Kathy posts ‘Death by risk aversion’

You ever been on a team where something starts out as a fantastic idea but then gets worse and worse over time?

I’ve seen this happen and talked with Kathy Sierra about it last week at Search Champs (she used to work at Sun Microsystems and saw the same thing happen).

Out popped this fantastic post: Death by risk aversion.

I present to a lot of corporations. Everywhere I go I smell the fear. People are scared to do something different.

In big companies taking risks really isn’t appreciated. Oh, yes, I know I’ll get 50,000 examples emailed to me in an hour, but come on.

Here’s an example that someone I know (who doesn’t work at Microsoft) told me. He was looking at changing groups at his company. But doing so would need building up a reputation with a new group of people, would mean working harder, taking on new responsibilities, for no increase in salary (and a very real chance that he’d fail in his new job since it was something he hadn’t tried yet).

But, if he left his company to try something new, he’d have the same risks, albeit with a higher salary and with more upside if the company succeeded.

Three years ago I took risk after risk after risk and it paid off. I now have a great job that I love, a book that looks like it’ll be successful, and lots of great friends who are interesting (and lots of great readers who tell me off when I write something stupid, which is often).

But, am I taking enough risks? Well, I’m gonna speak in front of an audience I never thought I would be speaking in front of, and then I’m gonna go skiing in the Swiss Alps this weekend. That’s enough risk for this week.

Are you taking enough risks?

50 thoughts on “Kathy posts ‘Death by risk aversion’

  1. inaccurate assumptions and assertions

    Have it your way, but Cynthia Shapiro is the rare HR-type that actually tells it like it is, imho. Accurate as all out to me.

  2. inaccurate assumptions and assertions

    Have it your way, but Cynthia Shapiro is the rare HR-type that actually tells it like it is, imho. Accurate as all out to me.

  3. @17 – thanks for the readng assignment, but I think I’ve read enough inaccurate assumptions and assertions in your comment to know what to expect in the book. Thanks anyway!

  4. @17 – thanks for the readng assignment, but I think I’ve read enough inaccurate assumptions and assertions in your comment to know what to expect in the book. Thanks anyway!

  5. Brian, you need to read ‘Corporate Confidential’, esp the part about cutting out your gatekeeper locks you out. And you really didn’t have to volunteer, you were already on the layoff list, slicing out your boss does that. Also read the part about ‘layoffs aren’t what we’ve been told’.

    http://corporateconfidential.org/index.php4

  6. Brian, you need to read ‘Corporate Confidential’, esp the part about cutting out your gatekeeper locks you out. And you really didn’t have to volunteer, you were already on the layoff list, slicing out your boss does that. Also read the part about ‘layoffs aren’t what we’ve been told’.

    http://corporateconfidential.org/index.php4

  7. Risk adverse? Not always, companies NEED to appear stable and not willy-nilly wasteful to shareholders, but appearances can be deceptive, as someone said skunk-work projects or third-party funded innovations or internal R&D can pay off, but you really don’t want to project “risk-taking” as image of not knowing what you are doing, that’s the bad perception. So some of the safest-looking companies, are in fact taking many risks. The fact that you don’t see it, is exactly the image to project. You want to cast yourself as strong and sturdy, established in 1780, and here for all eternity.

    Hearkening back to Microsoft example, they take tons of risks, are public and quite boastful about such, saying all long-term strategy, but yet they have never made anything stick proftwise outside of the normal cash-cows. And investors see them as stumbling in the night, never getting it right (and even if they do wait til ver 3 before mass adoption), and the share price reflects that mood. Reorg after reorg and it never works, it never takes, hence a breakup is more of the order, imho. And when they do take big risks, that cut into bone, Vista and such, they usually have to retreat on the major planks.

    You can be safe and successful, you can be risky and successful. You can be both and be successful. Successful is successful unto its own right, always transitions, but rather than this hyped-up “disruption”, things usually progress more smoothly, if you don’t suck the fumes from the cash-out VC fueled hype.

