best game. Try taking these seven steps:

  1. See Mud, Find Grid. We work in mess. And the mess holds the key to improving our performance. If we can see and play with patterns we uncover in the mess of work, we can make decisions that will provide solid business value. No more indecision. We have to wade in the mud to grab the grid within. We have to find new ways to see and dig into our workplace mess. We must unearth powerful patterns that we can change. And we have to do it cheaply, quickly, and safely. But how? You guessed it: Think inside the box.
  2. Accept Your Messy Box. Welcome to work in our supposedly sparkly clean and tidy “knowledge economy.” Don’t spill on your computer. Print that spreadsheet. Get your feet off the desk! Work hasn’t always been so orderly. Our modern workplaces hide our messes behind reports, delicately presented in slick slide-shows by fashionable professionals. Thus, we miss the mess. Deal with the fact that you have to work inside a messy box filled to the brim with the murky politics, limited resources, pain, and pressure that come with earning a living and making a life through work. Now use your skills, talents, expertise, and creativity within the constraints of your workplace-your box-to innovate and excel.
  3. Name Your Mess. Mess is unfamiliar complexity. Today, leaders face more complex and unfamiliar challenges. Mess fills the gap between where we are and where we want to be. Define your stakeholders’ environment, resources, barriers, and opportunities into patterns for change, and you simplify their mess and maximize your effectiveness. Mess is unfamiliar, so fear it, right? Try again. We can’t think right when we sense fear. Innovative problemsolving inside the box defuses fear. You manage mess in a safe, familiar, dynamic, and respectful environment. Mess can be found and managed in three areas of performance: 1) internal dynamics-team-building, office politics, workplace communications, language, and culture; 2) external trends and influences-market forces, social norms, popular media; and 3) constant environmental change-restructuring, disintermediation, cultural diversity. Inbox thinking helps people change complex messes into defined barriers to excellence. With less stress, leaders identify next steps to solve messes just in time.
  4. Find Your Crystal Question. Want some change? You gotta ask. Define a critical question (related to issues, value, urgency, and meaning) to answer for your innovation springboard. Sometimes it’s easy to do; sometimes you’ll need help. I call this the “crystal question.” Find it. Here’s how: Summarize critical needs. Prioritize. Identify a change objective in language that has meaning for you. Reframe as a question. No off-site retreat necessary. Grab some paper. Start writing it down now.
  5. Use Only Four Words. You don’t have a lot of time. Find four key words that will crack open your box, unleash the mud, and reveal the grid. Use these four words to frame positive change in the first seven seconds of your call to action with your staff, boss, spouse, or others. An example: For one session, I wanted participants to see their creative power. The four words? “I am a poet.” The word POET then became an acronym for four activities. Whether the four words are a full sentence or four categories of change, you can use this to clarify your strategic innovation plan. The four words also help you make your message consistent when using different media (handouts, spoken word, slides, activities).
  6. Play More. You’re in the box. You’re in the mess. You have some tools to clear things up. Now you get to work.. .right? Wrong. Now you play. Before you go cleaning up the grid, first play with the mess. If you ignore the mess, the fear remains, more mess will build, and no change will stick. But people hate mess! No one wants to talk about it, much less play. Be creative. Defuse the fear. Find a safe harbor that can stand in for the mess-as simple as a cartoon you use to “hook” your audience or as complex as a structured series of activities around a relevant metaphor. Remember the key: Ground what you use in your crystal question. Above all, practice! You must play with the mess yourself, and then try it with trusted others. Make mistakes and learn from them. Many baskets, many eggs. Find many patterns for change, and activities to purse, since some workers may not respond. Trust your gut instincts and watch your audience. If it isn’t working, do something different. Also, be aware of your own patterns and habits-they can be part of the mess.
  7. Share Your Mess. See learning shift as your participants explore and manage the mess. In-box thinking allows people to use cognitive skills they may not use to solve problemsskills we use when we play.

Model Enthusiasm for Creativity, Support Success

Model Enthusiasm for Creativity, Support Success

Model learning through appreciation. Create respect. Openly express new insights. Praise ideas and new ways to think. Build excitement and commitment. Discover another way to interpret mess: “Model Enthusiasm, Support Success!” Process your mess. Devote time to debrief. Get people to apply their new clarity and ideas at work. Document and prioritize tasks, then act. Co-create responsibility. Hold each other accountable to make the patterns change after you in-box think. Here are some tips for playing in the box:

  • Participants will change your mess.
  • Be open. You can’t predict results.
  • Allow yourself to learn together.
  • Use simple, cheap, accessible stuff-pads and paper, markers, and toys.
  • Your passion can make it work.

