Why Winners Take Risks

Decision Making Process, Risk Management

 

Recently, I had the opportunity to talk with Tom Panaggio, entrepreneur, strategic advisor, speaker and amateur race car driver about taking risks, winning, and using failure to propel success. Tom is the author of The Risk Advantage: Embracing the Entrepreneur’s Unexpected Edge.

 

The 2 Big Advantages of Risk

 

“A leader who accepts risk is setting the stage for long term success.” –Tom Panaggio

 

Why is risk an advantage?

 

There are two big advantages to risk.

First and foremost risk is directly connected to opportunity.  Every opportunity must have an element of risk or there will be no benefit.  Risk is the cost of opportunity.  All businesses and organizations must be in a constant state of forward progress because of competition and the ever-changing demands of customers.  Therefore, as an entrepreneur or business leader we must continuously seek out opportunities to meet these demands.  A leader who recognizes the vast importance of forward motion for their organization accepts risk as merely a cost of opportunity and then actively endorses this philosophy throughout his business in setting the stage for long term success.

Secondly because most people have a tendency to avoid or minimize risk, those who have the courage to embrace it already have a competitive advantage.  For example my company was a non-stop marketer.  We knew that our competition was not willing to risk the investment in marketing to the degree that we were.  So we took advantage of their unwillingness to risk the marketing dollars and dominated our market space by out-marketing them.  We put ourselves in a position to win by embracing the risk of marketing.

 


“The only way to achieve success is to have the courage to embrace risk every day.” –Tom Panaggio

 

How do you encourage the appropriate amount of risk?

It is important to understand that my position on embracing risk does not advocate blindly engaging in any and all opportunities regardless of the potential outcome.  But the only way to achieve long term success is to have the courage to embrace risk each and every day.  With that said, there is no standard to determine what level of risk is appropriate, and there is only a blanket rule of thumb that can be generally applied.  That’s the great challenge of being a business leader: recognizing worthy opportunities.  Any opportunity that is void of a sufficient benefit or is described as “no-risk” should be avoided.  Each situation that requires one to embrace risk must be evaluated on a unique basis.

If pressed for an answer, I would say that we always start with the end to determine if this is an opportunity worth pursuing.  What is the reward or benefit the company receives from committing to this opportunity?  If an opportunity provides little reward or doesn’t help with the company’s forward motion, then we limit the amount of risk.  If the opportunity can change the competitive landscape for the company or increases the value your product or service has for your customers, then the level of risk increases by the potential return.

Everyone wants a formula or template they can apply to all business situations.  That shifts the responsibility from the business leader to the formula.  But in the end, business leaders need to rely on their gut intuition and have the courage to step outside the comfort zone.

 

Adapting A Winner’s Mindset

 

How do you adapt a winner’s mindset?

This is really a difficult concept to grab hold of because human nature is pushing us to play not to lose rather than to go for the win.  A study was done and it found out that most people get twice as much joy from not losing as they do from winning.  Lose aversion creates risk aversion: “I don’t want to lose what I have.”

My father was a basketball coach so from a very early age the idea of winning was a way of life. I was conditioned to want to win and, therefore, not only to think like a winner, but more importantly ACT like a winner, which means having the internal drive that says, “I want to win” and then focusing on preparing for competition, execution and moving forward.

 

“If you do not have a winner’s mindset, odds are you will not succeed.” –Tom Panaggio

 

The truth is business does not support the theory of, “It’s not whether you win or lose, but how you play the game.”  In business you not only better play the game right, but you have to win, too. Competition in business has no level of compassion, you either want to win and then act like a winner or you get eliminated.  So if you do not possess a winner’s mindset when you launch a business, the odds are you will not succeed.

 

Using Failure to Succeed

7 Essential Life Lessons From 7 Ancient Leaders

Academy Of Athens, Greece
Thai Nguyen is passionate about sparking personal revolutions in the lives of everyone he meets. A Professional Re-inventer: Thai is a 5-Star Chef, International Kickboxer, Writer, Speaker, and NLP/EFT Life Coach. If you are ready to stop dreaming and start living your Utopian Life, get connected with Thai today at TheUtopianLife.com.

