Many years ago, I worked with a man who said that people misunderstand risk. His perspective was risk is a variable – it can be a differentiator that creates tremendous value, or if not managed, can make things go very wrong in your business.
I’ve adopted his perspective over the years. And he is right. The critical factors are deeply understanding the nature of the risk, how it can be managed and if you have the capabilities to manage it or someone else is better off doing with that role. If you can’t or don’t have a perspective on what the entirety of the risk is, don’t take it on.
Successful businesses and people understand this. They take on risks that they have the ability to manage, but carefully evaluate those they don’t so as to not risk the entire ship if it doesn’t go the way they expect. Do you have a good grasp of the risks in your business and how to manage them?