How to balance risk-taking with healthy skepticism
As a business of any size we are challenged every day with making decisions that impact employees, clients,
vendors, top line revenue, and bottom line profit just to name a few. Something as simple as which supplier to use for
the same product, or as vital as which funding option fits todays needs with minimal long-term costs/risk. And this is
not just an amazing job description that is reserved for the top of the business. All level of employee makes decisions
every day that have an impact company wide.
The first step is to outline the best- and worst-case scenarios of the decision! After that here are 5 ways to help guide
the decisions making of your business when there is risk involved.
1. Make sure to have set, easy to understand, missions for the business – In almost every decision there is a
compromise made between the benefit in one area and possible challenges in another. If the entire business
knows and understand the mission of the business, it makes it easier to decipher which options gets the
down side of a decision.
For example: you want to upgrade some of the field equipment, deciding which pieces that go first should
align directly to the mission of the business. If you are a roofing and siding company that is starting to focus
more on roofing it doesn’t make sense to replace the siding equipment first. The roofing equipment better
aligns with the newest mission of the business to focus on roofing projects.
2. Think Long-Term Value over short term problem solving – When you think longer term it is easier to
understand the risk-taking short term. A lot of times the easiest or least expensive solution in the moment
does not keep you on track for the long-term vision. Obviously, you cannot always pick the hardest and most
expensive solution but weighing the pros and cons compared to a long-term vision instead of a short-term
problem will help you keep a proper balance on risk v. reward while keeping the ship faced in the proper
3. Ask for Help! – You will NEVER be an expert in all aspects of your business. You hire people to play roles
within your business that are not in your wheel house. Use their knowledge from being in the trenches
dealing with the problems you are trying to solve to your advantage. Getting their input and point of views is
important not just in the decision making but the implementation of the solution. I have seen it so many times
that a new product or service or software is implemented without the input of the peoples whose jobs it is to
execute the plan and it flops on its face because you had minimal to no buy in on it. Then even if the solution
doesn’t work you have a group of champions that will help you analyze and adjust. They were part of the
decision-making process, so they are more likely to help resolve unforeseen issues with whatever was
4. Don’t be afraid to talk to an expert – There are plenty of fake “experts” out there. Claiming they know
everything you need to know and here is a price tag for that knowledge. Then it turns out they were full of
shit and you get stuck with a bill and no additional insight to help you solve your problems. Sometimes the
expert you need is a competitor or other industry partner. There are plenty of people out there that you don’t
want to get advice from but there are even more people who have been where you are and would love to
help you learn from their mistakes. Simply ask a round and take in the ideas and you may surprise yourself
and someone gives you an angle that you had not thought of that creates clarity around the solution you
need to move forward with.
5. Nothing is as good or as bad as you think it is – So many people I have worked with get paralyzed on a
decision because of the worst-case scenario they concocted in their heads. They believe if they take the first
step that the second step will be catastrophic failure. That is just simply not the case. I have also seen
people jump at an opportunity because of the initial upside they thought would happen without reviewing all
possibilities of failure. Bottom line is having faith in your ability to analyze and adjust to what happens as you
work through a decision/solution is how you win or lose. Likely it will not turn out as good or as bad as you
have planned for, but that doesn’t mean it isn’t the right decision.
These are just a few of the things I have seen work when balancing risk-taking with healthy skepticism. Bottom line is
your need a process that includes all of the above to run all major decisions through to improve your comfortability
with pulling the trigger. You will never have all the information and the bigger the company or problem the less info
you will have when a decision needs to be made. So trust your process buy first creating one!