The Risk of Opportunities
Opportunities are situations where you (or the organization) has to respond quickly in a unique situation, not likely to happen again (soon).
For instance. You walk in the street and before you know it you bump into someone who was talking on the phone and didn’t notice you. In the “accident” some papers fall on the ground and you help the other getting them. “I’m sorry I wasn’t paying attention…” On the ground you notice a ticket to the opera and you start a conversation about Romeo and Juliet… The next moment you are having both a cup of coffee in the nearest coffee-shop.
That is one example of an opportunity in the private sphere. In the organizational setting an opportunity is one where because of a similar event a business response may be very profitable. It only requires that you act soon.
For instance, in the business setting, the uncertainty in the stock market may be used as an opportunity to increase interest rates to attract clients’ savings. Many some private investors are often “afraid” to invest during a bear market, and a high interest rate on savings may attract new clients.
Now where is the risk?
Minor risks are that your organization is too late (time-to-market) in launching the new product (including advertisements and such) at a moment where the stock-market is already turning positive.
Another more important risk however is that the opportunity brings also unexpected changes in your business. Perhaps not in the short term, but in the long term.
Now think again about the two people how bumped into each other. When is this a risk, rather than an opportunity. The opportunity is a risk when they both already have a compromise — at home. If you are married or otherwise engaged, opportunities are more of a risk than if you are free and unattached.
The business equivalent is more or less the same. Your business is compromised to a certain strategy. In the financial example: your business is to attract investors and people that actively trade on the stock-market. With the saving-opportunity you attract new clients, but they are likely to leave when the interest rates will decrease again. Or they are clients but they do not trade, which make them the least profitable.
Another risk is that you send a message to your existing client base — after having offered them training courses to learn more about investment and to become better investors — that you are no so certain about investment on the long term. In the first signs of a possible bear-market, you send them into savings. Which is probably the worst choice.
Opportunities are fine. But they are just that: opportunities. You shouldn’t forget the risk they bear.
Hans Bool
Hans Bool writes articles about management, culture and change. If you are interested to read or experience more about these topics have a look at: Astor White.
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