Risk and reward
October 28th 2010 10:44
Dr Greg Chapman, director of Empower Business Solutions and writer of The Australian Small Business Blog, makes a telling business point with an anecdote about his university years.
The story concerns his three lecturers during one year of his MBA course. Two of the lecturers worked full-time for the university while one lectured part-time and ran a property development business as well.
Each year the MBA course participants took part in a business game where they were placed in teams and acted as company directors, competing with the other teams.
Each year the three lecturers would have a dry run of the game beforehand, competing against each other. And every year the part-time lecturer won.
So one year the two full-timers decided to conspire, connive and collude to break the humiliating dominance of their colleague. They lost anyway.
The difference in their strategies, and the lesson of the story, is that the part-time lecturer was prepared to take risks, backing his knowledge, instinct and confidence.
The same knowledge and instinct was used to cut losses and exit quickly when a venture or strategy did not work as planned, as will inevitably happen.
But when it does work, says Dr Chapman in his business blog, the rewards can be considerable, and will always beat a conservative, no-risk approach.
Greg Chapman's small business blog can be found here.
The story concerns his three lecturers during one year of his MBA course. Two of the lecturers worked full-time for the university while one lectured part-time and ran a property development business as well.
Each year the MBA course participants took part in a business game where they were placed in teams and acted as company directors, competing with the other teams.
Each year the three lecturers would have a dry run of the game beforehand, competing against each other. And every year the part-time lecturer won.
So one year the two full-timers decided to conspire, connive and collude to break the humiliating dominance of their colleague. They lost anyway.
The difference in their strategies, and the lesson of the story, is that the part-time lecturer was prepared to take risks, backing his knowledge, instinct and confidence.
The same knowledge and instinct was used to cut losses and exit quickly when a venture or strategy did not work as planned, as will inevitably happen.
But when it does work, says Dr Chapman in his business blog, the rewards can be considerable, and will always beat a conservative, no-risk approach.
Greg Chapman's small business blog can be found here.
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