Dangerous or Gutsy?

Scenario:
You and some friends are on a tour in the African savanna, enjoying the scenery and the wildlife, when an angry rhinoceros charges the vehicle. There’s a rifle on the seat next to you with enough power to stop the rhino. Do you

    a) Scream and cower in terror?
    b) Grab the rifle, take aim, and shoot?

Please note that this is a scary situation. Sitting up straight, taking careful aim, and shooting steadily will require a lot of courage. It’s a gutsy thing to do.

But it’s also the safest thing to do. If you miss, you’re no worse off than if you hadn’t tried, so there’s no downside risk. If you hit, you’re a lot better off than if you hadn’t tried, so there’s a lot of potential upside. You’re clearly better off doing the gutsy thing.

And… how does this relate to business?

We tend to associate “gutsy” stuff with “dangerous” stuff. And sometimes that’s true: going over Niagara Falls in a barrel requires guts and is dangerous. But sometimes, as in the rhinoceros example above, the “gutsy” decision is also the least dangerous decision.

And that happens in business sometimes, too. Buying enough factory capacity that you can actually meet demand, shipping a product you know isn’t quite as good as you’d like, or starting a blog in your free time… all of these take courage, but are, objectively, the best, smartest, safest decision.

Recognizing which ideas are dangerous, and which are gutsy-but-good, is one of the most important skills you can develop.

Resources for Further Reading
Intelligent Risk Taking
Risk Analysis

  • jim

    this is awesome man

  • im feeling it

  • trying to follow you on twitter but cant find your name

    • apingel

      My twitter handle is @apingel

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