The Art of Taking Risks

  |  September 4, 2008   |  Comments

Four tips for evaluating whether a risk is healthy or just plain stupid

Some friends recently invited me out to their house on Lake Chelan in eastern Washington. They'd mounted a 30-foot ski lift onto their dock and installed a high-dive platform to the top of it. No joke.

Needless to say, we all felt the need to climb this thing and jump off it. I thought I knew the right strategy. Don't look down. Just climb up and immediately jump. No waiting, no deliberation. Just do it.

Problem was, I couldn't. As soon as I got to the top, I froze. It took me 10 minutes to work up the nerve. Plus, my friends had their cameras angled to capture the exact moment I launched myself, which didn't help matters. And once I took the plunge, I was in the air a lot longer than I planned. It was exhilarating, but I'd be lying if I said I wasn't a little scared. (And to all of you who think a 30-foot platform isn't that high, you're sorely mistaken.)

Clearly, I survived. I ended up jumping off a few more times just to prove I wasn't a total chicken, But it really got me thinking about taking risks. When is it a good idea? And when should we play it safe and watch from the ground?

You can probably recall those times when you've taken a risk or two. Maybe it was an honest conversation with a client or colleague. Maybe it was a new idea that was so completely out of left field that you thought everyone would figure you were crazy. Whatever the case may be, there are a few guidelines for evaluating whether a risk is healthy, or just plain stupid.

I did a little research on the subject of risks and came up with some interesting bits of info. Along with the bonus of discovering new ideas, risk apparently makes us happier.

Granted, we're in the business of performance marketing. We avoid going off gut feelings, and focus more on analytics, research, and things we measure and evaluate to make decisions. But that doesn't mean we don't use risk like a good seasoning. Small doses is the key.

Part of what defines a risk is that it's risky. You haven't evaluated all the ins and outs, the fear factor is there for what could potentially happen, However, I offer these tips for going halfway with a potentially risky business decision.

  • Why are you taking this risk? If we're talking about something new and unknown, define your reasons. Are you trying to get a reaction, or will this risk have genuine benefits? Audiences have become somewhat desensitized to the typical efforts, so there's a tendency for increasingly wilder extreme efforts of marketing. But at what point does your message become noise?

  • How will you measure it? If you're doing something new, how are you prepared to measure the ROI (define)? Without that in place, it's just a risk, nothing more. With the data and analytics to back it up, all of a sudden that risk becomes an innovative business decision. (Or a lesson learned.) Assign a monetized value to your risk. You can pick a value that turns out to be incorrect, as long as you pick something. Analyze what was accomplished and what you learned. It doesn't have to be perfect. But the next time you get another wild idea, you'll have some documented reference points.

  • How will it affect your business short-term and long-term? Risks in small doses give your brand zest. But your business plan should consist of more than a series of random risky endeavors. What kind of long-term planning and strategy do you have in place to counter the risks you decide to take? Connect these efforts together.

  • What's the worst thing that could happen? You have to be willing to ask yourself this question. Be honest. If you can't live with the possible outcomes, perhaps you should re-think what you're doing. I've had risks that paid off, and those that manifested a real cost to doing business. For example, in a recent new business pitch, a potential client specifically asked that we keep things within a certain format. We chose to take the risk of delivering a presentation that answered their needs and wasn't within those guidelines. They loved it. We would not have won that pitch without taking that risk. But we could have just as easily lost it for going against their request. And we knew that. We chose to accept that possibility because the outcome of success was worth the risk.

As you've probably guessed, I like a good risk. Whatever business risk you're weighing, it's probably more likely you'll regret not going for it. Keep me posted. What can I say? I get a thrill out of listening to other people's endeavors.

Shane is off this week. Today's column appeared earlier on ClickZ.

ClickZ Live Toronto Twitter Canada MD Kirstine Stewart to Keynote Toronto
ClickZ Live Toronto (May 14-16) is a new event addressing the rapidly changing landscape that digital marketers face. The agenda focuses on customer engagement and attaining maximum ROI through online marketing efforts across paid, owned & earned media. Register now and save!

ABOUT THE AUTHOR

Shane Atchison

In 1998, Shane co-founded ZAAZ to advocate a different approach to Web services — one that respects and delivers on the power of the individual and the promise of Web technologies. As CEO, Shane leads the company's long-term strategic vision of working with leading financial service organizations, consumer brands, startups, non-profits, and community-based organizations, helping each realize the potential of the Internet and its meaningful impact on their business.

COMMENTSCommenting policy

comments powered by Disqus

Get the ClickZ Analytics newsletter delivered to you. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

ion Interactive Marketing Apps for Landing Pages White Paper

Marketing Apps for Landing Pages White Paper
Marketing apps can elevate a formulaic landing page into a highly interactive user experience. Learn how to turn your static content into exciting marketing apps.

eMarketer: Redefining Mobile-Only Users: Millions Selectively Avoid the Desktop

Redefining 'Mobile-Only' Users: Millions Selectively Avoid the Desktop
A new breed of selective mobile-only consumers has emerged. What are the demos of these users and how and where can marketers reach them?

Jobs

    • Contact Center Professional
      Contact Center Professional (TCC: The Contact Center) - Hunt ValleyLooking to join a workforce that prides themselves on being routine and keeping...
    • Recruitment and Team Building Ambassador
      Recruitment and Team Building Ambassador (Agora Inc.) - BaltimoreAgora, www.agora-inc.com, continues to expand! In order to meet the needs of our...
    • Design and Publishing Specialist
      Design and Publishing Specialist (Bonner and Partners) - BaltimoreIf you’re a hungry self-starter, creative, organized and have an extreme...