Evaluate, celebrate, improve. Get feedback-formal (evaluation forms) and informal (hearsay)-on the change process. Reward yourself and your team for effort.

Congrats. You’re out of the box. Now get back in. Take the lessons you learn to make a better mess next time! The patterns you see, the ways you play, and the successes you stimulate may differ from one change effort to another. The principle remains the same: Use play to think inside your box to see patterns and options in new ways.

Our workplaces, our world, and our future depend on our ability to see and play with patterns in new ways. Luckily, we’re all experts. And, while it’s hard work, it can be a lot of fun.

Posted in Management and Leadership Mental Models and Psychology

The Science of Fear

Confirmation bias leads us to accept more readily perceived facts that keep to our existing worldview more willingly than objectively considering all of the evidence. Many corporate leaders leverage disruptive change by making targeted, courageous moves toward new market opportunities. Many companies face up to risk with a strategic framework based on extenuating and managing the probable consequences but that line of attack might build bigger protective walls without guarding against the greatest risks—the ones that are unidentified. The uncertainty advantage is something different: an approach that compels managers to recognize the unknown as a market differentiator and an opportunity to give a free rein to innovative solutions that appeal to customers, investors, strategic partners, regulators, and competitors. Concisely, it is an opportunity to go well beyond the characteristic meaning of risk management—that is, seeking ways to achieve the best of the worst outcomes—to create new and sustainable value out of confusion.

In his book, The Science of Fear: How the Culture of Fear Manipulate Brain, New York Times bestselling author Daniel Gardner describes some of our pitfalls when it comes to framing risk properly:

Once a belief is in place, we screen what we see and hear in a biased way that ensures our beliefs are “proven” correct. Psychologists have also discovered that people are vulnerable to something called group polarization—which means that when people who share beliefs get together in groups, they become more convinced that their beliefs are right and they become more extreme in their views. Put confirmation bias, group polarization, and culture together, and we start to understand why people can come to completely different views about which risks are frightening and which aren’t worth a second thought.

It’s also much easier to simply be afraid of that with which we can easily recall to memory. Gardner uses Daniel Kahneman’s two systems of thought to explain:

You may have just watched the evening news and seen a shocking report about someone like you being attacked in a quiet neighborhood at midday in Dallas. That crime may have been in another city in another state. It may have been a very unusual, even bizarre crime—the very qualities that got it on the evening news across the country. And it may be that if you think about this a little—if you get System Two involved—you would agree that this example really doesn’t tell you much about your chance of being attacked, which, according to the statistics, is incredibly tiny. But none of that matters. All that System One knows is that the example was recalled easily. Based on that alone, it concludes that risk is high and it triggers the alarm—and you feel afraid when you really shouldn’t.

Posted in Investing and Finance Philosophy and Wisdom

Six Drivers of Creativity and Risk-Taking

Six Drivers of Creativity

It is not enough to want to become more creative and to take more risks. To do so means challenging yourself, your team, and the organization. Moving out of our comfort zones is something we rarely do. Yet when we do, we gain insights into our own character. We can then reshape ourselves to the way we want. This is also the case with organizations and teams. But it means changing the culture.

The culture is reflected in what the organization or team values and how it does its business, as well as its propensity for risk taking and creativity. How does your organization view risk taking? Does your culture punish or reward people for taking risks? How willing are you to take risks at work?

Your propensity for risk taking is, in part, a function of the culture. If your boss doles out punitive measures for anyone who fails at a task, you play it safe. Or, if eyes roll when you offer an idea at a brainstorming session, you think twice about offering ideas.

The creativity or risk taking in a culture is consistent with the characteristics of one of seven orientations: Challenger, Innovator, Drean1er, Sustainer, Planner, Modifier, or Practicalizer. This composite profile becomes the group’s norm. Changing the group norm is difficult.

We need to focus on what we can influence directly: our immediate work teams and ourselves. Our efforts in these areas can yield powerful results.