    Boom to Bust, Consolidation to Commodity, anyone reading the tea-leaves finds this chorus all throughout recorded history. Amazes me then, when the “disruptive” types go bubble-boy, and think each new new thing is somehow revolutionary earth-changing, like they haven’t learnt a darned thing from the greatest loss of human wealth is all of recorded history. Now the rare kingpin short-sell cashoutter, selling the fools gold to big pocket dupes (Cuban and Jason) doesn’t mean you can replicate that model, it fact that’s the drug you use to rope in dupes. Every Amway motivational leader owns a big mansion and a fleet of exotic cars too, and has the top models and actresses crawling all over him (or at least says so).

    There are inventions that make it, and there are those that don’t. Simple as that.

  8. Risk adverse? Not always, companies NEED to appear stable and not willy-nilly wasteful to shareholders, but appearances can be deceptive, as someone said skunk-work projects or third-party funded innovations or internal R&D can pay off, but you really don’t want to project “risk-taking” as image of not knowing what you are doing, that’s the bad perception. So some of the safest-looking companies, are in fact taking many risks. The fact that you don’t see it, is exactly the image to project. You want to cast yourself as strong and sturdy, established in 1780, and here for all eternity.

    Hearkening back to Microsoft example, they take tons of risks, are public and quite boastful about such, saying all long-term strategy, but yet they have never made anything stick proftwise outside of the normal cash-cows. And investors see them as stumbling in the night, never getting it right (and even if they do wait til ver 3 before mass adoption), and the share price reflects that mood. Reorg after reorg and it never works, it never takes, hence a breakup is more of the order, imho. And when they do take big risks, that cut into bone, Vista and such, they usually have to retreat on the major planks.

    You can be safe and successful, you can be risky and successful. You can be both and be successful. Successful is successful unto its own right, always transitions, but rather than this hyped-up “disruption”, things usually progress more smoothly, if you don’t suck the fumes from the cash-out VC fueled hype.

    Boom to Bust, Consolidation to Commodity, anyone reading the tea-leaves finds this chorus all throughout recorded history. Amazes me then, when the “disruptive” types go bubble-boy, and think each new new thing is somehow revolutionary earth-changing, like they haven’t learnt a darned thing from the greatest loss of human wealth is all of recorded history. Now the rare kingpin short-sell cashoutter, selling the fools gold to big pocket dupes (Cuban and Jason) doesn’t mean you can replicate that model, it fact that’s the drug you use to rope in dupes. Every Amway motivational leader owns a big mansion and a fleet of exotic cars too, and has the top models and actresses crawling all over him (or at least says so).

    There are inventions that make it, and there are those that don’t. Simple as that.

  9. I’m taking lots of risks these days. I’ve been having trouble at work, basically disagreeing with a boss that does not accept disagreement. I took a risk and expressed some of my arguments and complaints over his head, to his bosses. They agreed with most of my points and were concerned, but are not going to risk disrupting my boss or our group, which produces adequate results in specified time frames. So now I’m taking another risk – they’re asking for volunteers for upcoming layoffs,, and I’m volunteering. Nothing lined up yet, but I’m hopeful. Into the void! Wish me luck! (And BTW, my resume is at http://www.brianbenz.com ….)

  10. I’m taking lots of risks these days. I’ve been having trouble at work, basically disagreeing with a boss that does not accept disagreement. I took a risk and expressed some of my arguments and complaints over his head, to his bosses. They agreed with most of my points and were concerned, but are not going to risk disrupting my boss or our group, which produces adequate results in specified time frames. So now I’m taking another risk – they’re asking for volunteers for upcoming layoffs,, and I’m volunteering. Nothing lined up yet, but I’m hopeful. Into the void! Wish me luck! (And BTW, my resume is at http://www.brianbenz.com ….)

