In The Risk Paradox on April 9, 2010 by Jim McCormick Tagged: advertising, failure, innovation, mistakes, Nike, The Power of Risk, Tiger Woods
Once again proving to be bold and comfortable taking risks, Nike has started airing an ad featuring Tiger Woods. With all the controversy that has swarmed around Woods for nearly six months, not many companies would even consider associating with him. A number of companies that had previously used Woods’ name and image to promote their brands and products have parted ways with the golfer.
Did Nike do the right thing? It is too early to say. But my bet is yes.
What is clear is that this move is consistent with Nike’s risk-taking culture. They have consistently pushed the envelope to create a highly regarded global brand. When you can get people to pay well north of a hundred bucks for a pair of athletic shoes, you have some serious brand equity.
Consider this statement by Scott Bedbury as reported in Newsweek. Bedbury was head of advertising at Nike for seven years in the 1990s. He says the key to Nike’s success is its willingness to embrace “a culture of screw-ups. It really does learn from its mistakes.”
Mistakes and failure. Ah, yes – the other side of the innovation equation. When a company truly accepts and even values mistakes, innovation will follow.
In The Risk Paradox on March 9, 2010 by Jim McCormick Tagged: Business Lessons from the Edge, Contingency Thinking, human resources, intelligent risk-taking, The Power of Risk
While preparing for a webinar for human resources professionals I’ll be delivering later today, at the request of the client I was focused on ways to avoid worst-case HR scenarios.
The first method I’ll be offering for avoiding major problems are an awareness of the five primary reasons for bad outcomes as drawn from the interviews with forty athlete/executives when we were writing Business Lessons from the Edge.
The second method is a tool called Contingency Thinking, which is also from Business Lessons from the Edge. Contingency Thinking centers on thinking through in advance how you will handle a difficult situation, should it occur. You can readily see how this would be a popular strategy for successful business people who are also accomplished extreme athletes.
The third device is something that is familiar to anyone who has been following this blog, Intelligent Risk-Taking, which is from my book The Power of Risk. Intelligent Risk-Taking involves taking six specific steps that have the effect of increasing the chances of a desirable outcome and decrease the chances of an undesirable outcome for any risk or initiative.
The interesting commonality that surfaced while preparing for the webinar is that both Contingency Thinking and Intelligent Risk-Taking require discipline to be effective – the discipline to apply them faithfully.
This almost falls into the category of counter-intuitive. The common perception is that talented risk-takers are impulsive. The opposite is true. Talented risk-takers are actually methodical and disciplined.
In The Risk Paradox on February 17, 2010 by Jim McCormick Tagged: chosen risk, intelligent risk-taking, optional risk, rewarded risks, The Power of Risk, unrewarded risks
I was recently made aware of an excellent paper on risk that includes some fresh insights. The paper is titled The Two Faces of Risk – Cultivating Risk Intelligence for Competitive Advantage, was written by Steve Wagner and Mark Layton and is available at DeloitteReviews.com. I recommend it.
One of the more thoughtful insights presented in the paper is the concept of rewarded and unrewarded risks.
Unrewarded risks are similar to the concept of chosen risks as discussed in my last post. Unrewarded risks are the risks that have to be taken to function. They are focused on “value protection, not value creation.” They are the price of being in the game, if you will. And I will add that since they are mandatory in nature that they are often not seen as taken risks.
Rewarded risks, as presented by Wagner and Layton, are risks that have the potential to create value and are likely strategic in nature. These are similar to the optional risks as presented in my last post and in my book The Power of Risk (Maxwell Press).
The power of labeling the risks an unrewarded and rewarded is profound because it speaks directly to the motivation for taking them, of necessity and by choice, respectively. The concept also plays into a point I make often being that both organizations and individuals are risking more than they often perceive. It is the price of admission to what we call business and life.
In The Risk Paradox on February 8, 2010 by Jim McCormick Tagged: Avoided Risks, Chosen Risks, Optional Risks, Spectrum of All Risks, The Power of Risk
All the risks that an organization or an individual can take fall into three categories. In my book, The Power of Risk (Maxwell Press), I present them from left to right on a continuum as Chosen, Optional and Avoided Risks. In the aggregate, they are labeled as the Spectrum of All Risks.
Chosen Risks are those that are required for an organization or person to function. For a manufacturing company, simply producing a product and accepting the liability it creates is a chosen risk. For a person, driving a car is an example.
Optional Risks are not mandatory to function but still taken. For a company, this could be introducing a new project, for a person engaging in some form of recreation.
Avoided Risks are those that an organization or person is not currently taking. Examples include a company acquiring another company and a person changing careers.
There are a number of points made by this concept. Chosen risks make the point that some risks have to be taken if an organization or person is to function at all. We sometimes forget that we are taking risks of some sort constantly. Optional risks are the ones we take by choice likely motivated by a potential reward. Avoided risks are where opportunity lies. They are the risks not currently taken but they’re always candidates. Finally, risks can regularly move back and forth between optional and avoided. Whether a risk falls into one category or the other is a function of organizational or personal risk posture at that moment.
