100 % safe is 100 % too late

For a long time, the calculated risk was an integral part of any serious business management. Interestingly, there are two fundamentally different points of view: Some focus on the damage that can result from a risky undertaking – others focus on the probability of occurrence.

I think today both are almost an anachronism. It is again en vogue to take risks, yes, one can stand out in the market almost alone by taking risks at all. While I consider the calculation of the possible damage of a risky initiative as an entrepreneurial duty, I have little regard for calculations of the probability of occurrence – and the decision based on it.

„Self fulfilling prophecy.

Because the more you concentrate on how much of a new entrepreneurial initiative can go wrong, the more you do to reduce exactly this ratio. On the one hand, this reduces the risk of falling, but almost always too little serious consideration is given to the fact that the probability of success also decreases.

I have seen a number of initiatives and undertakings in recent years which follow exactly this pattern. You’ve put yourself in an unfavorable position without exception. And, it should be mentioned, an unfavourable position can also be a strategic one, although the current business is still running well.

This concentration on what can be lost is an administrative characteristic not an entrepreneurial one. It leads to the short-term safeguarding of the existing – which in itself is nothing bad at all. In the long term, however, this way of thinking will not create anything new, no adaptation, no new offers, and it will lead to a loss in the market.

Focusing on what can be won

If we look at entrepreneurs in the early 20th century and in the post-war years, it seems to us that they have taken enormous risks. I say that’s not correct, because they didn’t have much to lose. Many of these entrepreneurs and the companies were so successful because they radically focused on what they could win.

Concentrating on what to win when there is a lot to lose is indeed quite a challenge. It means doing one thing and not letting the other.

Late Harvest Concept

We can see from the example of the automotive industry just how difficult such a thing can be. On the one hand, the German automotive industry in particular has a market position that is formidable and highly profitable – it has a lot to lose – on the other hand, the automotive market is slowly but surely breaking down. So there’s a lot to win.

The question is what to do in such a situation. In my opinion, it makes sense to invest a significant portion of the profits in high-risk investments instead of distributing them to shareholders. To take advantage of these new opportunities.

Most traditional car manufacturers have more or less prescribed a concept of „late harvest“: they want to wait until the market shows them the way and then cover a demand with full (financial) strength.

Missing learning path

Paradoxically, the risk calculation for such an approach shows quite good values. However, I believe that the strategy of late harvesting is highly risky because such a risk assessment externalizes circumstances that are very difficult to quantify.

More than anything else, these companies lack the learning curve for new market and sales models. Even as a company, it is essential to make mistakes yourself and learn from them. This is not great, but it is the basis of any further development.

100% too late

In my opinion, the biggest risk is that you can no longer react to market changes in a reasonable time and be pushed aside. One is simply too late and, to make matters worse, does not have the expertise to play a relevant role in a changed future market. In the end, even large financial resources no longer help.

With all due respect to a trustful handling of business risks, make sure that you are not too late in developing your business. Because surely too late is still too late.

Alain Veuve

http://www.alainveuve.ch/

100 % sicher ist 100 % zu spät

Lange war das kalkulierte Risiko ein fester Bestandteil einer jeden seriösen Unternehmensführung. Interessanterweise gibt es dazu zwei grundlegend verschiedene Betrachtungsweisen: Die einen fokussieren auf den Schaden der durch ein riskantes Unterfangen eintreten kann – die anderen fokussieren auf die Eintretens-Wahrscheinlichkeit.

Ich denke beides ist heute schon fast ein Anachronismus. Es ist wieder en vogue Risiken einzugehen, ja man kann sich im Markt schon fast alleine dadurch abheben überhaupt Risiko zu nehmen. Während ich die Kalkulation des möglichen Schadens einer risikoreichen Initiative als unternehmerische Pflicht erachte, halte ich von Berechnungen über die Eintretens-Wahrscheinlichkeit – und der darauf basierenden Entscheidung – reichlich wenig.

«Self fulfilling prophecy»

Denn je mehr man sich bei einer neuen unternehmerischen Initiative darauf konzentriert zu wieviel Prozent diese schiefgehen kann, desto mehr tut man um genau diese Kennzahl zu senken. Auf der einen Seite senkt man dadurch das Risiko zu fallieren, fast immer wird dabei aber zu wenig seriös in Betracht gezogen, dass auch die Erfolgswahrscheinlichkeit sinkt.

Ich habe einige Initiativen und Unternehmungen in den letzten Jahren beobachten dürfen welche nach genau diesem Muster handeln. Sie haben sich ausnahmslos in eine ungünstige Position gebracht. Und, das sei erwähnt, eine ungünstige Position kann auch eine strategische sein, obwohl das aktuelle Business noch gut läuft.

Diese Konzentration auf das was man verlieren kann ist eine verwalterische Eigenschaft keine unternehmerische. Sie führt zur kurzfristigen Sicherung von Bestehendem – was ja per se überhaupt nichts Schlechtes ist. Langfristig schafft diese Denke aber nichts Neues, keine Adaption, keine neuen Angebote und es wird dazu führen, dass man damit im Markt verliert.

