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.
The Problem with Exceptions
November 22, 2011
Picking up where my last blog left off, this posting presents two more of six lessons that experience has taught me during my enriching years with the MHSAA.
Lesson No. 2: Beware of bad precedent.
An exception today that doesn’t seem to matter much is almost certain to be recalled and used against you tomorrow when it really does matter. People have poor memories for most things, but they have long memories for exceptional things, like making an exception to a rule.
A corollary to this lesson is that “no good deed goes unpunished.”
Lesson No. 2 is closely related to Lesson No. 3: The path of least resistance usually is not.
Making an exception for a squeaky wheel will likely lead to more noise, not less.
One corollary to this lesson is that there will be more fallout when people believe you have ignored rules than when people believe you have been heartless in applying the rules as stated.
A second corollary to this is that following the rules is the safest harbor during stormy seas.