When you are starting a business or making a change internally as a business leader, many on the outside will repeatedly remind you how risky your choice is.

There are countless motivational books and quotes within them that reassure you it is because the doubting individual doesn’t want to see you fail, while others may be hoping you will fail out of jealousy of your bravery. They paint a picture of safety by staying the course in their lives, and by all means, they will protect and defend it to the very end.

But looking back on businesses from days and decades ago, historically, some of the biggest corporate and consumer catastrophes have been because a leader or organization refused to embrace change, get in front of disruption, or take a calculated risk, for a plethora of reasons.

But from their disasters, we can learn and appreciate the importance and necessity of taking risks in business, and likewise, understand how my Anticipatory Organization® Model allows you to do even better than calculate risk. It lets you more accurately predict what’s to come to stay ahead of disruption caused by stagnation!

For the sake of better understanding how risky “low-risk,” agile mindsets can be, let’s observe two organizations that chose to stand when the disruptive dealer was showing a high card.

Yahoo!

It always surprises me how few know the story of Yahoo’s dramatic collapse and how their lack of calculated risk-taking largely mirrored the likes of Blockbuster Video.

Following the dot-com boom and bubble burst of the late nineties, search engines were nowhere near as user-friendly as Google is today. As a matter of fact, a good portion of their functionality and income was rooted in online advertising and producing eye-catching content, much like the blogs of today.

As Google became a powerful force in both advertising and search, Yahoo failed to develop their search functions to evolve with customer needs, further doubling down on solely being a media and content website with a small search feature. But this is only part of the snafu.

Yahoo actually had the opportunity to buy Google in the early years of the new millennium, which they refused to do because they believed the risk was too great. Painfully, a few years later, they were nearing a deal to buy Facebook, of all companies, but botched the transaction by undercutting Mark Zuckerberg too much.

How many of you were holding a winning lottery ticket twice in your life before deciding each time that driving your car to go cash it in was far too risky? I can tell you that Blockbuster Video sleeping several times on buying Netflix can certainly relate.

Tie Rack’s Risk Aversion

This one is almost too simple to be such a catastrophic disruption of a company’s status quo. The chain store Tie Rack specialized in formal wear accessories, such as ties and cufflinks.

With much success early on, the team at Tie Rack largely assumed they would never have to take a risk outside of their realm. However, their big folly came from ignoring obvious Hard Trends in their industry: Their sales were declining due to men purchasing ties only when purchasing dress shirts. A simple fix, right?

Well, instead of leveraging this trend to their advantage and incorporating dress shirts into their stock, they chose to play it safe and stick to what they knew best: accessories. Eventually, their failing brand was bought by a bigger company, and that found much more success in the men’s formal wear industry.

The Missing Competency

Both of these aforementioned business blunders were not only completely predictable, the ignored risk involved in each could be fully calculated by way of an Anticipatory mindset. Here’s how:

Tie Rack – their consumers told them through declining sales that they were finding their ties elsewhere, despite their phenomenal products and wide variety. You don’t get much more of a hint than that!

Yahoo may be a little different, but as mentioned when comparing it to Blockbuster Video, its mistake has happened more than once. You are presented with an opportunity and have all the evidence through Hard Trends that opportunity is the right decision, yet your protect and defend mindset is just too powerful, so you sleep on what eventually takes you out.

Anticipation is the missing competency in these examples and making decisions based on future certainties is a low-risk endeavor. Had they implemented my Hard Trend Methodology and looked to those future certainties in their business decisions, perhaps there would have been a different result.