Use these drivers of creativity and risk taking to build innovative capacity:

  1. Creativity driver 1: Ambiguity and its opposite, predictability. Operating in an ambiguous situation means dealing with uncertainty and vagueness. Those who function effectively in ambiguous circumstances don’t require highly structured situations, goals, or objectives to accomplish or create things, ideas, services, or products. Growth in this area yields innovative solutions. Since dealing with ambiguity is challenging, many people try to control variables, chart alternative courses of action, and eliminate the impact of uncertainty. The opposite of ambiguity is predictability. People who demand predictability require structure, clarity, and definition.
  2. Creativity driver 2: Independence and its opposite, dependence. Independence means not being subject to the control, influence, or determination of others. People who are independent will not subordinate themselves to others. They don’t like to be managed by others. They are self-empowered. They don’t have to be given direction. They don’t like to ask for help, believing their way to be the best way. Dependent people need direction from someone. They do not take action without prior approval.
  3. Creativity driver 3: Inner-directedness and its opposite, other-directedness. Inner-directed people and teams feel a great sense of purpose. They often have clear vision of the future. People who are inner-directed believe that they are responsible for determining their own destiny, expectations, and norms. They are guided by their own set of values. They sometimes believe that no one really understands them. Often, they have difficulty reconciling personal agendas to corporate directives. People who are other-directed are always concerned about what everyone else thinks or is doing. Other-directed people don’t take the lead without input from others.
  4. Creativity driver 4: Uniqueness and its opposite, conformity. Uniqueness is appreciating and valuing differences. People and teams that value uniqueness look for creativity in themselves and others. They foster it. They first look for the differences, not to accentuate them, but appreciate and take advantage of them. The opposite of uniqueness is conformity, acting in ways that conform to current styles, norms, or expectations.

Six Drivers of Risk-Taking

  1. Risk-taking driver 1: Authentic and its opposite, political. Authentic means being what you purport to be. Authentic people and teams live by their core beliefs; they mean what they say and say what they mean. Their actions are congruent with their espoused values. They “walk their talk” and “tell it like it is.” They take stands on issues. They are true and genuine. Its opposite is being political. Political people don’t communicate with others directly. They are always navigating or positioning for self-advantage.
  2. Risk-taking driver 2: Resiliency and its opposite, rigidity. Resiliency is the ability to rebound, adapt, and learn, even in the face of adversity and stress. Resilient people pick themselves up after being knocked down. They believe that something good always comes out of a bad experience. They create options. They persevere. They get the job done, sometimes by the force of their will. Its opposite is rigidity or inflexibility in response to change, rejection, or setbacks.
  3. Risk-taking driver 3: Self-acceptance and its opposite, victimization. Self-accepting means to be approving of one’s own behaviors or actions. Self-accepting people like themselves and their situations. They exhibit self-confidence. They are unlikely to say they’re sorry about much, because they have few regrets. They don’t try to be perfect. They like themselves, in spite of themselves sometimes. Its opposite is victimization. Victimized people complain and blame others.

If everyone on your team cultivated these drivers, your innovative capacity would accelerate rapidly.

Posted in Mental Models and Psychology

How To Fail Successfully

How To Fail Successfully

If you’re going to be a skillful sailor, you have to weather some storms. We build and expand skills by testing them, and that means that failure is an essential ingredient of success. It’s the weight that we lift for one set of repetitions but not three that we should be tackling in the gym. After we succeed at one weight, we seek the next weight that will ensure our failure.

The key to mastery is failing successfully. We fail successfully when failure does not take us out of the game (risk management) and when failure sparks adaptation and innovation. If we want to become a world class skier, we can’t remain content with tackling small hills. But we also can’t start at the highest peaks. In conquering trading hills we prepare ourselves to master the mountains.

Source: Brett Steenbarger

Posted in Philosophy and Wisdom

Learn to Make Paranoia Work for You

Learn to Make Paranoia Work for You

For most leaders, decision-making involves the dualities of increasing productivity but retaining quality; satisfying ecology but maintaining profitability; reducing service costs but insuring customer satisfaction. Leaders serve many constituencies: senior staffs, employees, stockholders, board members, customers.

Leaders are often unaware of their personal limits and the limits of their jobs: the job is often soul-consuming; martyrdom is a frequent refuge; and super-human responses still fall short.

