March 02, 2008

Risk Can Be Safe - Safe Can Be Risky

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Following my previous tips “Productivity Booster; Conventional Vs Innovative Mind”. It sounds like a contradiction to say, “Playing it safe can be risky” But, in fact, it’s prudent advice, and too often ignored by the faint of heart and unimaginative manager. Naturally we tempt to play safer rather than take risks. In simple word; safe is always our first priority in any aspect of our roles. But let’s re-think and go deeper with one illustration. The critical words are can be.


Here is the scenario for better ilustration:

For some time, your company, has been offering, in addition to basic system services, computer technology consulting. While your company has faced some competition, none of the other local company has had the resources to challenge you in the technology field and it’s become the business’s lucrative cash cow.

Lately, the company’s conventional system business has been a bit sluggish; thus revenues from consulting have been critical. Your company has been selling the same system packages for many years, and you have been reluctant to make the investment required to take on new software products or even to develop the necessary expertise.

Then one day a client mentions another company (which is your competitor) has made a sale pitch focused on the benefits of the new, more powerful system. The competitor, it turns out, had hired two IT supports who are recent university graduates with a specialty in computer technology.

Clearly it’s decision-making time. As a decision maker you confer with your sub-ordinat in marketing department (let say he/she is a marketing manager) to weigh the risks and opportunities of investing in new technology. Playing it safe is a rational choice; it conserves cash and doesn’t cut director’s, manager’s and employee’s income. And who’s to say that the tried-and-true software you’ve been selling isn’t still good enough for most of your clients. Not only is it risky to invest in new technology, but also there’s no assurance your clients will be better served by it.

The marketing manager, sensing your conservative bias, comes to a consensus: We’ll play it safe and sit tight for the time being.

After a few months, one of your smaller clients, considering a major expansion, realizes he needs more advanced software and transfers his business to the competitor company.

Then one of your very small clients leaves. It turns out that the technology competitor set it up with one of those low-cost, do-it-yourself system packages. You’ve resisted promoting such packages, fearing it would further reduce your income.

The loss of business is slow—too slow to sound an alarm of impending disaster. By the time you recognize the trend, it’s irreversible. This new, once small competitor now is established locally as the advanced business technology maven, and you’re left with a stable composed of mostly no-growth clients who, like you, failed to recognize that taking a risk sometimes can be smarter than playing it safe; or maybe they just didn’t have the courage to move forward.

If the scenario hits home, maybe it’s time to reassess your tolerance for risk. In this fast-moving business environment, it is not unreasonable to conclude you must “either grow or die.”

Keep practicing “Think Twice Thinking”, find another role in within your area you may be able to improve one of your role with an innovative touch, even if it may just small. Small innovative touch on most (if it has not all yet) of your roles, it is significant in accumulation.

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