 

1.  Embrace Change.

 

“Nobody ever steps in the same river twice, for it is not the same river and they are not the same person.” ―Heraclitus (545 BC – 475 BC)

Change is a reality weaved into the human experience. If there’s one thing we can guarantee will never change—it’s change. To move and evolve with our changing environment is crucial: keeping up with technology, advancing in careers, and constantly learning.

That’s not to say change jobs or buy a new car every year; it’s not change for the sake of change, but being more in synch with the seasons of life. Recognize when one door closes and another one opens.

 

“Nobody ever steps in the same river twice, for it is not the same river and they are not the same person.” ―Heraclitus

 

2.  Take the first step.

 

“Well begun is half done.” –Aristotle (384 BC – 322 BC)

Procrastination is often defeated with a single strike. It’s the first domino that knocks down all the rest. And yes, it’s always the most difficult. But as Aristotle emphasises, the finish line becomes a sudden reality once you launch out of the starting blocks.

A popular mantra for the entrepreneur is to start before you’re ready—everything has a way of falling into place after that.

 

“Well begun is half done.” –Aristotle

 

3.  Iron sharpens iron.

 

I don’t need a friend who changes when I change and who nods when I nod; my shadow does that much better. –Plutarch (46AD – 120AD)

It isn’t easy to give and receive constructive criticism. It’s hard to even tell a friend they have spinach stuck in their teeth. But what’s unsaid can be more damaging than what is said. Particularly when our words can significantly impact our friends in a positive way.

Much better to tell our friends what they need to hear rather than simply what they want to hear.

 

I don’t need a friend who changes when I change and who nods when I nod; my shadow does that much better. –Plutarch

 

4.  Listen more, speak less.

The Action Habit: 7 Proven Ways to Move from Deciding to Doing

Frog On A Log
Chris Shilling is the founder of Serve and Lead and an author, speaker, consultant, and leadership coach. You can download the latest e-book in his Learn and Lead series here. You can also follow Chris and Serve and Lead on Twitter and Facebook.

 

I have a simple math question for you.

5 frogs are sitting on a log.

4 of the frogs decide to jump off. How many frogs are left?

Did you answer 1?

The correct answer is still 5.  This is because there is a difference between deciding and doing.

 

Have you experienced this in your own life? We tend to make a lot of decisions. We decide to eat healthier, get another degree, or start a new business. However, all of these decisions really mean nothing.

In order to make a decision mean anything, we need to take action. 

This concept is so simple, yet most people never move from deciding to doing. They do not get into the habit of taking action and do not accomplish all they could be accomplishing. By getting into the habit of putting ideas and decisions into action, we are in a better position to achieve the results we desire.

“Your beliefs become your thoughts; your thoughts become your words; your words become your actions; your actions become your habits; your habits become your values; your values become your destiny.” –Unknown

Here are 7 proven ways you can move from deciding to doing:

1. Stop waiting until conditions are perfect.

If you are waiting for everything to be perfect in order to get started you will be waiting forever. Things will never be perfect. There will always be something that is not right or could be better. There is no perfect time; there is only the present time. You must take action now and you can make adjustments as you move along. I know the perfect time to start was last year. The second best time is right now.

 

“The best time to plant a tree was 20 years ago. The second best time is now.” -Chinese Proverb

 

2. Stop, get up, and do it.

Turn yourself into a doer. A doer is someone who has an idea and moves forward with it immediately. Have you ever said to anyone, “It is a great day to go to the beach,” and then sat around and watched TV? Next time stop, get up, and go do it. Do you want to begin exercising or present a new idea at work? Do it today. When we pause and wait, we lose the will to move forward and allow doubt to creep into our minds.

 

“The most difficult thing is the decision to act, the rest is merely tenacity.” –Amelia Earhart

 

3. Stop over-thinking things

When we over-think things, we start to get paralysis of analysis. We start to analyze things to the point that we cannot move forward. We obsess over how conditions aren’t perfect, question the amount of time we have to commit, or come up with a whole host of reasons not to move forward.

 

4. Take continuous action.

Once you get started, continue to take continuous action. Make sure that you keep your momentum going by doing something productive related to your idea every day. This can be as easy as scheduling time to spend 15 minutes completing a small task daily. Those small tasks will add up quickly, and help you build confidence by seeing achievement.

Leading with No

man wearing a suit sitting in a table showing a signboard with t

 

Former British Prime Minister Tony Blair once said, “The art of leadership is saying no, not yes.  It is very easy to say yes.”