Fokussierung auf das was zu gewinnen ist

Betrachten wir Unternehmer in der Gründerzeit oder zu Beginn des 20. Jahrhunderts und in den Nachkriegsjahren, scheint uns, dass sie enorme Risiken genommen haben. Ich behaupte das ist so nicht korrekt, weil sie eben gar nicht viel zu verlieren hatten. Viele dieser Unternehmer und die Unternehmen waren so erfolgreich, weil sie sich radikal auf das konzentrierten was es zu gewinnen gab.

Sich gleichzeitig auf das zu konzentrieren was zu gewinnen ist, wenn viel zu verlieren ist, ist in der Tat eine ziemliche Herausforderung. Es bedeutet, das eine zu tun und das andere nicht zu lassen.

Konzept der späten Ernte

Wir sehen gerade am Beispiel der Automobilindustrie wie schwierig so etwas sein kann. Zum einen hat insbesondere die deutsche Automobilindustrie eine Marktposition die formidabel und hochprofitabel ist – sie hat also viel zu verlieren – auf der anderen Seite bricht der Automobilmarkt langsam aber sicher um. Es gibt also viel zu gewinnen.

Die Frage ist, was man in einer solchen Situation tun sollte. Meiner Meinung nach ist es sinnvoll, erhebliche Teile der Gewinne in hochriskante Investitionen zu geben anstatt sie den Aktionären auszuschütten. Um eben diese neuen Chancen zu nutzen.

Die meisten traditionellen Automobilhersteller haben sie mehr oder weniger einem Konzept der «späten Ernte» verschrieben: Sie wollen so lange warten bis der Markt ihnen den Weg weist um dann mit voller (finanzieller) Kraft eine Nachfrage abzudecken.

Fehlende Lernstrecke

Paradoxerweise zeigt die Risikokalkulation für ein solches Vorgehen ziemlich gute Werte. Ich glaube jedoch, die Strategie der späten Ernte ist maximal risikobehaftet denn eine solche Risikobetrachtung externalisiert Umstände die nur sehr schwer zu quantifizieren sind.

Mehr als alles andere fehlt diesen Unternehmen die Lernstrecke in neue Markt- und Umsatzmodelle. Es ist eben auch als Unternehmen wesentlich, Fehler selber zu machen und selber daraus zu lernen. Das ist nicht toll, aber Grundlage einer jeden Weiterentwicklung.

100% zu spät

Das grösste Risiko ist meiner Meinung nach das, dass man eben nicht mehr in angemessener Zeit auf die Marktveränderungen reagieren kann und ins Abseits gedrängt wird. Man ist schlicht zu spät und hat zu allem Übel auch nicht die Expertise um in einem veränderten zukünftigen Markt eine relevante Rolle zu spielen. Da helfen am Ende auch grosse finanzielle Mittel nicht mehr.

Achten Sie also bei allem Respekt vor einem vertrauensvollen Umgang mit unternehmerischen Risiken darauf, dass sie mit der Weiterentwicklung Ihres Business nicht zu spät unterwegs sein. Denn sicher zu spät ist trotzdem zu spät.

Alain Veuve

http://www.alainveuve.ch/

 

Fehler erlauben als Basis für Kreativität? Bitte nicht!

Ich habe mich sehr geehrt gefühlt und gefreut, als ich gefragt wurde, ob ich nicht vielleicht einen Gastbeitrag für 2changeculture zum Thema „Fehler erlauben als Basis für Kreativität“ schreiben möchte. Ich war zu dem Zeitpunkt gerade sehr gut drauf, hatte Lust auf das Schreiben und die Zeit bis April schien noch ewig lang. Doch dann kam es wie es kommen musste: Eine Mischung aus Prokrastination und Überraschungen, die in unserer dynamischen und komplexen Welt nun einmal passieren, führte dazu, dass die Zeit eng wurde. Ich hätte es ahnen können? „Fehler erlauben als Basis für Kreativität? Bitte nicht!“ weiterlesen

Allowing mistakes as a basis for creativity? Please don’t!

I felt very honored and pleased when I was asked if I might like to write a guest article for 2changeculture on the topic „Allowing mistakes as a basis for creativity“. I was in a good mood at the time, wanted to write and the time until April seemed to last forever. But then it came as it had to come: A mixture of procrastination and surprises, which happen in our dynamic and complex world, led to a tight time. I could have seen it coming. Sure, afterwards you’re always smarter. So was it a mistake to have accepted this guest contribution? Perhaps – and at the same time perhaps a somewhat different example for the topic: Because if I had not taken the liberty of making this „mistake“, I would not have accepted the guest contribution at that time, had I not had the pressure today to write these lines and would not have become creative…

Inventiveness

I’m not an expert on creativity. But I have picked up one or the other and in connection with my very own experience I have an opinion on it: First of all, I am convinced that everyone is creative. People can be creative in quite different ways: as artists, as footballers, as inventors, as politicians… And I am convinced that creativity can both be promoted and suppressed. These are highly complex interrelationships, so that cause and effect cannot be predicted in advance. Some people let their creativity wither away in the traditional school system oriented towards memorization and grading – others may discover their creativity in the rebellion against this system.

