No Risk, No Reward: The Art of Managing Risk

A blind man had been waiting a while at a busy road for someone to offer to guide him across, when he felt a tap on his shoulder.

“Excuse me,” said the tapper, “I’m blind – would you mind guiding me across the road?”

The first blind man took the arm of the second blind man, and they both crossed the road.

The first blind man was the jazz pianist George Shearing. He is quoted (in Bartlett’s Anecdotes) as saying after the event, “What could I do? I took him across and it was the biggest thrill of my life.”

George Shearing’s story is probably one of the most intriguing stories used to illustrate the benefits of taking risks, particularly in business.

Sir George Shearing, was a British jazz pianist who for many years led a popular jazz group that recorded for Discovery Records, MGM Records and Capitol Records. The composer of over 300 titles, including the jazz standard “Lullaby of Birdland”, had multiple albums on the Billboard charts during the 1950s, 1960s, 1980s and 1990s. 

Now, imagine you’re asked to speak at an event, but you hate being in front of crowds. Do you make up an excuse and politely decline, or recognize there’s a reason behind the invitation, rise to the occasion, and start thinking about how you’ll prepare? How you respond says a lot about your overall success in business and life.

There are times when we think we cannot do something and so do not stretch or take a risk. Being forced to stretch and take a risk can often help us to reduce our dependencies (on others, or our own personal safety mechanisms), and to discover new excitement and capabilities. — Unknown 

Every entrepreneur faces the challenge of running a business in a difficult environment like Nigeria. There are political, social and economic factors that bring about uncertainty and instability for business owners, which threaten the profitability and sustainability of a business venture.

Dilapidated roads and the high level of crime mean that businesses that depend on road transportation to move their goads across the country face increased threats from accidents and insecurity.

Recent terrorist activities such as bombings and kidnappings in the northern part of the country have increase the danger of running a business in these locations. These activities disrupt business operations and threaten the lives and properties of entrepreneurs and their staff.

A solid understanding of risk and risk management provides the entrepreneur with a means to successfully navigate the business environment.

As a business grows, so does the number of risks it faces. The company will have to make an increasing number of business decisions such as creating new products, hiring more staff and expanding operations to other locations. It’s exposure with external environment may also increase. All these decisions come with an increasing number of risks that need to be dealt with.

How then, can the company ensure that it maintains its capacity to continually manage risk effectively?

Read The “Art of Managing Risk” by LEAP Africa.This edition of the LEAP mini-series provides business owners with practical steps to improve the sustainability of their companies by methodologically identifying risks. These practical steps include tips, strategies and tools that can be applied to effectively manage risks in business.

You might also find the following thoughts on risk taking by “Motivation for Dreamers” insightful. 

Risk Taking – the falseness of security

The need for security is one of the things that keeps us from taking risks. We have a need, as human beings, to want to stick to the familiar and predictable. We like things we can control and know well. But, as Hellen Keller said: “Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure or nothing.” This need for “job-security” and such is exactly what keeps most people from living a truly satisfying and successful life. The illusion of safety blinds them to the fact that, ultimately, life is passing them by whilst they are hiding in the bushes. The real living is out in the open.

Fear and doubt also keep us from taking risks. These two are a dreamer’s worst enemy. Take the advice of Gareth O’Callaghan and “Do not fear risk. All exploration, all growth is calculated. Without challenge people cannot reach their higher selves. Only if we are willing to walk over the edge can we become winners.”

Risk Taking – good risk taking

What you should do is be willing to make mistakes, hold unconventional or unpopular positions, never be afraid to take on a challenge, always keep focused on your dreams and do whatever it takes to achieve them. By taking such risks your personal growth, integrity and accomplishments are enhanced. You need to do something that forces you to stretch from your present state to a state of greater personal growth. This applies both in business as well as in our personal lives. Quantum leaps in learning, solving problems, inventing new products, and discovering new phenomena require risk taking.

Anything you will ever do in life is risky. Risk is, by definition, the possibility of incurring loss or misfortune. So “to be alive at all involves some risk.” The risk is of being alive is dying. When you go to school you risk failing your exams. When you marry you risk divorcing. When you drive you risk being involved in an accident. The very nature of life requires risk taking. A small child would never learn to walk, talk, or socially interact without taking risks, experiencing successes and failures, and then monitoring and adjusting accordingly.

Risk Taking – mistakes are part of life

John W. Holt would add that “If you’re not making mistakes, you’re not taking risks, and that means you’re not going anywhere.” Making mistakes is part of taking risks and it is part of growing. The key is to learn from your mistakes and keep moving ahead. However, the question that still remains is how can you take intelligent or calculated risks?

Calculated or intelligent risks are those where the potential downside is limited, but the potential upside is virtually unlimited. The potential benefits of the risk should outweigh the potential losses if you are to take it. Otherwise it is not a good risk. Before you jump into anything always understand what you stand to lose and ensure that it is outweighed by what you stand to gain.

Risk Taking – lessen the risk

A second aspect of intelligent risk-taking is to imagine all the things that could possibly go wrong when making a decision on whether or not to take a risk. The trick is then to put all the measures in place that you can to prevent those things from happening. But be careful not to want to be perfectionist in this area. You cannot possibly prepare for every outcome. You need to have some faith in yourself and the fact that you will be able to handle whatever comes your way.

Learn to take action. The longer you procrastinate, the higher the likelihood that you won’t do something. Action is important for self-confidence to develop. With every small success you will be learning to take bigger and better risks. “Often the difference between a successful person and a failure is not that one has better abilities or ideas, but the courage that one has to bet on one’s ideas, to take a calculated risk – and to act” (Andre Malraux).

Remember the words of Leo F. Buscaglia: “The person who risks nothing, does nothing, has nothing, is nothing, and becomes nothing. He may avoid suffering and sorrow, but he simply cannot learn and feel and change and grow and love and live.”

Get the book today at the following bookshops listed below or send an email to info@leapafirca.org for more information.

  • Debonair Bookstore 294, Herbert Macaulay Street,Sabo Yaba.
  • B & B Bookshop, 110B Obafemi Awolowo way, Entrance by Oluwole Phillips Avenue, Ikeja, Lagos
  • Laterna Ventures 13, Oke-Awo Street,Victoria Island,Lagos.
  • CIBN Bookshops Plc, 19, Adeola Hopewell,Lagos.
  • NIIA Bookshops 13/15, Kofo Abayomi Street,Victoria Island,Lagos.
  • Terra Kulture Plot 1376, Savage, Off Ahmadu Bello Way,Victoria Island,Lagos.
  • CSS Bookshop, Bookshop House,50/52,Broad Street,Lagos Island.
  • Florence & Lambard Bookshop202/204,Ikorodu Road,Palmgroove,Lagos.
  • Veritas Books 16, Oluwole Fadojutimi Street,Apples Estate,Amuwo Odofin,Lagos.
  • Options Book House 142, Oyo Road, Ojo, Ibadan North, Oyo State

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