In the summer of 1997 I had a close encounter with a shark. It was the day after I received news that my Grandpa Willson had passed on. I was fortunate to have a good friend, Gregg, whose family had access to an amazing place down on the South Coast of KwaZulu Natal in South Africa. I was on vacation with Gregg and his family, and he and I had been surfing for a couple hours before we had our close encounter. As we were paddled back out together after a couple of waves, while preparing to duck-dive under an approaching wave, we came within arms length of a massive shark. My guess it was a white shark. It was swimming perpendicular to us, and seemed to take no notice of us, but we sure noticed it. Instead of slamming headfirst into the side of this huge shark, Gregg and I both performed a quick about-face and made a beeline straight to the shore.
I’ve spent the last week, here in Playa Hermosa, Costa Rica. Driving around the jungle reminded me how similar South Africa is — we share a similarity in our rivers — crocodiles potentially lurk below the surface.
Crocodiles, Sharks, Jellyfish, and Sea-urchins all have something in common. They lurk beneath the surface in some of the most idyllic destinations on the planet. There is no paradise on earth that doesn’t have some sort of hidden dangers, issues, or complexities.
The same principle is true for a business. Even the most prolific, next-gen, awesome businesses have underlying issues which may not be visible to the business owner, employees, customers, or vendors. Problems may be lurking beneath the surface, completely hidden, waiting to strike at the most inopportune time. As a business owner/manager, your job is to understand those hidden dangers and to mitigate those risks to protect your business.
Porters Five Forces
A great place to start with your analysis of hidden risks is a thorough review of Porter’s 5 forces:
Take the time to research how your business is exposed. Write out your risks. Document them. Make a list of them all.
Risk Management Strategies
There are 4 basic responses to risk:
- Avoidance
- Reduction
- Sharing
- Retention
We live in a complex world and our issues are almost never one-dimensional or even two-dimensional. Problems are multifaceted and require complex solutions. In Costa Rica, according to CrocBite, there have been 54 recorded attacks in the last 100 years. In order to try reduce the number of attacks, signs are posted in potential crocodile areas, efforts are made to limit access to known problem areas, and even crocodile population control is explored. The same is true for dealing with brand loyalty issues, substitution products, or any other issue related to your business. Multiple strategies are often necessary to mitigate risks. Document your plan and expand on your ideas into actionable tasks. A good strategy is only as good as the execution phase.
Work your plan
Check out this earlier article: Ideas vs Execution. Plan out your tasks, break them down into one-time tasks vs recurring tasks, set dates, and revisit as often as necessary. Sitting back and enjoying the view is as necessary as protecting your investment through constant vigilance.
As I’ve stood on the balcony looking out over the beautiful ocean sunsets I haven’t allowed the anxieties of hidden dangers to spoil the view. A healthy balance in your approach is necessary. Step back, enjoy the view or the rewards of your efforts… but don’t let up on your plan and execution of it.
The day after my Gregg and I came within arms length of the shark, we went surfing again. The water was warm and the waves amazing. Not all risks are completely unavoidable, and often the risk is worth the reward. We understood that with only 350 attacks (90 fatal) in the last 100 years in South African history, the likelihood of us being attacked was very low. We had, and still do have, a health respect for the ocean and the animals therein. Business is the same. You need to mitigate your risks but when failure or close brushes occur, pick yourself back up and get back out there. Failure is only when you give up.
