A smart risk seems like an oxymoron. How can something that is defined as chance, possibility, danger, or peril ever be smart? Well, when it comes to business, risks are a little different than, say, trying to cross the street in heavy traffic or eating that meat in the back of the fridge that looks and smells a little suspect. Business risks—when executed with thought, purpose, and understanding—are less risky and more culture-defining and result stimulating.
In fact, even when they fail, there is something gained from these types of intelligent risks. But how can you tell the difference? Who’s to say one action is more or less risky than another and how can you lead your business to jump into the latter? It’s not exactly simple, but with some info and understanding, you can begin to develop your strategies to include smart risks that could lead to incredible outcomes.
What is a smart risk?
Let’s start with what is not. An unintelligent risk would be swimming in water when there is a sign that clearly states DO NOT SWIM. You’re risking your safety and wellbeing for taking a dip—the negatives of this risk don’t outweigh the positives. It’s a dumb risk becuse there is no reward worthy of the bad that can occur.
However, a smart risk is considered an opportunity where the potential gain surpasses the potential loss. A smart risk would be noticing that natural deodorants and toiletries are on the rise, so you take the risk and open a virtual marketplace where people can purchase these products at wholesale prices, eliminating the need to go through many overpriced, expensive suppliers and companies.
Would you lose money initially? Yes. Would it be difficult to build the brand and figure out how to provide cost savings for customers? Yes. Would knowing your market, investing in research, strategy, brand, and digital marketing help you succeed? Yes. Sometimes, you have to weigh the risks versus the rewards and determine which you can live with and which you can’t live without. If you can’t live without trying to achieve the reward, your risk is likely smart and worth pursuing—your opportunity to succeed makes this a smart risk.
But how do you know it’s worth pursuing?
You will never be 100% certain the risk you want to take is going to work out—that’s why even smart ones are still risks. The ones worth pursuing are done with intention, research, and a serious processing of the endeavour in which you’re about to begin. First, if your risk is something that will completely bankrupt you if you fail, ruin the lives of your employees, or set a building on fire, it is not a smart risk.
If the risk you want to take is based on market and industry trends and research, produces excitement within your workplace and leadership team, or—if you fail—will create a safe environment to support healthy risks (while also not completely destroying your office ecosystem), it’s an intelligent risk, and one that could positively impact your workforce even if it fails.
Why failure is more than okay
Without taking risks we remain stagnant, and stagnance doesn’t foster growth, change, or progress. Even when smart risks fail, they provide the ability for leadership and employees to feel safe sharing, developing, and proposing new ideas. Think of it this way: they make movies about Stephen Hawkings, Steve Jobs, Nicola Tesla, and Ruth Bader Ginsburg because they endured failures to achieve their success If they simply succeeded without learning from failure, their stories wouldn’t hold the same value, and would be boring at best.
If you’ve evaluated what will happen if your risk fails, and you know you will survive it, even if it’s difficult, that failure isn’t going to define you. Some of our most treasured minds were failures long before they were icons.
How can smart risks build culture
There’s a reason why the phrase “no risk, no reward” exists: it’s true. To truly excel and achieve maximum growth within your brand, you’re going to have to roll the dice at some point. Whether it’s a new marketing strategy, campaign, or total rebrand, shaking things up and trying something new, even if it feels scary, is necessary—not only for results, but to build your culture.
A business where employees feel stifled, nervous, or silenced is one with an absence of culture. One of your employees may hold the golden idea that could skyrocket your brand—but if you’ve created a culture where no one feels comfortable risking their opinions, ideas, and thoughts, that growth is dead in the water.
The more your teams feel they can express their creativity, the more likely they are to brainstorm and strategize how to create new impact within your brand, the more likely smart risks will develop and new leads, revenue, and growth opportunities will occur.
To avoid having people taking risks that are the polar opposite of smart, set boundaries, goals, and outlines for what a smart risk means to your company. Encourage others to follow these guidelines so risk management is easier for leadership and of course, never force people to take risks they aren’t comfortable with—this only leads to a culture of fear, and as we’ve learned from horror movies: no one makes smart decisions under the influence of fear.
Feel like getting risky? We’re here to help you make smart risks when it comes to your brand with a range of services that can boost your business and create a serious impact. Reach out — it just may be the smartest risk you ever take.