"Steal away, let's steal a car You'll never win a major only shooting par Step outside, feel the sun It's only you, be you, 'cause you're the only one."
Let's talk about risk and execution. Specifically and metaphorically, the risk of "daring to fly," to take a challenge, put your nose to the wind, and step off the ledge.
I do not think the risk lies in the "daring" part. The risk is in flight, the execution of the flight specifically; that is what you control. And if you control it, is it a risk at all? After all, risk is inherent in all we do. Get in your car today and drive. That's risky.
We are donning our Wingsuit this year. We are preparing to offer new services, even though we have "skunk-worked" this stuff for years. We are now ready to fly, to hang our asses out there officially. (More info on this soon.) Nonetheless, that was the easy part. The risk is not in that decision. After all, we will measure our success or failure by our flight.
So how do we manage this? How do we assure that we EXECUTE? By fully committing to the execution of that plan.
(Have I used the E-word enough in that last few sentences to make my point?)
Methodologies abound to guide us on execution. There are models, processes, theories, thesis, and concepts out there to help construct a path for quality and crafted execution. We have spent years tuning, refining, failing, succeeding, and always learning. As a result, we have refined our strategies to enable us to take risks with less consternation because we know that implementing our approach will mitigate our risks – or at least contain them enough to be acceptable learning opportunities.
Applying this principle of "Prep-for-Execution" as our posture when approaching risks has created "Risk Tolerance." This, in turn, generates "Risk Capacity."
This creates freedom to appreciate the ride and experience the joy – and I mean pure joy – of creating and constructing... executing. After all, that is where we get that wonderful cocktail of dopamine and adrenaline to feed us the joy and satisfaction we get from creative work and living a creative life.
So before you step off the ledge and spread your arms out to deploy the wings of your Wingsuit to take on that risk, practice the art of planning and prepare yourself to execute. And then EXECUTE.
Wait! What about using your gut to address business risks? Glad you asked.
I have been in this business slog for 33 years now and in the business of using the internet as a tool for 30 of those years. I have a "gut" feeling about this stuff because it's a three-decade-old, gut-based analysis system. I didn't trust my "gut" for the first five to ten years of P3. I still don't fully trust it now. That's not to say I don't have confidence in my "gut"; I do, but I use research, planning, grit, and a group of advisors/partners to hone and temper it. This process has created greater risk tolerance and bolstered our risk capacity.
Now it's time to fly.
PS. From our ChatGPT buddy, here are some theories for you to consider:
There are several theories of risk that are relevant to entrepreneurs and the world of business. Some of the most notable include:
Decision Theory: Decision theory is a branch of mathematics that deals with decision-making under conditions of uncertainty. It provides a framework for analyzing the trade-off between risk and reward in a systematic manner, and can be useful for entrepreneurs when making decisions about investments, product development, and market expansion.
Prospect Theory: Prospect theory is a behavioral economics theory that describes how people make decisions under risk. It suggests that people are more likely to take risks when they have a chance to avoid a loss, and are less likely to take risks when they have a chance to secure a gain. This theory can be useful for entrepreneurs in evaluating potential opportunities and making decisions about resource allocation.
Risk Management Theory: Risk management theory is a systematic approach to identifying, assessing, and controlling risks faced by an organization. It involves identifying potential risks, evaluating the likelihood and impact of those risks, and implementing strategies to mitigate or transfer those risks. Entrepreneurs can use risk management theory to assess the potential risks associated with their business ventures and to develop strategies for reducing or eliminating those risks.
Real Options Theory: Real options theory is a financial concept that views investment decisions as options that can be exercised or not, depending on future events. This theory suggests that entrepreneurs should consider the flexibility and opportunities that a particular investment provides, rather than just focusing on the expected return. Real options theory can be useful for entrepreneurs in assessing the potential benefits of investing in new products, technologies, or markets.
These are some of the risk theories that can be applied to entrepreneurship and business. By understanding these theories and incorporating them into their decision-making processes, entrepreneurs can make more informed decisions and minimize the risks associated with their ventures.
Marcelo Vergara, Owner + Operator
The bus came by and I got on... that's when it all began.
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