 

“The art of leadership is saying no, not yes. It is very easy to say yes.” -Tony Blair

 

It’s one of my favorite quotes.

So much of leadership literature is about what to do.  You can read about how to organize your company for success:  You determine a course of action, outline a strategy, and develop the plan.

It is more fun to say yes.  It’s easier.

I think every parent can relate.

“Can I have ice cream for dinner?”  Yes!

“May I stay up all night?” Sure!

I think every business leader can relate.

“We need to add six people to my department.”  No problem!

“I know it blows the budget, but can I still spend this money?”  Absolutely!

Saying no, setting limits, and knowing what you will not do is hard work.  But that’s leadership.

Renowned strategy expert Michael Porter said, “The essence of strategy is choosing what not to do.”

 

“The essence of strategy is choosing what not to do.” -Michael Porter

What’s Your Leadership Legacy?

Adult Hands Key To Child

 

Do you think about your leadership legacy?

What type of culture do you want to leave in your organization?

As a result of your leadership, what will remain long after you left?

 

Andrew Thorn is a business coach, consultant, and psychologist.  He has recently written Leading With Your Legacy In Mind.  I had the opportunity to ask him about his new book and leaving a leadership legacy.

 

The Importance of Legacy

Why did you decide to write about legacy?

My father passed away when he was 65 years old.  I was born when he was 30, so many of the important events of my life happened 30 years after they did for him.  When he died, I had an overwhelming sense that I was next in line.  This caused me to think about my legacy and the impact that I was making.  I asked myself if I was satisfied with my life, and the answer was no.  I began to make some changes and that included writing about the process of creating a legacy.

 

“Leadership is the act of making things better for others.” -Andrew Thorn

 

What is Leadership?

What’s your definition of leadership?

Leadership is the act of making things better for others.  When we live by this definition, all of us, regardless of our formal title or lack thereof, can engage in leading with our legacy in mind.

 

“Discussion is impossible with someone who claims not to seek the truth, but already to possess it.” -Romain Rolland

 

What is the “arc of leadership”?

The “arc of leadership” represents our own maturation as a leader.  It helps us remember that life is a circular experience and that it is difficult for us to see it as a whole.  When we pull out an arc, or a part of that circle, we can study it and understand it more effectively.  Each arc calls us into movement and improvement.

 

“The measure of a society is not only what it does but the quality of its aspirations.” -Wade Davis

 

Where To Spend Your Time

I’m interested in your view of balance.  Your chapter on this subject is called “From Balance to Focus”.  What does this mean?

A very lucky person, over the course of a 45 year career, will spend about 117,000 hours at work (average of 50 hours a week working), 131,000 hours sleeping (average of 8 hours a day sleeping), and 65,000 hours (average of 4 hours a day) taking care of personal responsibilities.  This scenario would leave the lucky person with a little more than 50,000 hours to use however he or she wants.

Unfortunately, most of us work longer, sleep less, encumber life with unnecessary personal responsibilities and then find ourselves too tired to make our free time matter.  Just by looking at the hours, we can see that there is no way to balance the number of hours between work and life.  We need to work to provide for our needs.  Instead of trying to balance the time, we must spend time focusing our efforts into meaningful work.Andrew Thorn

The time we spend at work is the time when we are most awake, most alert, most focused on what we want, most productive and most engaged.  Once we focus on where we want to work and how we will contribute what we know we must contribute, we find ourselves full of energy at the end of the work day, which in turn means that I can use my 50,000 hours more effectively, too.

 

How do you coach clients to understand ‘purpose’?

I think it is important that we understand that purpose is a moving target.  In other words, purpose is different during the different seasons of life.  Sometimes we hang on to a purpose for too long or we let it go too soon.  This is why we must be constantly evaluating what we find to be meaningful.  When we connect to meaning, our purposes come into focus, too.  When we can see purpose for what it is – the guiding force of why we do what we do, then we can begin to also know what to do.  I use one or two questions to connect my clients to purpose: (1) Why do I want to do this? & (2) If this were my last day, would I still be willing to do what I am about to do? Once these questions are answered, there are very few doubts about purpose.  I don’t want to make it any more complicated than this.

 

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” -John Quincy Adams

 

From Success to Significance

 

Let’s talk about one of the leadership arcs: moving from success to significance. How do you help coach someone in this area?