  11. I would say that ‘Death by risk aversion’ is very common…and it’s less visible to us when it happens to individuals, instead of companies.
    If some company stops innovation, and his products/services just follow the ‘risk-free’ mentality, they will not have much space to grow and that will be noticeable.
    The problem is with personal risk aversion, when you commit yourself to an environment or situation because of the so called ‘safety’.
    But that is also true that you hear a lot about successful risk-takers. And if you look close, you will see, even in then, a lot of failures before having it right.
    Now, when these risky ideas approaches a business environment most of the management teams fears to fail with that. Mainly because they are a ‘management’ team and not R&D or an innovation team. And what happens is that sometimes, the fear felt by many when confronted with the new idea is the misunderstanding of their personal unconscious agreement with that idea.
    Recently I’ve read Blink by Malcolm Gladwell that brings some insights about our unconscious answers on different scenarios and that can be applied to ideas and risk-analysis situations.

  12. I would say that ‘Death by risk aversion’ is very common…and it’s less visible to us when it happens to individuals, instead of companies.
    If some company stops innovation, and his products/services just follow the ‘risk-free’ mentality, they will not have much space to grow and that will be noticeable.
    The problem is with personal risk aversion, when you commit yourself to an environment or situation because of the so called ‘safety’.
    But that is also true that you hear a lot about successful risk-takers. And if you look close, you will see, even in then, a lot of failures before having it right.
    Now, when these risky ideas approaches a business environment most of the management teams fears to fail with that. Mainly because they are a ‘management’ team and not R&D or an innovation team. And what happens is that sometimes, the fear felt by many when confronted with the new idea is the misunderstanding of their personal unconscious agreement with that idea.
    Recently I’ve read Blink by Malcolm Gladwell that brings some insights about our unconscious answers on different scenarios and that can be applied to ideas and risk-analysis situations.

  13. Risk is important to any business – but it’s not for everyone. Personally the last week has seen two risks from me, the first is buying airline and hotel tickets for a massive conference/event trip in the USA for March before half the conference details are confirmed. I got almost instant payoff because the trip landed me in LA the same days as “The Razzies.” A few phone calls later and I’m all set up to podcast from the red carpet at Razzies for The Podcast Network (http://www.thepodcastnetwork/).

    The longer term gamble is that this profile raising pays off in the medium to long term, but to take a successful “risk” you do need to spend time loading the deck as much as possible in your fsvour. You need to do groundwork, and a lot of the time this may seem to others to be unconnected, but when you get to join the dots… damn does it feel good!

  14. Risk is important to any business – but it’s not for everyone. Personally the last week has seen two risks from me, the first is buying airline and hotel tickets for a massive conference/event trip in the USA for March before half the conference details are confirmed. I got almost instant payoff because the trip landed me in LA the same days as “The Razzies.” A few phone calls later and I’m all set up to podcast from the red carpet at Razzies for The Podcast Network (http://www.thepodcastnetwork/).

    The longer term gamble is that this profile raising pays off in the medium to long term, but to take a successful “risk” you do need to spend time loading the deck as much as possible in your fsvour. You need to do groundwork, and a lot of the time this may seem to others to be unconnected, but when you get to join the dots… damn does it feel good!

  15. I agree with the idea that many people and companies are risk averse. While an individual can be risk adverse, a company can not afford to be. Which is one of the reasons that I think companies need to formalize skunk work projects. By making them official and giving them the support they need, like a different location. The company can have a group whose task is to lead innovation within the organization. If I remember correctly 3M lets its scientists work on side projects as part of their job, which is great. But I think it would be more productive to let people focus full-time on innovative ideas.

    I’ve noticed that many people, who may seem risk adverse, really don’t want to accept responsibility. You would think that fixing the problem kalbzayn mentions would be a low risk proposition with a measurable value-add. But fixing the problem would require that some one take responsibility and sometimes even responsibility can seem too risky.

    As for Monte’s post about failure. I always tell my teams that the only time you truly fail is when you fail to learn from the experience. We have become a culture afraid of failing, but failure is a very important part of success. I think we can all agree that Thomas A. Edison was a very productive and important inventor. I particularly like his quote, “Results? Why, man, I have gotten lots of results! If I find 10,000 ways something won’t work, I haven’t failed. I am not discouraged, because every wrong attempt discarded is often a step forward…” I’ve always liked that guy.

