Risk Taking, the Smart Way

When you are successful, it’s easy to fall into the trap of doing what you’ve been doing because it’s working. It paid off before, so it will pay off again. Business books are littered with examples of once great, industry leading companies that have been laid low because they could not change their behavior to meet how the world evolved around them. Sears, Kodak, and Yahoo are just a few examples. This has also happened to individuals that thought they were “safe”. They believed their job would never disappear, they would never be laid off, they would never hit a ceiling in their career. Yet, they were disrupted.

Take the Right Risks

One of the ways to disrupt yourself or your business, is to use Guardrail #1 on the Personal Disruption Framework? on the S Curve of Learning?--Take the Right Risks.

Which brings us to Mike McDerment.

Mike is the co-founder and CEO of FreshBooks, the number one accounting software in the Cloud which makes billing, organizing expenses and tracking billable time painless for small businesses. To date, the company has helped over 24 million people in over 160 countries. I talked to Mike on my Disrupt Yourself Podcast.

Early in his career, he was a small business owner working out of his house. He became frustrated with how he was processing and tracking client invoices and bills he had to pay. So, in his spare time, he developed a way to automate the process. Which eventually led him to creating FreshBooks. But, as the years went on, technology and customer expectations evolved and he faced a common challenge: How do we make changes, keep up with current technology, keep existing clients happy, and not tip our hat to competitors?

“Hey, we’re having great success. Our customers are very happy. They’re the biggest driver of the growth of our business,” Mike said. “But if I look into the future, you know, five or 10 years, I’m concerned that the technology we’re built on is not going to set us up to win in that future time period and future state.”

His solution? He took the Right Risk. Mike created a second business within his business to pilot new ways of meeting his customer’s needs while still keeping up with emerging technology. He knew that he needed to examine his core product and make some fundamental changes. However, as a flagship company for cloud-based accounting, Mike also wanted to make sure that his team could take risks without feeling as though they were endangering the information of their hefty client list. He created a new company, with its own website, branding, and legal name, which he and his team used as their “petri dish” to take risks and set FreshBooks up for future success.

Expedition Skunkworks

Part of the challenge, similar to many mature organizations, was helping people let go of mental maps of how things were currently done in order to explore new options. “We started out with a very small team and they spent two weeks away from everybody else basically making some designs of what the new thing could be.”

It wasn’t just a pet project, though—everyone on the team knew that the stakes were real, and the project could be scrapped if it didn’t meet benchmarks. But, the excitement was infectious, and Mike soon found himself with a new, thriving start-up.

Using everything they learned in their mini-startup, FreshBooks was able to make a smooth transition to their new platform and the team discovered valuable information about their customers in the process.

This is similar to the famous Lockheed Martin Skunkworks. That’s where they set aside a group of people outside of the normal chain of command to let them innovate something new without the necessary constraints of the current operating environment.

This type of approach can be used for personal disruption as well, of course with a twist. People often take on new assignments, side projects, volunteer efforts, or further their education—inside or outside of the office—to develop new skills, gain new insight, or build experience for the resume. The goal is to take the Right Risks that can propel you forward.

How can you create a small team within your organization to pilot a new idea? How can you build that team once you have initial success? What areas can you take a risk now to develop new skills in your career to keep you ahead of the curve?

If want to prime yourself for taking the right risks, check out these questions on hiring potential. They’ll give you some insights on what the right risks might look like for you!

*****

If you enjoyed this article, here are two ways to stay in touch.

1. Sign Up for our Growth Through Disruption emails–––a weekly dose of personal disruption read by tens of thousands of people across the globe. No spam. Just a newsletter meant to help you grow faster. Sign up here.
2. Download this free resource on the seven guardrails of personal disruption. Visit whitneyjohnson.com/calm

*****

Whitney Johnson is the CEO of human capital consultancy WLJ Advisors, an Inc. 5000 2020 fastest-growing private company in America. One of the 50 leading business thinkers in the world as named by Thinkers50, Whitney and her team are experts at helping high-growth organizations develop high-growth individuals. She is an award-winning author, world-class keynote speaker, frequent lecturer for Harvard Business School's Corporate Learning and an executive coach and advisor to CEOs. She is a popular contributor to the Harvard Business Review, has 1.8 million followers on LinkedIn, where she was selected as a Top Voice in 2018, and her course on Fundamentals of Entrepreneurship has been viewed more than 1 million times. In 2017, she was selected from more than 16,000 candidates as a “Top 15 Coach” by Dr. Marshall Goldsmith.