Beyond the Election: 6 Keys to Making Calculated Business Risks Your Competitive Advantage
With the election results tallied, the landscape for business is shifting with Donald Trump returning as the 47th President and a new Congress stepping in, ushering in significant political and economic changes. This transition brings both opportunities and uncertainties.
The most forward-thinking CEOs aren’t passively waiting for clarity; they’ve already assessed the potential impacts on their businesses and are strategically planning to Make BIG Happen in the new era.
Our latest blog post highlights 6 essential ways to embrace and prepare for risk, ensuring your company is equipped to navigate challenges and seize opportunities in the year ahead.
1. Shift Your Mindset
The Vendee Globe is a non-stop, single-handed, unassisted, around-the-world sailing race. Attempting this feat is dangerous enough. But when adventurer Pete Goss competed in the 1996/7 edition, he had to endure a hurricane and answer a life-or-death Mayday call from a fellow racer.
High-risk? Not according to Goss.
“I’m not a risk taker at all,” Goss said in a podcast with Paul Trammell. “That’s the last thing I am.”
And that’s because Pete treated his race the way that a good CEO treats their business. Pete and his team spent years making plans and contingency plans. They tested, measured, and analyzed every available piece of data. By the time Pete was floating at the starting line, he felt like 70% of his result was already baked in.
If you focus on what you can control as CEO and plan for a wide variety of outcomes, taking a risk will carry a lot less danger and give you the confidence to boldly move forward. You’ll also have the resources and backup plans you’ll need to make a pivot quickly and effectively.
2. Develop a Risk-Tolerant Culture
A C-suite that demonstrates comfort with reasonable risk and confidence in long-term strategy is going to inspire a culture of innovation. Use that culture to celebrate wins, but just as importantly, use it to free your people from a fear of failure. Teams that worry a test bullet missing its mark will lead to layoffs aren’t going to take the kinds of shots that lead to breakthroughs, new products and services, new customers, and most importantly, growth.
Remember, if Alexander Fleming had just thrown away the mold in his petri dish instead of putting it under a microscope, we wouldn’t have penicillin. Learn from failures, and move ahead quickly away from dead ends towards opportunities. Your risk tolerance will keep your company nimble and give your employees more agency over how they do their work and what that work means to them.
3. Leverage Data to Make Informed Decisions
Your AI Roadmap for 2025 should be a top priority on your annual planning agenda. If you aren’t currently using AI to maximize your data collection and analysis, you’re almost certainly lagging behind your top competitors.
Don’t wait any longer to hire a Chief AI Officer and the support staff you need to catch up. Taking a risk will feel a lot less, well, risky if the available data and expert human analysis is all pointing in the same direction.
And if you have built out your AI infrastructure over the past year, ask yourself:
- What are your upgrade plans for the year ahead?
- What has your data been telling you about your customers, your marketing initiatives, your inventory, your supply chain?
- Has your AI team identified any gaps in your data that you need to get smarter about collecting?
- Has your collection and analysis created any bottlenecks in high-level decision-making? How are you going to avoid analysis paralysis?
4. Assess the Opportunity Cost of Not Taking Risks
Standing still often looks like the most cost-effective option.
Until it isn’t.
Until that long-term employee you’re afraid to let go says the wrong thing to the wrong intern and causes an HR crisis that spills onto social media.
Until the steady sales on your top product start to flatline.
Until the startup nipping at your heels takes such a BIG bite that you can’t afford to acquire the company anymore.
Until the BIG customer that keeps you in the black jumps ship, or the supplier you rely on passes the costs of inflation to you.
Performing a cost-benefit analysis that doesn’t include the cost of stagnation is like doing math with a broken calculator. If you don’t feel like you have the tools you need to give a risk its proper place on your balance sheet, then reassess your team and your data collection before you decide inaction is the best action.
5. Build Incremental Risk into Your Strategy
A person who wants to get over their fear of heights probably won’t fly to Dubai and march up to the Burj Khalifa observation deck.
Instead, you start small: hiking a bluff, riding a Ferris wheel, cocktail hour on a hotel’s rooftop bar.
And then, maybe, you work yourself up to something BIGGER.
Jittery CEOs can learn to embrace risk the same way.
Don’t rewrite your entire product catalog — add a page with a few new offerings, or some customization options.
Don’t break ground in a new market — send a small sales team through town to gauge potential customer interest.
Some of these smaller risks will pay off. Some of them won’t. But each chance you take will build up your “risk-taking muscle” so that when you’re faced with a truly BIG decision, you’ll have the tolerance and the discipline to weigh your options and make the best choice for the company.
6. Accept and Navigate Ambiguity
CEOs rarely have all the answers they need, especially when there are so many questions standing between the present and the future. But those ambiguous moments in every company’s journey are often when bold, decisive leadership is the most important.
If your data and and your gut aren’t tipping the scales, try to align the risk you’re contemplating with your company’s core values. A risk that will allow you to advance your mission and create more value for your stakeholders is probably a risk worth taking, even if it feels a little scary. A risk that runs contrary to your values and mission is a long-term loser, even if it boosts your bottom line right now (never compromise your values!).
And if your vision for your company can’t light your way through the fog, start working with a CEO coach who can help you build your confidence and sharpen your decision-making skills. Because no matter who’s president or what 2025 has in store for us, CEOs will need to accept uncertainty, take smart risks, and plot a clear path forward in order to Make BIG Happen.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average EBITDA CAGR of 53.5% during their time as a client, more than three times the U.S. average, and a revenue CAGR of 26.2%, nearly twice the U.S. average.
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