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The other day, Hartmut Esslinger’s book “A fine line” finally dropped in my mailbox. Its green cover with subtle Wega inspired dots instantly makes you want to break open the book and eagerly rush through the pages. I will not review his book yet, as I still have a few chapters to finish, except to say, it is a refreshingly personal and frank book, with many thoughtful ideas.
One underlying theme that runs through the book, has particularly caught my curiosity and that is the element of risk.
Now, we all know that setting up a business, involves an element of risk, which in return tends to generate profit.
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However, today, many large organisations have come develop an excessive risk averseness, as financial markets and internal company politics generally favours little change and low risk.
Innovation is vital for business growth, but inherently involves risk.
“Business needs creativity like humans need oxygen…”
(Hartmut Esslinger – “A fine line”)
Given the reluctance to embrace risk, large organisations have come to develop a toxic climate for innovation.
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With little corporate innovation, very little organic growth is achieved. Investors have to rely on other sources of growth, such as acquisitions, process improvement, rebranding etc.
Although, it does have significant impact on business results to increase profitability on past innovations, a company that does not also invest in innovation, will soon dilute the long term value of the company. This should cause great concerns to investors and be reflected in market prices, but on the contrary, such action is usually praised by the market.
Looking towards the future, how will we view the real meaning of risk? Its a complex topic, with many aspects to consider. I welcome thoughts and ideas form anyone who embraces or avoids risk your daily life.
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