In the past, leaders were encouraged to live with the demands of their jobs, reduce excesses through delegation, appreciate the achievements—the rush, respect, even admiration of those they valued. But such consolation didn’t last.

Why? It was a sane approach. It blended knowledge of both the nature of the job with that of the client. But the fears persisted: not being equal to the challenges; surrounded by untrustworthy and even back-stabbing associates; and an array of external forces and factors making success problematic. The net result was frequent and urgent callbacks in which CEOs spent all the time venting. The inevitable question then came: “Am I crazy? What’s wrong with me?”

Once I answered: “The job is crazy, and so are you. It is a mirror match. No divorce is possible. You have a tiger by the tail. Neither one of you will let go, and it will never change its stripes. Your paranoia goes with the job and with who you are. We have to bring it to the surface and accept paranoia as a norm. Then we need to find ways of making that paranoia work for you—making it protective, purposeful, and proactive.”

The executive was thoughtful. Then he said: “Clearly, I am not comfortable thinking of myself or my job in terms of paranoia. So, what’s the next step?”

I told him: “First, make a list of daunting tasks, people out to get you, and those cheering you on to failure.” As a result, this leader went from accepting to embracing the limitations of the job, from believing that there was nothing wrong with him to recognizing his paranoia.

I coach protective, purposeful, and proactive paranoia for leaders. Coaching should be situational: “If you had to deal with this situation how would you handle it?” Although coaching should focus on solutions, these should come from the mentee. But here the client was puzzled.

Three situations surfaced: threats, quandaries, and discontinuities.

Threats-protective Paranoia

I asked the CEO to make a list of threats, including: who is out to get me, who wants my job, who is undermining me or my plans, what factions are forming, what is the rumor mill saying about me, what is my standing with the rank and file, stockholders, and board members? Along with a to-do list, paranoia creates a to-worry-about list.

Heeding paranoia and making it serve protective ends, the CEO finds he has to make some changes. The first one is changing style and schedule of appointments. Meetings now need to be supplemented by information-gathering. Breaks become occasions for surprise visits. Early arrival can be coupled with buying breakfast for managers never known before. Lunches are devoted to disarming threats and spiking the guns of those who may be out to get you. Evening engagements involve inviting senior staff members and spouses for dinner or to attend a show or concert together. It’s sage advice: “Keep your enemies dose.”

The second major change is a reexamination of the CEO’s sources of information. Who tells the emperor that he has no clothes? What has been his relationship with his senior staff? Has he surrounded himself with “yes men”? Does he require constant approval with little or no dissent? Does he shoot the messenger? In short, has he inspired and developed ” followship”? Has he created a team that will protect him?

By operating from a base of paranoia, threats can be accepted as a norm not a personal leadership failing. The CEO needs to have an early warning system. Internal intelligence gathering should match the external monitoring of market and competition. Indeed, the first may feed into the second. Learning about internal capacity may directly affect market performance. Worrying about threats may save his job and his company.

Proactive Paranoia

Quandries-purposeful Paranoia

One benefit of valuing paranoia is relieving the CEO of the burden of having to be all knowing, all powerful, all successful, and indispensable. The CEO can’t be the only problem solver. The coach suggests the compilation of another list: what at work drives you crazy? What frustrates or compromises what you believe should be done? This paranoia requires a more reflective exchange. These are not direct threats as much as powerful enigmas that cause sleepless nights and undermine companies. And so the coach and the CEO seek to identify and unravel Gordian knots.

Although many will surface, the most difficult is how to persuade people to change behaviors or to alter basic attitudes and belief systems. The coach might ask the CEO: How often have you changed or resisted change? What helped or hindered you? What have you learned that can be applied? A second approach requires reconfiguring structures and roles so that change is welcomed not required, invited not coerced. In short, change the outside as a way of changing the inside.

To stimulate such thinking, the coach may introduce distributed leadership, including a leadership component in every employee’s job. Or, rotate leadership among team members. Or, shift the focus from changing people to changing environments that change people. The fear or paranoia of failure compels such actions because they facilitate thinking out of the box, and reduce attribution of failure to executive limitations. As with threats, paranoic inadequacy can be turned upon itself for insight, quandaries can become transparent enigmas; and the challenge of internal change can be converted to the challenge of external structures.

Discontinuities-proactive Paranoia

Increasingly, nothing remains constant and familiar. Twists and turns, breaks and new directions, shrinking of old markets, seeking new ones—these are the daily fluctuations leaders face.

