Risky Business – When To Change Up Your Strategy

Risks. We all take them, some of us on a daily basis. Whether it’s pairing that shirt with those shoes, repeating a hilarious but tasteless joke, or betting on yourself to hit the snooze button just once more and still make it to work on time, the thrill of overcoming the odds, however small, is a fundamental part of what makes life bearable. How dull would it be if we played it safe all the time, if we settled only for what’s most comfortable, what’s easy? We need to step outside of ourselves occasionally, if only to savour what we might be missing.

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But it’s a different equation when it comes your business. The costs of the wrong fashion choice, joke, or nap extension are pretty minimal – in a month, chances are no one will remember, except for the repeat offenders (you know who you are). But in business, your job might be on the line. Make a big enough mistake, and everybody’s jobs might be on the line. The higher up you are, the more people are relying on you in some form or other: bosses who need you to do a good job, investors expecting a healthy return, staff trying to put food on the table. It’s not just you you’re risking.

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Under Pressure

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It’s daunting to make decisions that have so much riding on them. It’s especially understandable to play it safe given the current climate of austerity, following one of the greatest global depressions ever seen, caused by, you guessed it, a period of unsustainable and extremely destructive risk-taking. And it’s common sense that, when faced with this kind of pressure, decision makers stick with to their go-to formulas, the processes and methods that got them where they are today. After all, you know what they say: “If it ain’t broke, don’t fix it.”

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Except if it isn’t broken already, it probably will be soon. The pace of change in society in general, and business in particular, means the methods that worked 20, 10, even 5 years ago aren’t the best way to operate now. Just look at SEO – who’s using keyword stuffing these days? Sure, these techniques might struggle on for a while longer, but it’s a law of diminishing returns, and it won’t help your business grow, or even keep pace, for very long. Great businesses are ahead of the curve; some even push the curve themselves. But how?

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The Good, The Bad, & The Sigmoid

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In Empty Raincoat, his guide to making sense of the future, Charles Handy discusses the idea of the Sigmoid curve. In business as in life, there is a detectable cycle through which people, organisations and industries go – Learning, Growth, Decline. In and of themselves, cycles are not a particularly novel concept, but what makes Handy’s school of thought stand out is the Sigmoid leap. Here, the Decline phase is minimised or skipped entirely, leading to alternating Learning and Growth. The only way to do it? Take a risk when you’re on top.

The key to a Sigmoid leap is combining awareness of a changing landscape with the courage to take bold action. It’s when we’re on peak form that we need to look ahead, to voluntarily jump to the Learning stage. The longer you ride your luck, the harder the transition, and the more time it will take. Just look at the music industry – after decades of consecutive growth, leading to a high of $26,600,000,000 in 1999, the internet turned up to wreck the party, as technology so often does. What would the labels give now to go back and use their success to prepare for the next chapter, instead of scrambling like they are now?

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It Could Happen To You

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Whatever phase you’re in, it’s always good to have a frank assessment of your business – what you’re doing right, what you could be doing better, and where your industry is headed. When it comes to advertising and marketing, we’ve talked before about the diminishing returns of TV. Home recording, on-demand, alternative platforms – just like with music, no matter how long the boom, eventually technology comes in and disrupts established methodologies. People are tired of saturation, so you have to reach them in places they don’t already have their backs up, like a concert. Just like in the game Risk, trends like this are foreseeable if you pay attention to the big picture.

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The good news is that anyone can take a Sigmoid leap, not just the Apples and Googles of the world. Even heritage brands like Steinway know you can’t rest on your laurels. Data helps, but it can only tell you so much. There’s always the possibility of unexpected opportunities: if you haven’t seen them coming, maybe no one else has either. So instead of planning out your entire budget for the year, keep a chunk in your back pocket. I’m not asking you to blow it all, or rebuild your business from the ground up. I’m just asking you to be prepared. To try something new. To take a risk.