Redesign and Relative Risk

The next two traits that billionaires have, as per John Sviokla and Mitch Cohen in The Self-Made Billionaire Effect (first introduced in a previous post), is that they redesign business models and consider risk differently than others do.

When a billionaire producer finds a need or gap and acts on his vision, he probably won't follow the existing rules. He will rethink and redesign the business model so that it's better suited to scale and create the massive value he sees in that market.

And if it looks like they're risk lovers, that's not really the case: billionaires just consider risk differently. They look at the relative risk and are more afraid of losing out on the opportunity than failing. They also clearly know their BATNA (best alternative to a negotiated agreement; i.e., the point to walk away) and never risk their "last penny." So what looks like risk from the outside is really premeditated and well-thought out strategy that has more upside than downside for them. They're also resilient so if they're wrong and do fail, they'll pick themselves up and try again (which is why they never risk their entire savings).

What we should learn from this is not to take anything for granted and to stay aware. Try to be in the present and question everything, including the things that were "always done this way." Try to find better or new ways to do things and don't be afraid to suggest them. If you believe in the idea strongly enough, go for it. Do plan, do think things through, but then act.

For those who manage others, allow your staff to question and try new things—better yet, encourage them to do so. Encourage smart risks and hire people who can think for themselves and challenge your thinking: these are the type of people that will help you and your team grow. And don't punish failure (unless it was negligent or malicious) since not only will that discourage future innovation, but if the talent leaves, you will lose what they learned from the experience.

Is there something you wish was done differently, either a process or a product? How would you do it differently and how are you going to share this?