THE BLOG
01/15/2014 11:01 am ET Updated Mar 17, 2014

The Merits of Risk-Taking in Business (and Life)

One person's big risk is another person's daily routine and some risks cause great fortune while others cause great failure. The problem with all of this is that people have been pre-programmed to believe certain things are risks and others are not (not to mention the standard definitions of success and failure). As with everything else in this world, context is critical to true understanding.

Business is fairly predictable. Of course new opportunities arise all of the time that cannot be planned for, partners go away, employees change jobs, and so on, but the general arc of a business is typically defined by a set of guidelines. Rarely are new industries built and innovation is typically not something entirely novel, but rather a function of small, noticeable improvements built on top of someone else's work. Taking risks changes everything.

Taking a risk in business is not unlike asking a stranger out on a date or getting on a different bus route to work. Many times, nothing changes, and the course of your life does not change. But sometimes, everything changes. Maybe you get married. Maybe you meet that investor who saves your company. The beauty of taking risks is the unforeseen consequences that come naturally afterwards. Sometimes consequences can be damaging. But typically nothing so damaging can happen that it will ruin your business. The only other outcomes then are neutral or positive. All else equal (which is a very important distinction), with each risk you take, there is a 66% chance that your business will either be the same as it was before, or better off in some measurable or immeasurable way.

Risks take your business off the standard line that define all of your competitors, and onto a new plane that could make you worse off or better off. But if you've done your homework, and assessed a given choice (aka calculated risk), taking a risk is the way to go. It allows you to get outside of your box and gives you the opportunity to be different. In an age in which information is readily accessible to everyone and there are thousands of companies in the exact same industry as you, taking a risk is one of the simpler ways to differentiate yourself. Taking risks challenges you to think differently and to solve new problems, which in turn affect every single decision you make for your business.

There are moments in time that can open you up to unforeseen opportunities. It's not always easy to recognize these moments and hindsight is always 20/20. But the idea of taking risks is one that should not be forgotten when running a business. You can do what everyone else is doing, and you might even be successful. But you can truly disrupt the trajectory of your business and life when you take risks that make sense (for whatever reasons they make sense to you). And even though conventional wisdom says otherwise, I believe most risks are not really risks at all. It's important to put things in perspective and to take a historical point of view. When you consider your business, your life, and the decision that you are trying to make in the context of all of the people that have put much more on the line than you, the decision becomes easy. Sometimes taking a risk is the only way to move forward and win.