Business & Backflips: Risks Worth Taking?
I want to talk about risk.
No, not the board game — actual, real-life risk.
Have you ever thought about the difference between a good risk and a bad risk? How can you recognize the kind of risk that could expose you to the unlimited upside, or the kind of risk that could lead to uncapped catastrophe? The ability to analyze risk could mean the difference between greatness and failure, limitless potential and horrible catastrophe — and sometimes even life and death.
Story time: last week I found myself strapped to a pair of skis looking down a ramp into a pool of water, Olympians and trainers looking on, all expecting me to do a backflip.
It was a birthday gift from my wife who knew that I enjoyed skiing as a teenager. The Olympic ski jumper who went just before me had done a double-backflip with several twists, and now everyone was watching me and waiting for me to go — albeit off a much smaller ramp.
I could see my wife and kids watching from beside the pool, and a sense of panic started to well up inside me. I have a wife and kids and a career! I took a couple of deep breaths to calm my nerves and remembered that I like calculated risks. I reminded myself of several precautions I had in place, like life insurance and disability insurance. The chance of needing either of those was extremely small, but it was nice to know they were there. Additionally, I had been instructed by professionals, there was a lifeguard/EMT at the ready, and I would be landing in a pool of water. I realized the chance of catastrophe was extremely low, and making a life-long memory was almost a surety. It would be an amazing experience ski-jumping with Olympic athletes and sharing my love of adventure with my family!
Afterward, I thought back on a memory of another kind risk I took 20 years before as a 15-year-old. I was raised in a very hands-off, Tom Sawyer-esque style, and my adventurous spirit was allowed to flourish. Oftentimes, because I was the only kid on the block who was allowed to ditch school to ski, I had to ski by myself. After a particularly good snowstorm, I decided to go skiing at Alta ski resort. It’s known for having the best snow, but it was pretty far from my home. I had to transfer between several buses, and by the time I got to the resort, it had been open for a couple of hours so a lot of the good powder had already been tracked out.
In search of fresh tracks, I decided to ski the backcountry — the part of the resort where you have to hike up to ski instead of taking the lift. After a few amazing runs, I skied up to a ski-bum looking guy who was building a jump to launch himself off of a pretty decent-sized cliff.
I complimented him on his work and he said, “Yeah, it’s the perfect jump for a backflip!” I had never done a backflip. However, being young and spontaneous, I decided that I wanted to try doing my first backflip on this stranger’s dangerous homemade ramp out in the backcountry… where nobody knew I was.
Even though everything ended up okay, I over-rotated my backflip and landed flat on my back. Fortunately, the snow was deep enough that I wasn’t injured, but if I had landed on my head I wouldn’t have been so lucky. Looking back it was a terrible risk to take — I was in the backcountry and there was no ski patrol out there to help me if I got hurt. I was with a stranger, and I have no idea if he would do anything to help me if I needed it. I was at the resort alone, so there was no way for people to connect me back to a friend or an emergency contact. It was a really stupid risk because it exposed me to absolute catastrophe.
I’ve always been attracted to risks, but over time I’ve gradually figured out which ones are worth taking. While I love the memory of both experiences, I would never repeat the backcountry backflip. The Olympic ski jump into the pool, however, gave me similar satisfaction without threatening my life.
At Harmon Brothers, part of my job is determining what kind of risks would be unsafe for the company or clients and expose us to uncontrolled catastrophe, and what kind of risks will catapult us ahead of our competitors and expose us to uncapped payoffs. When I encourage the team at Harmon Brothers to take risks, it’s always within that framework. When I invite our clients to take a risk on a Harmon Brothers campaign, for instance, it’s always important for them to understand that the potential downside is limited, while the upside of a Harmon Brothers campaign often exponentially exceeds expectations.
Thinking about risks in these terms has had huge payoffs for Harmon Brothers, not only within individual campaigns but also in choosing clients. Additionally, we use this strategy as we experiment with ways to expand and innovate as an organization. For example, we just launched Harmon Brothers University, which we believe raises the bar in online training and education. It has been a big risk and investment, but a risk without catastrophe and with unlimited upside potential. Our whole company isn’t staked on its success because we can still make ads, and HBU is proving to be invaluable to our students while greatly expanding our talent pool.
So what about you — how do you find good risks while filtering out the bad? What strategies do you use?
