Avoiding Risks and Missing Opportunities

By Tom Panaggio

Think you’re playing it safe by avoiding risks? You could be missing the opportunity of a lifetime.

When youre in charge of running a company, its easy to convince yourself that playing it safe is the responsible choice.Especially if your business is new, going out on a limb is the last thing you want to do. But risk is needed if you want to do more than just scrape by and it may be needed just to survive in this economy.

Hoping that sales will get better or that conditions will improve is the wimps approach. You cant wait for everything to be perfect because it never will be. You have to take action in other words, accept risk and make those things happen.

I know about risk firsthand. Along with several partners, I have created and built two successful companies: Direct Mail Express (DEM), which now employs more than 400 people and is a leading direct marketing company, and Response Mail Express (REM), which was eventually sold to an equity fund, Huron Capital Partners. As those companies have adapted to a shifting marketplace and an uncertain economy, I have had to take numerous leaps of faith.

Even with the best attitude and plan, there are times in every business when, as progress slows, confusion sets in. You may feel frozen and afraid that any move you make will be wrong. However, if you dont want to stagnate, you have to move. Unfortunately, this type of risk is the most difficult one to take. Youll probably want to find ways to avoid action, which is tantamount to sinking your own ship.

Here are 10 of the most common forms of risk avoidance that may be holding you back.

Excuse #1: The timing isnt right.” As a young commodities broker right out of college, I received a call from a client named Steve each morning. He was a prisoner of hope” who always asked the same question, Where is gold this morning?” When gold was higher than the day before, hed comment, Ah, missed it again.” If it was trading lower, he said, Lets wait and get it at the bottom.” Steve missed the biggest increase in gold in more than 50 years because he waited for the exact moment to make a move, and based on his perception, that moment never came.

All over the country, there are entrepreneurs or wannabe entrepreneurs who are just like Steve. Business plans sit in boxes or on hard drives as their creators wait for the right conditions: funding, free time, better economic conditions. And plenty of existing businesses remain less successful than their owners would like because those very same owners are hoping that tomorrow conditions will be just a little bit better for advancing their goals.

Keep in mind that being a “prisoner of hope” doesnt just apply to growth. Besides forgoing an opportunity for success because they are waiting for ideal conditions, many leaders fail to solve problems or correct mistakes because, in their minds, the timing wasnt right. And when youre bootstrapping a business, a mistake can be even more costly than not leveraging a chance for advancement.

Excuse #2: I tried that once, and it didnt work.” Those words are most often uttered by small business owners in reference to marketing. Perhaps youve been there: You allocated a large part of your budget to producing a television commercial, for instance, but barely noticed any increase in your business. Or maybe you offered an online deal to new customers, only to realize that the discount you advertised was a little too generous and wouldnt allow you to make any profits. Your one-time marketing failure has convinced you not to try again.

Yes, marketing is far from certain. It can be expensive, and its hard to accurately predict what customers will respond to. But without proactive long-term and consistent marketing, businesses die. Avoiding investing in marketing or even cutting back on it because one campaign didnt produce the desired results is a risk you cant afford to take.

Excuse #3: If I just had XYZ gadget” If I just had faster computers, my team could respond to customer emails on a more timely basis.” If I just had the latest supply chain management software, my company could fulfill orders more quickly.” When youre an entrepreneur, there are a million If I just had”s, and often, they center around technology. Remember, though, you can spend forever waiting on the next best thing and often, that next best thing” isnt as necessary as you thought.

On the infrequent occasions when the Internet in my office goes down, everyone has one concern: “What should we do now? Go to lunch?” My answer is always this: “If you were on a deserted island with no supermarket, would you just let yourself starve, or would you figure out a way to survive? You may not be online, but your phone still works. Pretend the Internet hasnt been invented yet and call a few customers. Survive.”

My point is, by viewing technology as a necessity, we create our own prison. We no longer use it as a tool. Instead, we are trapped by it. Remember, the road to success is through
action, not accessories. Countless success stories have been written with nothing more than ink and paper, a rotary phone and plain determination. While tools, technology, and accessories might be helpful, they do not guarantee success. Effort guarantees success you have to keep your foot on the accelerator longer and more often than your competitor.

Excuse #4: Im still working on the plan.” Lets say that you want to move to the next level, whatever that happens to be for your business. So you begin planning, preparing for every possible scenario. You define contingencies with backup plans full of redundancies. You sometimes wonder how anyone could fail with a plan that covers all possibilities and that offers each a solution. But heres what youre not taking into account: While your perfect plan might prevent you from failing, it will also hold you back from succeeding if its never executed.

To be absolutely clear, planning is a good thing. However, for many entrepreneurs, the solution to avoiding the risk of reality is to keep planning. After all, they tell themselves, you must have a plan to be successful; “winging it” is a blueprint for failure. The fact is, with planning as a comfort zone, you can easily replace the reality of execution with theoretical forecasting and “what-if” modeling. For that reason, many risk-averse entrepreneurs miss opportunities and fail to build actual businesses in the act of building virtual businesses. Dont make that mistake.

