The headline above ran recently in the Wall Street Journal. Kudos to the headline writer. “Wagers” is exactly the right word. Investing such a massive amount is indeed a bet – a gamble.
Some would say, “How can that possibly be justified! What responsible company would put such an enormous amount of capital at risk? How irresponsible.” And anyone making that statement would be entirely wrong.
All of business is about taking and managing risks – intelligent risk-taking. Successful business people do it well. Unsuccessful business people do it poorly.
From a solo entrepreneur to a global corporation, whether they succeed or fail boils down to how well they risk their capital, resources and time in order to get a return.
Shareholders pay corporate leaders to take risks. If they become too risk averse, their returns will decline and they will be replaced. If they become risk inclined to the point that their risks yield poor results, the same outcome will occur. Intelligent risk-taking is about finding the balance point between excessive risk aversion and excessive risk inclination, then executing well.
Some people manage significant risks well. This is what inspired me to write my latest book, Business Lessons from the Edge. I was intrigued to see what forty successful business people who are also accomplished extreme athletes had to say about taking risks well. In summary, they remind us that a risk-free life does not exist on a personal level, nor in a business setting – for long.