  16. I agree with the idea that many people and companies are risk averse. While an individual can be risk adverse, a company can not afford to be. Which is one of the reasons that I think companies need to formalize skunk work projects. By making them official and giving them the support they need, like a different location. The company can have a group whose task is to lead innovation within the organization. If I remember correctly 3M lets its scientists work on side projects as part of their job, which is great. But I think it would be more productive to let people focus full-time on innovative ideas.

    I’ve noticed that many people, who may seem risk adverse, really don’t want to accept responsibility. You would think that fixing the problem kalbzayn mentions would be a low risk proposition with a measurable value-add. But fixing the problem would require that some one take responsibility and sometimes even responsibility can seem too risky.

    As for Monte’s post about failure. I always tell my teams that the only time you truly fail is when you fail to learn from the experience. We have become a culture afraid of failing, but failure is a very important part of success. I think we can all agree that Thomas A. Edison was a very productive and important inventor. I particularly like his quote, “Results? Why, man, I have gotten lots of results! If I find 10,000 ways something won’t work, I haven’t failed. I am not discouraged, because every wrong attempt discarded is often a step forward…” I’ve always liked that guy.

  17. Man, the New-Ageish happy-cutesy Clay Christensenish stupid-mottos are in abundance. You don’t embrace failure, you try and avoid it at ALL COSTS. Sure you need risks, but you also need a diversified disaster plan, having fallback strategies. Sure greater risk is greater reward, but only a fool dances with risk for risk’s sake. You hit on as close to ‘sure things’ as you can get. Being risky, thinking risk itself will get you there, is pure suicide.

    Microsoft is a great example, playing brainless riksy games, thinking each failure, get you that much closer to success, sorta the Xbox strategy. Try, try and try, again. But taking lots of risks, won’t increase your chances of success, not ONE iota. It’s like flipping a coin, the odds are STILL the same EACH time. Eventually if you wait it out, maybe you will hit pay dirt. But the hit didn’t OWE itself to past falures, it owed itself to itself. See? Now Microsoft plays the ‘last man standing game’ too. But merely being last man standing, doesn’t equal success either. Last man standing for a market sector no one wants. Big deal.

    But go ahead continue to think that failure breeds success, it’s a ticket to a post-Microsoft.

  18. Man, the New-Ageish happy-cutesy Clay Christensenish stupid-mottos are in abundance. You don’t embrace failure, you try and avoid it at ALL COSTS. Sure you need risks, but you also need a diversified disaster plan, having fallback strategies. Sure greater risk is greater reward, but only a fool dances with risk for risk’s sake. You hit on as close to ‘sure things’ as you can get. Being risky, thinking risk itself will get you there, is pure suicide.

    Microsoft is a great example, playing brainless riksy games, thinking each failure, get you that much closer to success, sorta the Xbox strategy. Try, try and try, again. But taking lots of risks, won’t increase your chances of success, not ONE iota. It’s like flipping a coin, the odds are STILL the same EACH time. Eventually if you wait it out, maybe you will hit pay dirt. But the hit didn’t OWE itself to past falures, it owed itself to itself. See? Now Microsoft plays the ‘last man standing game’ too. But merely being last man standing, doesn’t equal success either. Last man standing for a market sector no one wants. Big deal.

    But go ahead continue to think that failure breeds success, it’s a ticket to a post-Microsoft.

  19. Not only do we need to take risks BUT we need to embrace failure! The more often we fail, the closer we are to success. Risks are minimised if you “resource and fund” them. Take lots of little risks and you increase your chances of success. It’s a lot like venture capital funding. They don’t bet the farm on one BIG idea but fund 100′s, knowing that you need that many bets to win with the next eBay or Google. I built a small software system that is free and you can follow my web site link to get it plus some audios and a transcript on this topic. No charge.

  20. Not only do we need to take risks BUT we need to embrace failure! The more often we fail, the closer we are to success. Risks are minimised if you “resource and fund” them. Take lots of little risks and you increase your chances of success. It’s a lot like venture capital funding. They don’t bet the farm on one BIG idea but fund 100′s, knowing that you need that many bets to win with the next eBay or Google. I built a small software system that is free and you can follow my web site link to get it plus some audios and a transcript on this topic. No charge.

  21. I read that post today and it was perfect timing. I had just read some personal criticism about me online and damn it hurt.

