Accepting risk is a part of being an effective entrepreneur, and it is one that is hard to square with the idea that business success is all about making the right decisions. Let’s acknowledge here and now that even beginning to run your own business is an endeavour that is wrapped up with risk. You are putting money on the line with no guarantee of success - because that can’t be guaranteed - and hoping that you won’t be one of the 60% of businesses that fail in their first three years.
It’s tempting to think that you won’t be one of those businesses, because you won’t make the mistakes they did. When you face a problem, or a fork in the road, you will simply apply intelligence and make the right decision. This is a comforting thought, and intelligence is certainly a vital part of doing business the right way, but is it foolproof? Let’s look at some home truths about business that tell us what we need to know about how - and even whether - you can think your way to business success.
Intelligence isn’t just about what you know
If business success was simply a matter of knowing things, then - naming no names here - some of the richest people in the world would never have passed the first hurdle. An important part of achieving business success is not assuming that the world will behave in the way you expect it to. We’ve just spent more than a year in a pandemic having a crash course in the concept of “unforeseen circumstances”, but some people don’t yet realise that not only does the world not act according to rules, it also doesn’t always react in the way you would expect. What you know is less important than how quickly you adjust to new realities.
It’s not about what should work, it’s about what does work
To make the analogy of business as sport, we can all think of teams or professionals who play the game in a beautiful way. Exciting to watch, constantly innovating, and usually losing in the long run to teams and players who are less beguiling to watch but more efficient. If your goal is business success, you will need to be more like the latter. This means that evaluating your strategy isn’t about reading and digesting the works of Sun Tzu (or even Vince Lombardi); it’s about knowing how to set OKRs and achieve those targets. If you’re producing a healthy balance sheet, by all means you can quote all the great philosophers you want to - but don’t assume that the latter will necessarily beget the former.
You can never completely eliminate risk
Some people hold the impression that business is a series of binary decisions, and if you just pick the right choice at each interval, you’ll eliminate the threat of things going wrong. Unfortunately, you can’t avoid risk in business by leaning away from it. Nor can you face it head-on and make it submit - you simply need to accept that it is there and work on ways to minimise it; repeat the things that are working until they stop working, and avoid the things that never worked to begin with. Perhaps most importantly, you should be looking to get far enough ahead of the curve that you can afford a few mistakes - because mistakes will happen, no matter how much planning you do.
Success in business isn’t just about having the master strategy; a lot of it comes down to adaptability, humility and - in some cases - sheer good luck. It’s useful to know a lot, and to think a lot, but sometimes just recognising you can’t know everything is even more important.
Author - Chris
Author, Editor, Creator of this website.