CEO Shoptalk — All Risk Is Not Created Equal

If you are an entrepreneur, founder, CEO, you swim in a sea of risk, alternating amongst the butterfly, the backstroke, the breaststroke, and the crawl. You must do it all.

In the early days, you are a minnow (or a little mullet if you are feeling salty) and the dangerous waters of startup land are populated by voracious, big-toothed sharks, vicious sharks, all of whom want to devour you.

In these early, formative days every risk can eat you (kill you, destroy your company). [Worse, you don’t yet know the nature of risk. You are in that classic posture of not knowing what you don’t know.]

As you exit the size 2 Pampers, the list of things that can kill you begins to thin, but you add to it — you begin to take risk.

You visit risk upon yourself as you sharp elbow your way upward in the food chain. [Soon, you may become a shark.]

The big question is this — Do you understand the nature of the risks you are taking?

The nature of risk

Take a deep breath, let it out, count to ten. Do you understand the nature of the risks facing your company?

Let’s look at that in an orderly manner:

 1. Do you understand the nature of the risks facing your company? Do you stop to think about them?

On a nice sunny day wherein the sky is bright, the breeze comforting, ask yourself — What can kill my company? Just start there.

I call this the List of Horribles.

 2. How many of those risks are “company killers?” How many, if you fail, take the company with you? How many are just bee stings? How many are experiments?

Undercapitalization is like arsenic, deadly.

Shipping a bit of software with a couple of flaws, is not going to kill you though when the customers begin to scream at you, you may wish it were so.

 3. How many of these risks are environmental — meaning imposed by external forces beyond your control?

Uhh, pandemic? Who ever saw that coming?

 4. Which of these risks are self-imposed? Which ones that are self-imposed, can you mitigate in some fashion?

The list can go on, but what I hope you realize is that on an intellectual level, you have to consider risk and its characteristics. I do not care how you do it; I just want you to do it.

Sir Charlie Chaplin, a man who managed risk

Charlie Chaplin — Google him already, you have no idea who he is — used to do his own stunts. He, famously, used to rehearse these stunts many times using different escalating levels of risk — in one of his many movies, a brick wall was to fall on him in a cloud of dust, but he would be saved by a large door opening from which he would emerge unscathed.

The young Mr. Chaplin before burdened by fame and knighthood. Picture by Strauss-Peyton Studio, bromide print, circa 1920.

CC would rehearse with a wall made of paper, advance to one made of cardboard, advance to one made of wood, and only then would he do the actual, dangerous stunt.

He “de-risked” the situation, but most importantly, he thought his way through the risk before he took it.

Sir Charlie Chaplin in his famous role as The Tramp.

Bottom line it, Big Red Car — I’m really busy

OK, sorry, dear reader.

Here’s the punchline. If you are running a company, take a second to make the list, identify the sharks with whom you are swimming, and prioritize their inherent danger.

Maybe you crawl, walk, run your way into some of these risks. Maybe you pass on some of them. Maybe you focus all of your impressive might on others.

You plan to meet and de-risk the risks.

That’s all you need to do. Can and will you do this?

Recently, I went through this exercise with a client and we arrived at the conclusion that his company did not really have any more risk than just the external business environment.

This was dramatically different than the view two years ago. He had dodged some risks, brilliantly refused to take some, and was exquisitely positioned when the pandemic arrived.

He ran the company on a WFH (work from home) basis and one would have to say he not only weathered the storm, he prospered therein.

“Beware the storm,” the threatening skies warned.

“I am the storm,” the entrepreneur replied. Haha, love that idea. Be the storm.

All risks are not created equal; and, entrepreneurs, founders, CEOs are not equal in their ability to identify, plan for, and to overcome risk.

Ahh, but you can become quite the risk wizard if you will just do the work.

Have a damn good week.

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car, y’all. God bless you.