Unless You Take Risk You Run the Risk of Being Eliminated


Prior to my career as a futurist I spent eleven years as an employee benefits broker. My transition to the field I'm in now started around 2010, less than two years after the Great Recession. During that time of transition I watched the majority of my old colleagues move from the “prospector” strategy to the “defender” strategy in response to healthcare reform and the downward economy. These two classifications are known as the Miles-Snow Typology, wherein the “prospector” strategy embraces risk taking, innovation, and a constant search for new opportunities, and the “defender” strategy avoids risk and works to defend what they have rather than grow and expand.

This is symptomatic of increased uncertainty about the future. But let's be honest...

“Has the future ever been certain?”

Of course not! Although our mental model over the past 150 years has convinced us that we can make predictions within a comfortable range of certainty.

As an example, let’s consider the early days of healthcare reform. I do not wish to debate the pro’s and con’s of the ACA, but instead to merely point out the disruption it created in the industry for insurance companies, individual and employee group members, and health insurance brokers.

Here was the problem:

  1. The insurance companies decreased broker/agent commissions. Broker business at its core is 100% commission (minus any additional services or fees).
  2. Insurance premiums continued to rise despite efforts to contain member costs.
  3. Companies could no longer afford to provide decent benefits for their employees.

This created a vicious cycle where no one was winning. Companies couldn't afford to buy. Commissions were cut on group and individual plans, meaning brokers had less incentive to sell as market share continued to shrink. At the same time these brokers had to significantly increase their client list in order to maintain what they had.

The result? Fear.

Fear to innovate and go beyond the limits of their industry.

Fast forward to 2020 and we find ourselves in the same situation with a global pandemic, a broken healthcare system, unprecedented economic inequality, a failing infrastructure, and (at least in the U.S.) the highest level of political polarization since the months before the Civil War.

As a result, and at the time of this writing, we're faced with the same opportunity we had in 2008.

There are those who still believe that veering from the “way we’ve always done things” is too risky. In other words, "defend the status quo at all cost."

Unlike 2008, that option is not an option at all. I for one, and thankful for that. 

When individuals, organizations, and governments fail to act because of fear and uncertainty, they unwittingly take the biggest risk of all.

As the amount of uncertainty increases, the amount of fear increases with it. When fear increases then the amount of risk taken decreases. As the amount of risk taken decreases, the amount of new and innovative solutions decreases with it. As the amount of new and innovative solutions decreases, the level of uncertainty increases and we’re worse off than we were before. 


Does this situation sound familiar? Whether it's your company, industry, or decisions around public policy, strategy that starts with a foundation of fear and excessive risk aversion ultimately ends up replaced, irrelevant, or extinct.

Bottom line is this:

In order for your company to thrive in any environment you must take risks. Here are a few key steps to an adaptive and resilient future:

  • Change your perspective and your strategy will follow. It’s not uncommon to mentally “block out” information that appears unrelated or irrelevant to the task at hand. Information overload may cause us to miss unexpected issues or events.
  • Embrace uncertainty and explore undiscovered territory both within and outside your industry or sector. Your longevity depends on it.
  • Test your assumptions. Bad strategy is all too often rooted in present day constructs that often go unquestioned. Look for bias in all forms. Where are you getting your data and where is the contrasting view point? Asking these questions on the front end will save you tremendous heartache on the backend. Not to mention your strategy will be far more robust.
  • Incorporate risk taking as a primary function of your long-term strategy.

The question you must ask yourself is, “are you a prospector, taking an active role in creating the future, or are you a defender, hunkered down, anxiously awaiting the future?”

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