If the Shoe Fits: Evaluating Risk
by Miki SaxonA Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here
I confess; I don’t do Facebook or Twitter, but I do watch TV at night when I’m doing stuff that doesn’t require full focus.
I watch enough to detest the lack of creativity in most ads, but I save my greatest antipathy for the drug ads.
Mostly because the images are in such opposition to the warnings.
Cymbalta (anti-depressant) is a great example.
It is being sold as a pain reliever for people with arthritis and uses the tag line, “Imagine you with less pain.”
All I can think when they say that is, “Imagine you with all the side effects.”
The ads focus on best case analysis and only list possible side-effects because the law forces them to.
There is no real risk analysis; the good outcomes are used as cover for the downside.
This works because most of us prefer to focus on the positive.
In a 2008 column about entrepreneurs and risk Bill Buxton said, “The most dangerous way of all to play it is so-called safe. Safe leads to atrophy and certain death—of spirit, culture, and enterprise. There is not a single institution of merit or worthy of respect in our society that was not created out of risk. Risk is not only not to be avoided, it is to be embraced—for survival.”
That hasn’t changed, but there is smart risk and there is dumb risk and you need to know the difference sans dogmatic belief in your vision and rationalization.
The best way to evaluate risk, whether of a drug, promotion, romantic offer, etc., is to give equal thought to three things.
- Best case: what positives do I expect from this action? (no pain)
- Worst case: what negatives do I need to consider? (side effects)
- If the results of number 2 can be handled go forward; if not revise the action.
The problem is not risk; risk is good, as well as necessary, for you or any entity that wants to move forward.
But ‘good’ requires balanced evaluation of the best and the worst.
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Flickr image credit: HikingArtist