Risk Taking
February 14, 2012
The June 22, 2009 cover story of Business Week which I just reread was titled “The Risk Takers.” It featured businesses which during difficult times, instead of playing it safe, placed bets on some gutsy new strategies.
To make a point, the author used an illustration that we can relate to here in Michigan. I paraphrase:
Imagine a driver on a snowy night. If the car starts to slip, the driver’s natural instinct is to slam on the brakes and jerk the steering wheel in the opposite direction. But the laws of physics advise the opposite: laying off the brakes and steering into the turn.
The author reports that from 1985 to 2000, the average merger in an economic downturn created an 8.5 percent rise in shareholder value after two years; while the average deal in good times resulted in a 6.2 percent drop in the buyer’s share value. In other words, mergers – one of the biggest, boldest moves in business – do better in bad times than good. Much better, in fact.
It wasn’t recklessness this article was celebrating; it was risk taking – daring to be aggressive, rather than just defensive, amid a weak economy. Steering into the turn, so to speak.
Just like the winter driving analogy in the article, we who are involved in school sports in Michigan can relate to the big idea of the article because we too made some of our biggest moves at our bleakest times. The MHSAA retrenched in some ways, but the greater theme as we climbed out of our bad times of 2008 was that we made unprecedented investments in new technology.
Today MHSAA.com is the website of highest traffic and MHSAA.tv is the website with the most productions of any comparable organization in the U.S. And all of these investments in technology during those bad times have allowed us to undertake the ArbiterGame project now that will provide all member high schools the electronic tools necessary to make their tough tasks of school administration more streamlined than ever before.
Panama Points
January 25, 2012
Author David Kord Murray opines in Borrowing Brilliance that almost all good ideas are borrowed, and the farther afield one roams from the topic at hand the more useful the idea may be (and the more brilliant it may appear to be).
So it didn’t surprise me to discover useful ideas for modern day leadership and management in a book written in the 1970s about a period many years before that – David McCullough’s history of the building of the Panama Canal titled The Path Between the Seas.
I learned first that the primary task of this huge project was not what it appears to be. It was not primarily an engineering feat, but medical. Not removing dirt, but disease. Not conquering the largest obstacles, but the smallest insects. It was only after the diseases were understood and controlled that the construction could advance and the project could be completed.
Second, I learned that once the construction was begun, there was a bigger challenge than digging the pathway clear. It was removing the unwanted dirt and debris to other places. It wasn’t the front end of the project alone that mattered, but the back end as well: where to put the hundreds of millions of tons of rock and dirt on or around this narrow isthmus of land.
For every project there is need to assess what the underlying issues are that might get in the way of accomplishing the more apparent tasks before us.
And for every project there is need to fully assess consequences. We don’t want merely to move the dirt around, creating new problems as we do so.
I will be considering these thoughts as I soon see with my own eyes the Panama Canal, constructed over four decades and completed almost 100 years ago. And gratefully, I will be fully immunized for diseases largely conquered during the completion of this engineering marvel.