Risk Prudence

Day 130 Week 19 Q2 Thursday, May 11, 2023

Creative people do take chances. Innovation does involve risk. Decision-makers are not too crazy about change.  But there is a way to address this, and it is called risk prudence. In order to better understand risk prudence, look at the average start-up entrepreneur. They do not have many resources when they begin. Therefore it is difficult to take chances other than with their own professional advancement, for they may be in part upon a path that is not guaranteed to yield a stable result, such as pursuing a traditional professional requiring licensing.

There are many kinds of entrepreneurs and also Intrapreneurs.  The group I am most familiar with, for the most part, began as engineers. Engineers are problem solvers first, and if to solve a problem, they need to start a company, new division, or new department, or attempt to address a new market, we are willing to do so.  Of course, this is not true of all engineers, but when I moved to Silicon Valley, it certainly seemed that way.  Startups that come from business people instead of technical people tend to be better at finding customers. Startups that come from technical people tend to be better at making products that work. This is why it’s a good idea to have both a technical person and a business person.

The combination congealed a situation where people are prudent instead of ignorant about risk. If you have both a product and a customer, you just o]might have a business.  I can say that problem solvers are generally less interested in taking chances than solving problems. Since they have the desire to make things work with the products or companies, they too are more risk averse than their reputation might suggest. Coming from a position of very limited resources, start-up engineers tend to be risk prudent.

This is the only path that solves the different priorities of decision-makers, innovators, and creative outliers. None of these groups want to fail, and they would like to solve the problem, even if it is not the same. They all know that avoiding risk also avoids growth and, therefore, sustainability. Businesses actually have to usually innovate or die, which is why Innovation is a high priority. 

You may not be able to completely avoid risk when you are attempting to bring forth change, but you certainly can temper this risk and be very prudent about the risks you take. This is why you make demonstrations and pilot runs and test markets and interview potential customers. None of these generally take the spotlight because they’re not as glamorous as taking the world by storm with a breakthrough, but they are on the critical path to being risk prudent.

Being prudent is critical to Innovation because Innovation requires adoption, not just creative expression.  Creative expression may help a creative outlier feel good about what they’re doing, but it will not pay the bills unless somebody wants to pay for it, which is a form of adoption. If you want your insights to get Tracktion and be adopted, you have to be risk prudent.