How Taking (Calculated) Risks Builds Your Business Quicker
Growing a successful business and maintaining that hard-earned success relies on reaching new audiences and customers. Eminent business leaders make business decisions that attract attention and set their companies apart from the competition. They accomplish this by taking calculated risks. The companies over time that have been most iconic and enduring were those that took business risks that not only paid off but changed the world.
There is some chance in every business decision, but great leaders understand that playing it safe is not the way forward. Nike proved this in their “Believe in Something” campaign that featured Colin Kaepernick, a football player who inspired an extremely heated public debate over the difference between peaceful protest vs. patriotism. When Colin tweeted about the upcoming campaign, Nike saw a 31% spike and an all-time high stock price from the ads and garnered $43 million in sales due to free advertising from the tweet. It was a calculated risk involving savvy marketing experts that helped grow Nike’s business.
Why Risk-Taking Grows Business
From a business perspective, risk and return are closely intertwined concepts. Steering a company consistently requires managing unknowns to push the envelope and achieve success. Launching new products or services that require significant investments takes a leap of faith that the risk pays off in a healthy return and considerable achievement. Passing on opportunities because of doubt and fear of failure can be a self-fulfilling prophecy.
Richard Branson, innovator, activist, and founder of the phenomenally successful global brand Virgin reportedly said, “Doubt kills more dreams than failure ever will.” He has spoken often and honestly about how his many failures helped shape him, reiterating that missteps are inevitable along the path to innovation. Revolutionary leaders know that failure is a critical learning tool. Pitfalls happen on the road to success, but recognizing your limits and taking calculated risks help you grow sustainably.
How to Take Calculated Risks
Calculated risks use information and intuition to avoid making reckless decisions. A calculated risk is roughly equivalent to hedging your bets. It involves taking steps such as conducting market research or basing offerings on your in-depth customer knowledge. Leveraging that information is how you reach new audiences and emerge in new markets.
When you know you have something unique that will appeal to your target audience, you can go bold with your ads. Motel 6 has always known who its market was and appealed to budget travelers with its folksy approach that they will “keep the lights on” to welcome you. The companies’ leadership took a risk with a tongue-in-cheek rendition of spokesperson Tom Bodett saying that appealing to millennials was the hip thing to do while speaking in their vernacular, finishing with, “we’ll keep it lit for ya.” There is always a risk that investing in an ad that is off the mark will fail. However, the gamble that pays off and hits home helps further sales and bring in new customers.
Healthy Risks Create Long-Term Success
Existing in a niche is good but relying on that as a long-term strategy inhibits your growth options. Inevitably, your market will sooner or later reach its limit. When in an oversaturated market, your audience becomes bored and starts to look for newer, more exciting options. Oversaturation and boredom are harbingers of obsolescence.
While there is nothing wrong with staying in a market that has been successful over a long time, you need to give audiences a reason to look at you with fresh eyes and renewed interest, or you are in danger of becoming stale. Over time, audiences make assumptions about products or services, thinking they aren’t relevant to them unless they are of a certain age, financial status, or other limiting factors. A new strategy can help you pique the interest of different audiences that now see the relevance of an established product or service. Taking risks, such as investing in new product lines or trying to find different people who will be interested in what you offer, is how you reach new consumer groups and reenergize your existing customer base.
Be Bold: Grow Your Business Faster Through Calculated Risks
The world’s most successful business leaders know well the adage nothing ventured, nothing gained. Imagine how our world would be different if Steve Jobs had been too fearful of failure to start Apple. But brilliant ideas need expertise in numerous fields to bring them to fruition and get those revolutionary ideas in front of the right people. When you are ready to go bold, work with an experienced media partner to help you present your ideas to the world in a way that resonates.
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