The Love/Hate of Risk

I am not a businessman.  A truer statement could not be said. 

And yet I studied business.  After my undergraduate studying psychology and my early career in IT.  I gave up both of those pursuits (rather willingly I might add) to investigate the world of business - a study in contradiction if ever there was one.

Management is many things.  Some people say it is a counterpart to Leadership.  Others say they are the same.  Some people say it is technical.  Others say it is personal.  The only thing most people can agree on is that Business Management is about making good decisions with incomplete information.  We cannot know the future with our human faculties and so we make the best informed decision we can.

Which introduces us to the idea of risk.  Risk, simply put, is the probability of failure.  Of course, in hind sight, we see the course that events have run and the past has only one probability - that which actually happened.  And so we look to the past to see the future.  We run complex calculations and statistics on the past to come up with probable scenarios.  We see how often our predictions hold true and we refine our predictive method.  Of course, we are often wrong, but we try to minimize that by betting on the surest things.  And so we play it safe.  We quantify Risk with things like interest rates and volatility indexes.  Business is, by nature, risk averse.

Then why, in every class I took with little exception, did every professor encourage us to take chances, be bold, and push the envelope?  Business people say they want "out-of-the-box" thinking.  Clearly out of the box thinking carries with it more inherent risk.  So why on earth would they want it?  You would think they would want a room full of actuaries, statisticians, and financial analysts.  In point of fact, they do surround themselves with these people.  They want round pegs for round holes because they know they fit.

So why the platitudes about going out on a limb.  Perhaps they like to see people fail because it makes them feel better about their own failures.  Or perhaps the casino mentality drives them to wish for "bet big, win big" scenarios.  All I know is they aren't really looking for people who are different.  People who might have a different point of view.  People that act different.  Not that they are looking for "yes" men, but that they are looking for like-minded thinkers.  People that solve problems the same way.  People that treat risk the same way.

And breaking into that club if you're an outsider can be almost impossible.  They love the idea of risk, but hate risking anything.

Cowards.