Friday, November 15, 2013

Audentes Fortuna Iuuat - Why You Should Never Punt

Kevin Kelley, varsity football coach of the Pulaski Academy in Little Rock, Arkansas, never punts and always goes for the onside kick. His team has won 4 state titles in a football-obsessed state in 10 years, and his win-loss ratio is almost 6:1.

Wayne Gretsky said, "I missed 100% of the shots I didn't take." Gretzky holds or shares 61 records in the National Hockey League including almost every category related to scoring and winning.

"Audentes fortuna iuuat" is Latin for "Fortune favors the bold." This is an ancient proverb that pretty much agrees with Kelley and The Great One, Mr. Gretsky. Despite this time-honored wisdom and so many examples supporting it, most companies are hyper-conservative and dogmatic to the point of paralysis, leaving them almost universally vulnerable to the phenomenon described as The Innovator's Dilemma (iconic 1997 book by Clayton Christensen). The fact is, most companies are aware of this yet continue to do little to change their behavior.

The lesson? Take risks. A lot of them. All the time. The only outcome in business (or life) that can ever be guaranteed is failure. Successes, big or small, require that you attempt to succeed. What are the benefits of risk-taking? If you fail, you have the opportunity to learn a lot about what does not work - so you won't have to do that again. If you succeed, the rewards can be massive. In both cases, you generate a positive outcome. If you never try, you generate nothing of value at all. People are rational. 

When given the choice between doing something that will definitely provide some benefit or doing something that will definitely provide no benefit, there is no question about what the decision will be. In big business, however, this is seldom the case. Why? Complacency is a big reason. Inertia is another. We reason that what worked before will work again, and this is not without merit. It ignores the reality, however, that there is always a better way. However successful we are at providing arguments against innovation and risk-taking, it is simply not rational.

The implications are obvious. Take risks. Not foolish ones, and not risks that will ruin you if they do not produce the positive results you are seeking. Take risks all the time. Create a cycle of learning and self-disruption to combat the natural indolence brought about by past successes. Only make NEW mistakes. If you learn from failure and adapt your actions to incorporate this knowledge, you will always be improving. Understand sunk cost theory. If something is not working, stop doing it. (This turns out to be a big challenge for most companies.) Never punting does not mean being foolish. It means that you have to take chances that make sense.

It is almost certain that your company is not doing this. If you want to make a difference and become a valued source of disruptive innovation, creating value at a rate that can transform your company or industry, the mantra is obvious -- go for it.