3 February 2021

Take risks and maybe fail, or avoid risks and definietly fail

Over the years we have seen the industry swing from big ambitions destined to fail, to a series of incremental improvements so trivial they accelerate a companies journey to commoditisation and eventual death.

Patrick Steyaert introduced me to the phrase barbell flow and it's great. It describes the results of a flow that focus overly on small bets and safe investment candidates.  All the easy and obvious stuff moves to thre right of the workflow, but the big ambitious and risky stuff gets help up on the left being analysed and not making real progress.

The result of this decicion making is that you increment your business forward. Meanwhile more ambitious people come along and venture more ambitious change.  Sometimes it fails, but often enough it works so that your business starts hurting as it loses market share to the new challengers.

In the presentation Patrick made above he offers a solution; introduce a different multi-step evaluation process to help move things forward just enough to make them viable.

I'd like to offer an alternative path.

Recognise that risk is a part of what makes ventures valuable in the first place and start balancing your bets. Small, obvous and incremental things matter, but that's not enough. Realize you must also reserve capacity to bet on product and service innovations that are inherently risky and are even likely to fail.

Don't be blind to the risks, but accept they are neccessary and account for the uncertainty in your plans. Over time you will establish patterns and get a more fine grained view on the risk profiles of different decicions.

You can also start something knowing it's risky and then take actions to de-risk it as much as possible. Lean canvas, co-creation, design sprints and all the rest of the useful tools and techniques we have to minimise risk in new ventures should still be deployed, but at the end of the day accept that some things fail.

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