Allowing mistakes?

So should mistakes be allowed as a basis for creativity? That sounds logical at first: If mistakes are punished, nobody will try „creative solutions“. Or vice versa: If mistakes are allowed, then I can try everything without having to reckon with a penalty. So I can let my creativity run wild.

But is that what we want? I’m not a friend of self-interest. Creativity in itself is not an end in itself, nor are mistakes. It depends: If I want to travel by train from A to B, I have no interest in the train driver finding new creative ways or in the maintenance work being carried out in a particularly creative way. On the contrary: I want security, I don’t want mistakes. This is the case in situations where the challenges are as simple or complicated as possible.

It looks a little different when the proportion of dynamics and complexity increases: If I want to take a taxi from B to C, I do expect the taxi driver to find creative solutions to avoid a sudden traffic jam, for example. I also accept that the creative solution will fail, so we may end up in a second traffic jam.

Mistake versus misconception

 I am unsure whether I had first read or heard the distinction between mistake and misconception from Lars Vollmer, Niels Pfläging or someone else, but I find it very useful. To put it simply: mistakes are simple or complicated activities that are carried out incorrectly, so you can clearly describe in advance how to achieve the desired result. Misconception can therefore be avoided and thus also to be avoided! In dynamic/complex situations, in which you cannot describe in advance what exactly will happen if you do this or that, you proceed differently: First, assumptions and hypotheses are made and it is then checked whether the desired result has been achieved. If not, it is a mistake and one can learn from it by correcting the assumptions, hypotheses, one’s own actions or the desired results. Misconceptions cannot be avoided, on the contrary: Misconceptions are necessary in order to gain new insights in highly dynamic and complex situations, so they serve learning.

 

Innovation is the goal

In my view, it should therefore read „allow misconceptions as a basis for creativity“.

This would make a lot clearer: creativity makes sense and is important exactly when „new territory“ is entered, when pioneering work is done, when new challenges are tackled for which it is not (yet) possible to predict what will happen. In such cases it is unavoidable that creative solutions do not (immediately) lead to the desired result – but that is then no avoidable mistake but an error.

I’m not entirely satisfied yet. Is permission to be mistaken really a basis for creativity? I’m not sure that’s the crux of the matter. I have already stated that creativity is not an end in itself in my view – in fact creativity is a means to an end, i.e. a way to come to new approaches under high dynamics/complexity. And when innovative approaches are successful, i.e. lead to the desired result, one usually speaks of „innovation“. Shouldn’t it be „mistakes as a basis for innovation“?

Incidentally, in my view, this is the core of Lean Startup: an iterative, empirical approach to systematically produce successful innovations under uncertainty/dynamics/complexity. Setting up a model (forming hypotheses), deriving and conducting experiments for validation, measuring results, deriving findings, adapting the model,… etc. etc.

Creativity comes into being

Anyway – I would like to get rid of some thoughts about creativity to close the circle. As already mentioned above: Creativity is a highly complex and not always clear topic. Freedom can foster creativity: If I have no fear of punishment, if I make a „mistake“ (or make a „misconception“), I will probably become more courageous and have more creative solutions in mind. However, restriction is also a catalyst for creativity: without the limitation of the number of characters in an SMS (and later on Twitter) many abbreviations and emojis would probably not have been created in this way. In many sports, the fastest and strongest would simply win if there were no rules of the game that would open up creative solution spaces in the first place. And the more complicated the state tax system and, at the same time, the more complex the international possibilities, the more creative the solutions of tax and investment advisors.

upshot

In my view, therefore, it is not a question of allowing mistakes/misconceptions across the board in order to enable creativity for the sake of creativity – rather, it should be a matter of designing the appropriate framework conditions intelligently in order to enable innovations where they create benefits and avoid mistakes where they cause too much damage.

Heiko Bartlog

Hosts for innovation

Tomorrow I’ll decide

When I wake up tomorrow and expect to live to be 80 years old, I have 20,725 days left to live. I made it easy for myself and calculated without leap years. On the basis of this calculation, a 40 year old has 14,600 days to live, a 50 year old 10,950 days and so on. I find that when we transform years into days, we become much more aware of how short and precious our lifetime is. read more

Morgen entscheide ich

Wenn ich morgen aufwache und davon ausgehe 80 Jahren alt zu werden, bleiben mir noch 20.725 Tage Lebenszeit. Ich habe es mir einfach gemacht und ohne Schaltjahre gerechnet. Auf Basis dieser Rechnung hat ein 40 Jähriger noch 14.600 Tage zu Leben, eine 50 Jährige 10.950 Tage und so weiter. Ich finde, wenn wir Jahre in Tage umwandeln, wird viel bewusster wie kurz und kostbar unsere Lebenszeit ist. „Morgen entscheide ich“ weiterlesen