Excuse #5: Its a good idea, but circumstances have changed.” I was ready to pull the trigger, but then the market changed and I had to reassess.” I had to set back the original product launch date because I was just too busy to get everything ready.” Preliminary research showed that this idea might not be as lucrative as we thought, so we scrapped it altogether and went back to the drawing board.” Sound familiar? If so, you may be moving the target.

Basically, moving the target changes the objective, goal or focus of your business and thus delays plan execution, innovation or change. In other words, it means changing your plans every time you lack certainty or just dont have enough motivation to move forward. The problem is, each time you move the target you have to stop and prepare to fire again. Its possible to spend an indefinite amount of time making excuses in this way without ever accomplishing anything.

Excuse #6: Ill get to it eventually.” Consider the case of the salesperson who did extensive research on each sales lead she got. Some of her research files contained more than a hundred printed pages of material. Her reasoning? She wanted to know as much as possible about a potential client before she called them. On the surface, this level of dedication sounds admirable. But the salesperson was really procrastinating in order to put off the moment of truth. She was afraid of being rejected after making her pitch, and her research was a form of risk avoidance.

A similar scenario plays out with business owners every day. No, you may not be making sales calls, but theres no shortage of delaying tactics that can be used as a buffer between you and risk. As an entrepreneur, you have to stop telling yourself the lie that youll “get to it eventually.” If you immerse yourself in busywork in order to avoid the true priorities, your business wont last long enough for you to tackle them at some undefined point down the road.”

Excuse #7: Im playing a defensive game.” The hardest risks for cash-strapped entrepreneurs to take are often financial. Many business owners choose to cut costs and (at least attempt to) do more with less when what they really need is to hire new talent, invest more heavily in marketing, upgrade their machinery or something else.

Unfortunately for many owners, no business achieves greatness solely by pinching pennies although financial responsibility is certainly a big part of sustainability and growth. The truth is, you can save your way to mediocrity, but not success. So dont tell yourself that youre playing the game if you never come off defense. Nobody ever wins without picking up the ball and running ahead in spite of obstacles.

Excuse #8: Nothings broken; why fix it?” When youre facing a crisis that could damage or even sink your business, its (fairly) easy to take risks. After all, if you dont act, youre doomed and in that situation, theres probably not much to gain by holding back. But what about the times when things are going smoothly, when you may have more to lose by going out on a limb? Well, then its much easier to convince yourself that theres no need to tamper with the status quo.

When nothing is actively going down the toilet, its easy to tell yourself that things are fine, that the future is rosy and that you dont need to put yourself out there to improve. However, that kind of thinking is a good way to be left behind or to become irrelevant. Customers dont always leave because they had a bad experience with your company the reason is often that they simply had a better one with someone else. Remember, risks need to be taken when business is good and bad if you want to stay cutting-edge and competitive.”

Excuse #9: ” Thats the sound of silence. You know, what you hear when you decide to let a project or initiative die over time instead of doing whats necessary to bring it to fruition. Whether you simply lack motivation or your surrender is fear-driven, your risk-avoidance behavior may be taking the form of lack of follow-through.

For many business owners, the desire to succeed is there and so are some good ideas but they struggle with making the rubber meet the road. Maybe youre afraid of being held accountable if you dont meet expectations or you simply find that you dont want to put in the extra effort, after all. So you sit back and let projects peter out instead of driving them forward or definitively putting them out of their misery. (You may even be fooling yourself into thinking that others dont notice that you talk a big game but dont deliver.) Dont allow your mind to sabotage your desire to meet your objectives.

Excuse #10: But I dont avoid risk!” Even if you, the business owner, have conquered your fear of risk and move into uncharted territory without hesitation, progress paralysis might still be affecting your company through the actions (or inaction) of your employees. If you as the owner dont, well, take ownership of your teams counterproductive behaviors, you could miss out on a lot of opportunities.

Your salespeople might be stuck in the comfort zone of creating safe, but boring, pitches, for example, or your ad designer might be creating a backlog because shes a prisoner of perfectionism. If thats the case, maybe youre simply so focused on leading your business that you havent kept a close eye on its inner workings, trusting your team to be as bold and efficient as you are. Or, more likely, you have noticed risk avoidance behaviors that are slowing your organization down, and are simply reluctant to confront your employees a form of risk avoidance in and of itself!

Risk avoiders live in a false reality. The temporary comfort you gain from rationalizing your inaction just postpones the inevitable. Hoping that something will change will result in defeat, the end of your dream. Success comes only via constant forward progress, which requires making something happen. As a leader, your example of enthusiastically seeking opportunity to execute, improve and deliver results will be the beacon that guides all who follow you. So stop avoiding and start acting.

Tom Panaggio, author of “The Risk Advantage: Embracing the Entrepreneur’s Unexpected Edge,” has enjoyed a 30-year entrepreneurial career as co-founder of two successful direct marketing companies. His practical approach to business concepts and leadership is grounded in the belief that success is the result of a commitment to embracing risk as a way to ensure opportunity.