Experience and Risk: The Basis for Success

From owners to employees, the goal is the same – business success. ClmbrSounds good, but have they prepared themselves for the journey. Business success does not happen over night for most people. It is a journey of many years, undergoing many experiences develops your professional skills and prepares you to deal with various risk conditions that you will be confronted with or available to you in order to achieve your objectives.

Definition: Familiarity with a skill or field of knowledge acquired over months or years of actual practice and which, presumably, has resulted in superior understanding or mastery.

Experiencing for experience sake is not the point. If you have 10 years of experience, is it cumulative, or just one year of experience – 10 times? If you have 10 years of experience you should have graduated several levels and become recognized for your progress and mastery of your business skills and responsibilities.

Experience, over time, builds knowledge and wisdom and prepares you to deal with more difficult circumstances. You should be able to project or anticipate what will happen under various circumstances and potential difficulties.

What about your use of “experience” to develop your professional skills and abilities? Have you taken advantage of experience to improve your understanding of business? You should regularly look for opportunities to get more experience, which will broaden your skill set in order to operate in a variety of business conditions?

Experience gives you insight into complex business conditions. This will enable you to determine if you and or those around you are able to deal with a business condition successfully, or if you require additional resources. Experience will also assist you in deciding to withdraw from something that might do more harm to the business or your career, than good.

Would you attempt to climb the rock face in the picture at the top of this article without “experience” climbing easier rock faces with ropes and expert instruction? Experience would build your climbing knowledge, build confidence, and expand your awareness of various conditions to expect that could complicate your climb.

An interesting “experience” metaphor is to look at what a pro golfer does to prepare for a variety of course conditions. They play difficult courses that present tough terrain or weather conditions. In so doing, they prepare themselves for the unexpected, that they might encounter, in terms of wind, rain, tough lies and demanding terrain. Do you look for experience to test your professional skills, so that you can be prepared for the unexpected?

Experience Opportunities / Benefits

Experience Benefit
Look outside your assigned responsibilities for activities that will increase your understanding of the business. Increased value to your primary job and qualifies you to work outside of your primary job.
Coordinate with others outside of your department to improve business processes, solve a product problem, or improve relations with customers. Demonstrate that you can work in team situations, across organization boundaries.
Head up an interdisciplinary team to solve and correct a product problem. Increases your technical knowledge of the product as well as the manufacturing process.
Take responsibility for proposing, implementing, and achieving the Return On Investment (ROI) objective of a major piece of capital equipment. Increases your understanding of the process involved and the associated accounting process used to record ROI.
Take responsibility for or participate in implementing an integrated business system for your company. Gives you a broad understanding of the business transactions that are essential to the running of the business.


Definition: The probability of loss inherent in an organization’s operations and environment (such as competition and adverse economic conditions) that may impair its ability to provide returns on investment.

One of the greatest challenges facing leaders in business is assessing and accepting risk. Risk may be something that is optional, where you have the option to decline to take the risk such as opening a new market.

Examples of optional risk:

  • Introducing a new product.
  • Authorizing an expansion of business operations.

In other cases, this option may not be available and a decision or action is necessary and, of course, time is always a factor. Action must be taken or the business will face potential loss of business, customer relationship, or profitability.

Examples of risk that requires action:

  • Reducing price or offering more favorable terms to your customers when faced with stiff competition.
  • Outsourcing work that you would normally do internally in order to meet customer demand.

A wrong risk choice may produce an outcome that may affect your reputation, or worse the bottom line of the company.

Good risk takers may not come by it naturally. What makes the difference is their aptitude to absorb vital and pertinent information from past experience and to seek out valuable counsel who can advise them. A library of experience will help them assess the immediate risk and to select a course of action that will minimize, or contain, the exposure of risk to a manageable level.

Do people ever fail when making risky decisions? Yes! When the post mortem of the decision or action is analyzed, the key question is what measures were taken by the leader (or decision maker) to minimize, or contain, the risk. If it is determined that a reckless decision was made where reasonable consideration was not taken of all of the conditions present to measure the risk present in the action, then the responsible leader will bear the consequences.

On the other hand, if it was determined that the leader made every effort to manage the risk, and protect the business, but due to other factors beyond his control the action failed. It then becomes a (possibly expensive) learning experience. You may be exonerated, but you don’t want to have too many outcomes like this on your record.

Definition: Term used to describe a person that has achieved his or her personal, financial or career goals.

Success is a function of hard work, knowledge, experience, wisdom and some luck. Those that are more successful than others are often more adept at converting their experience into major responsibility.

Taking on major responsibility does not happen without developing a reputation as one who manages risk well – either avoiding unnecessary risk or dealing with unavoidable risk successfully. Consequently, a successful person converts their experience and risk management into profitable business for the company. Peers, executive management, and board of directors – trust leaders that can successfully convert risky situations into profitable business.

Business success for many leaders is a result of the pertinent experience they have amassed over time and how they have developed their ability to handle risk. There are many managers who get a lot of experience but are risk averse. They pass the risk decisions to someone else. They may be good administrators in their position, but over time their risk averse nature will disqualify them from broader responsibility in the business.

In order to develop a risk track record do not fall into a reckless mode. Study others who seem to handle risk situations well and understand what method or process they use in their decision process. You might be surprised at how many people they involve as part of their decision to make a risk decision.

In the beginning, gaining experience and dealing with risk is a challenging path. The climber on the picture at the top of this article did not just become an experienced rock climber. They crawled, walked and then found themselves running as they selected tougher and tougher climbs. In the end, they are capable of climbing difficult rock faces solo. The road to success is the same. Seek experience opportunities, build a foundation of knowledge and wisdom, and master your ability to assess and deal with risk.

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