Given such regular dislocations, the desire to hold on reinforces the resistance to change. The future then abandons the organization. Whep the coach and the CEO address the future, what surfaces is the stuff of which nightmares are made: assumptions, planning, and coherence.

  • Assumptions that good times will continue, that growth is assured, and that market share will remain secure make for happy days. But when discontinuity becomes a norm, assumptions analysis has to become the data of decision making.
  • Forecasts and strategic planning fail to serve as an early warning system, suffering from a reliance on assumptions. If the CEO asked all employees to invent the future, that would make everyone a strategic planner who would forecast how their jobs might change and what to do to prepare.
  • Coherence. The key is for the leader to find and articulate new common ground. It may be a combination of some previous beliefs that still have binding power with some new sources of coherence that await us in the future. Together these give commonality of purpose and flexibility to face discontinuity. Having graduated from the College of Paranoia, you are ready to lead others out of the wilderness of threats, quandaries, and discontinuities.
Posted in Investing and Finance Management and Leadership Mental Models and Psychology

Why Leaders Fail

Recently Ralph Larsen, CEO of Johnson & Johnson, stated, “Leadership is the biggest single constraint to growth at Johnson & Johnson, and it is the most critical business issue we face.” This statement may be endorsed by many other CEOs, yet solutions to the “biggest single constraint” seem to be in short supply.

For example, consider these findings:

  • Over a 10-year period, at least 50 percent of executives fail in their jobs.
  • In hospital leadership, 60 percent of managers are considered incompetent.
  • In one major aerospace company, 50 percent of the leaders failed.
  • No matter where or when the survey is conducted or what occupation is studied, 60 to 70 percent of employees state that the most stressful aspect of their jobs is their immediate boss.

Why the Dismal Results?

What accounts for these dismal results? Here are four findings:

  1. We assume that people with strong educational background, technical skills, or individual peak performers are our best candidates for leaders. How are leaders typically chosen? Usually those individuals chosen for leadership positions either have an impressive degree (like a Harvard MBA), strong technical skills (like a topnotch engineer), or they are individual peak performers (like super salesmen). But there is no evidence whatsoever that people with these backgrounds make effective leaders.
  2. We allow an outside search firm or an inside search committee to select our leaders. The track record of individuals thus selected are no better.
  3. We aren’t clear on what constitutes a successful leader in our organization. Some clarity is emerging, like the need for conceptual and cognitive abilities, emotional intelligence, self-awareness, and long-range thinking capabilities,
  4. We rely on our own implicit beliefs or “theories” and preconceived notions about what a successful leader “looks like.” For example, we may think that a leader must be tall, intuitive, agreeable, conscientious, extrovertive, or visionary. But such characteristics as physical height, agreeableness, and having a vision are our selection criteria not qualities that predict success.

What Can Be Done to Improve Leadership Deficiencies

Here are five ways we can improve the odds of success in leadership:

  1. Make the selection criteria and process more rigorous. Rely more on psychological testing and assessment conducted by highly experienced professionals.
  2. Concentrate on “action learning” developmental activities. Concentrate much more on activities that combine learning about group dynamics and leadership with tasks to get real work done (work, like creative thinking and planning, that the company has needed done for some time, but for one reason or another has not been done).
  3. Use multirater feedback processes. These processes enhance the leader’s selfawareness, which correlates with high performance. If the practices on which one receives feedback are related to organizational goals (like culture change), then there can be a win-win payoff.
  4. Coach the leader. Such coaching should be conducted by highly experienced professionals. For multi-rater feedback to pay off for both the individual and the organization, coaching is necessary.
  5. Treat leadership assessment and development as a critical business issue. Ralph Larsen stated, “leadership is the biggest single constraint to growth” and “leadership is our most critical business issue.” I dare say the same could be said of your organization.
Posted in Management and Leadership

Advice to Entrepreneurs: Microsoft’s Bill Gates on Overcoming the Feeling of Risk

Entrepreneurs are not necessarily more tolerant to risk and the possibility of failure than the rest of us. They simply define risk differently. Most entrepreneurs tend to prioritize incessantly and can afford to risk a few outputs for an outcome they believe in. Here is advice from Bill Gates on overcoming the feeling of risk. Bill Gates is the cofounder, chairman, and former CEO of Microsoft, the software and hardware company.

