RISK RULES!

About a week ago, our oldest son fractured his leg for the second time this year. The doctor explained she wasn't 100% sure it was fractured this time, but she put him in a cast anyway, rather than risk him doing more permanent damage to the leg.

He's understandably disappointed. He'll miss the Spring football season and much of the Summer practice session, where the boys compete for a limited number of varsity positions.

Also understandably, he's decided to focus on the “might not be broken” part of the doctor's diagnosis rather than the “risk of permanent damage” part. And he's started his own (premature, if it's broken) physical therapy sessions with the leg. My wife and I are pushing for caution and patience – something that's difficult when you're 17.

This whole thing got me thinking about how different people approach risk differently. Age, experience, and personal outlook and priorities all come into play when deciding on how to approach each risk (and problem) we encounter in our life.

Companies are no different. They often face similar choices: "do we take action that could have catastrophic results or do we wait and possibly miss out on the chance of a lifetime?"

Depending on the people involved in the decision, the organizations affected, and the personal ambitions of those making the decisions, it is amazing how diverse the range of possible courses of action can be. One group might decide to go “pedal to the medal” into the fray, consequences be damned, while another group will hesitate and equivocate until the universe makes the decision for them.

The company's competitive circumstances, the environment, or the company's economic health at that particular moment could make either decision the right one or the wrong one. The problem is figuring out which is right for your particular company at this particular time.

The best way to do this is to have help that's knowledgeable, dispassionate and interested in your long-term health. And who cares more about your long-term health than you?

That's why I recommend you take the time to develop a set of decision guidelines and risk management / problem resolution processes before you're actually facing a hard choice.

If you decide, rank and write down your priorities beforehand (People over money? Power over prestige? Making the team this season over walking for the rest of your life?), you're less likely to let the emotion of the moment make critical decisions for you. You're better able to establish calm, thoughtful ways of working, sensibly decide your risk tolerance, and establish workable decision parameters if you're doing it when things are calm and you've got time to think.

As parents, my wife and I have established guidelines (some formal, most informal) for making emotionally charged decisions like this. I think it's safe to say, most parents have.

If your company hasn't, I urge you to take some time over the next month or two to figure out what the “right” decision will look like for your organization's next crisis.


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If you need help getting your decision processes started, post your questions here, or send them to my e-mail: tomfawls@CouncilforSmallBusiness.com.