    But when I read that post, it reframed everything and I picked myself back up again. It really turned my day around!

  22. I read that post today and it was perfect timing. I had just read some personal criticism about me online and damn it hurt.

    But when I read that post, it reframed everything and I picked myself back up again. It really turned my day around!

  23. Though this sounds great, the logic doesn’t hold – you hear praise of risk only by the risk-takers who are still alive (and not by the ones in their graves!)

    The basic economic idea of risk v/s return is the most correct. Dont take risks, you wont cause great change, you wont be super popular and you wont have a billion $$$. But you will get by, Joe Fine. Take risks – the payoff is huge, but you could fall by the wayside too.

    Risk taking can be aspirational, but it can’t be a life strategy :) Death by risk-aversion – come on, there can be death by lack of common sense, not by risk aversion…

  24. Though this sounds great, the logic doesn’t hold – you hear praise of risk only by the risk-takers who are still alive (and not by the ones in their graves!)

    The basic economic idea of risk v/s return is the most correct. Dont take risks, you wont cause great change, you wont be super popular and you wont have a billion $$$. But you will get by, Joe Fine. Take risks – the payoff is huge, but you could fall by the wayside too.

    Risk taking can be aspirational, but it can’t be a life strategy :) Death by risk-aversion – come on, there can be death by lack of common sense, not by risk aversion…

  25. With three kids, two car payments, one stay at home wife, one mortgage, two school loans and a fair amount of near-term debt (read: credit card), I’ve worked myself into a position where I can’t take too many risks. I did enjoy changing jobs (and languages: VB6 to Java to C#) during the dotcom years (which was risky for me). I believe the risks paid off for me as I steadily moved up.

    Now if I could just muster up the courage to leave a nice day job to go work on my side gig full-time …

  26. With three kids, two car payments, one stay at home wife, one mortgage, two school loans and a fair amount of near-term debt (read: credit card), I’ve worked myself into a position where I can’t take too many risks. I did enjoy changing jobs (and languages: VB6 to Java to C#) during the dotcom years (which was risky for me). I believe the risks paid off for me as I steadily moved up.

    Now if I could just muster up the courage to leave a nice day job to go work on my side gig full-time …

  27. I just started with a client today where the person I will be helping spends 40-60% of her day doing support that could be reduced to 15 minutes a day if the company would invest a couple weeks of work. In just one year they could save like 20 weeks of work by just fixing some relatively simple problems.

    They’ve been trying to do a lot of new projects, but never find the time because of these support issues.

    The good news is that I should be able to slide in a few of the changes while we are making other improvements and everybody should end up very happy. Including the person that will have 16+ hours per week of error resolution turn into that much time developing and growing the team.

    Once I explained how easy a couple of the changes were she seemed very excited to take a look at them.

    I decided to take a little bit of risk when I became a salaried consultant. It’s just a little risk because I still get paid when the sales people have trouble finding a project that starts the day my previous one ends. For now it seems like a risk well worth taking, and as much risk as I am willing to tolerate.

  28. I just started with a client today where the person I will be helping spends 40-60% of her day doing support that could be reduced to 15 minutes a day if the company would invest a couple weeks of work. In just one year they could save like 20 weeks of work by just fixing some relatively simple problems.

    They’ve been trying to do a lot of new projects, but never find the time because of these support issues.

    The good news is that I should be able to slide in a few of the changes while we are making other improvements and everybody should end up very happy. Including the person that will have 16+ hours per week of error resolution turn into that much time developing and growing the team.

    Once I explained how easy a couple of the changes were she seemed very excited to take a look at them.

    I decided to take a little bit of risk when I became a salaried consultant. It’s just a little risk because I still get paid when the sales people have trouble finding a project that starts the day my previous one ends. For now it seems like a risk well worth taking, and as much risk as I am willing to tolerate.

  29. ” People are scared to do something different.”

    Man, that’s the truth. It’s why NT got so thoroughly buggered, for one thing.

  30. ” People are scared to do something different.”

    Man, that’s the truth. It’s why NT got so thoroughly buggered, for one thing.

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