Bill Gates, cofounder, chairman, and former CEO of Microsoft If you’re going to start a company, it takes so much energy that you’d better overcome your feeling of risk. Also, I don’t think that you should necessarily start a company at the beginning of your career. There’s a lot to be said for working in a company and learning how they do things first.

On his management style: I do know that if people say things that are wrong, others shouldn’t just sit there silently. They should speak. Great organizations demand a high level of commitment by the people involved.

Source: “World Changers: 25 Entrepreneurs Who Changed Business as We Knew It” by John A. Byrne. John Byrne, a former editor at BusinessWeek and Fast Company magazines, co-authored Jack: Straight from the Gut with Jack Welch, former General Electric Chairman and CEO. In “World Changers,” John Byrne presents potent advice on entrepreneurism and fascinating insights into what it takes to succeed as entrepreneurs from successful business luminaries such as Apple’s Steve Jobs to HARPO’s Oprah, from India’s Ratan Tata to Brazil’s Eike Batista. John Byrne concludes that the three distinguishing characteristics of successful entrepreneurism are the opportunistic mindset, an ability to embrace risk, and sense of independence, control and urgency.

Recommended Reading

Posted in Business and Strategy Leaders and Innovators Management and Leadership

Advice to Entrepreneurs: Linkedin’s Reid Hoffman on Taking Intelligent Risks

Many entrepreneurs succeed by simply by merging the things they love with what they are good at. Here is advice from Reid Hoffman on four principles of entrepreneurism. Reid Hoffman is the cofounder of LinkedIn, the social networking website for professionals.

  1. Reid Hoffman, cofounder of LinkedIn The first principle of entrepreneurship is you don’t just accept the world as you find it. You figure out how you want the world to be, and then figure out if you can do something to make it so.
  2. The second principle of entrepreneurship is to take intelligent risks. There is a useful for some—“nothing risked, nothing gained.” By living, you take risks. So take them proactively. You can only achieve something of note if you take the risk.
  3. Take the road less travelled. Normally when people quote this Robert Frost poem, they mean self-discovery. When you take the road less travelled, you simply where the path down that many other people have walked. When you take a site that is, or make your own path, you have a much greater likelihood of discovering or making something very interesting.
  4. And the fourth principle of entrepreneurism is to plan for luck—both good and bad. It may seem paradoxical. How can you plan for the unknown? Actually, it’s rather simple. In terms of planning for good luck, you say other to push it is that you find in your travels—and jump on them. And by the way, you are far more likely to find opportunities on the road less travelled—which is an important part of the reason to choose the side or new path.

Source: “World Changers: 25 Entrepreneurs Who Changed Business as We Knew It” by John A. Byrne. John A. Byrne is chairman and editor-in-chief of C-Change Media Inc., a digital media startup Byrne was previously executive editor and editor-in-chief of and founding editor at Fast Company. Byrne is the author or co-author of eight books on business, leadership, and management, including Jack: Straight from the Gut with Jack Welch, former Chairman and CEO of General Electric. In “World Changers,” John Byrne interviews successful entrepreneurs like FedEx’s Fred Smith, Infosys’s Narayana Murthy, and Starbucks’s Howard Schultz and provides valuable insight into what makes entrepreneurs tick. John Byrne concludes that the three distinguishing characteristics of successful entrepreneurism are the opportunistic mindset, an ability to embrace risk, and sense of independence, control and urgency.

Recommended Reading

Posted in Business and Strategy Leaders and Innovators Management and Leadership

How Much Risk is Enough


In business, confidence and risk tolerance are liabilities. No leader can have sufficient insight into the future to be able to make an optimal decision about everything every time. Nobody can see around corners without fail.

Handled erroneously, the lack of calculated risk-taking can be lethal. It may result in overexpansion, profit, and revenue stagnation, failing to interpret signs in the marketplace and competitive positions and inadequate allocation capital to the right organizational pursuits.

Choices established on flimsy data and made on impulse can be hazardous. The better strategy is to assume calculated risks, work on a clear vision, put contingency plans in place, and be prepared to tackle tomorrow’s problems.

A prudent businessperson looks to achieve a healthy appetite for risks and contingency management to gain the confidence to weather business volatility and steer through tough times.

Posted in Business and Strategy