Risk can be considered in two dimensions: the first is risk due to external forces: customer problems, supply chain backlog, employee problems; the second is risk due to action or inaction by a business owner.<\/p>\n
While clich\u00e9, the concept of\u00a0working in the business vs working on the business\u00a0has relevance.<\/p>\n
Working in the business\u00a0encompasses things like implementing a risk management program with your insurance company, installing safety programs, policies and procedures, setting up the right coverages.
\nWorking on the business\u00a0takes on an entirely different character:\u00a0Are we doing the right things, and are we doing those things well?
\nInvestopedia offers this:\u00a0\u00a0\u201cAll companies face risk; without risk, rewards are less likely. The flip side of this is that too much risk can lead to business failure. Risk management allows\u00a0a balance to be struck between taking risks and reducing them.\u201d<\/p>\n
Perhaps the most significant challenge is myopia from being 24\/7 worried about the entirety of the business cycle as related to the business-executive\u2019s specific company. For this reason, many businesses set up advisory boards or actual boards of directors.\u00a0\u00a0These boards are often conservative to a fault.\u00a0\u00a0Throwing one\u2019s weight behind something new or different is controversial when compared to guarding the status quo.\u00a0\u00a0Innovation tends to happen outside the boardroom.<\/p>\n
In\u00a0\u00a0the early and mid 1980\u2019s the Andrew Jergens Company, \u201cJergens\u201d was stagnating from lack of innovation.\u00a0\u00a0A new type of computer, an \u2018IBM personal computer\u2019 had recently hit the market.\u00a0\u00a0In the face of this emerging technology, a key senior executive and board member declared \u201cWe will never let go of our mainframe computer\u201d. Within a couple of years, the Japanese company Kao Brands purchased Jergens.\u00a0\u00a0Many management positions changed hands thereafter.
\nThe seminal question for working on the business is \u201cwhat should be happening that is not?\u201d\u00a0\u00a0For Jergens, the answer was: much.\u00a0Product innovation, R&D, technology, process improvement, and equipment upgrades.<\/p>\n
Many companies die on the vine with rationale similar to that of Jergens.\u00a0\u00a0This is often termed \u2018bleeding out\u2019. The world is not standing still.\u00a0\u00a0Hungry, smart, well educated, and aggressive executives are making opportunistic acquisitions while others eschew any meaningful measure of risk.\u00a0\u00a0The opportunists are raising capital and buying companies in numbers never seen before.\u00a0\u00a0They take considered risks, hire the right people, and work on the business. And invest in acquisitions.\u00a0\u00a0This new wave of successful professionals and entrepreneurs take the helm and steer through turbulent waters.<\/p>\n
In the final analysis,\u00a0is the risk of doing something different preferable to the risk of doing nothing?<\/p>\n","protected":false},"excerpt":{"rendered":"
Risk can be considered in two dimensions: the first is risk due to external forces: customer problems, supply chain backlog, employee problems; the second is risk due to action or inaction by a business owner.<\/p>\n","protected":false},"author":2,"featured_media":57775,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[528],"tags":[550,547,530,549,548,545,546],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.capital-tactics.com\/wp-json\/wp\/v2\/posts\/57772"}],"collection":[{"href":"https:\/\/www.capital-tactics.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.capital-tactics.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.capital-tactics.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.capital-tactics.com\/wp-json\/wp\/v2\/comments?post=57772"}],"version-history":[{"count":1,"href":"https:\/\/www.capital-tactics.com\/wp-json\/wp\/v2\/posts\/57772\/revisions"}],"predecessor-version":[{"id":57774,"href":"https:\/\/www.capital-tactics.com\/wp-json\/wp\/v2\/posts\/57772\/revisions\/57774"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.capital-tactics.com\/wp-json\/wp\/v2\/media\/57775"}],"wp:attachment":[{"href":"https:\/\/www.capital-tactics.com\/wp-json\/wp\/v2\/media?parent=57772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.capital-tactics.com\/wp-json\/wp\/v2\/categories?post=57772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.capital-tactics.com\/wp-json\/wp\/v2\/tags?post=57772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}