Risk and Vision

The first rule to apply when evaluating risks is that it must be avoided in all cases unless it is consistent with the long- term vision of the company. All risks that are consistent with the vision are worth taking. All other risks are not.

Secondly, a company should never take risk on financial issues or on people. These two areas are just too valuable to tamper with. Companies should be financially conservative if they want to continue growing their profits consistently. Furthermore, they should not hire anyone if they have the slightest doubt about the ability of the new hire to excel in the job. The hiring and training process is simply too costly to take any risks in new hires.

Product development risks are generally worth taking. That is because in most cases product development furthers the vision of the company. If there are risks in product development, that often means the development is hoping to take the product to a new level. Accepting such risks will challenge the development team to rise up and go the extra mile to make the product the new product successful.

But as a general caution, marketing risks are to be avoided. Marketing must be based on a sound understanding of the customers buying behavior. In general, ambitious and risky marketing campaigns over- promise and under-deliver. They often appear attractive but never quite pan out as intended. Therefore, a company must try to avoid marketing risks and stick with true and tested ways of promoting the products or services.