“No Risk, No Reward!” “No Guts, No Glory!” Pragmatism Is the Key
These are proverbs that attempt to teach us what it takes to reach success. The conclusions they inspire may appear to be even more relevant since we know that, to succeed, we need to compete, and we all know that in any competition, with sports a perfect example, risk taking is an important element in outperforming your competitors. A similar proverb that emphasizes the same concept and is worded more appropriately for business is “nothing ventured, nothing gained.” All these proverbs are true to a large extent in business, but a word of caution here. Although the proverbs impart valuable wisdom, like most proverbs, they are also laden with potential misapplications.
The most obvious potential fallacy of this proverb is simple. Even if it were always true, which it is not, it does not say that if one takes risks, one is guaranteed success. Again, the “necessary, but not sufficient” phenomenon. I have seen many times over the years, both in business and life situations, where this proverb gets abused. It is important to recognize that not all risks are the same. Some risks don’t make much sense to undertake; others are perfectly okay to forgo, even if the “glory” might therefore not follow.
Clearly, taking risks may have its rewards, but the key is to understand the probability of success and the potential cost of failure. How to deal with risk and when to take a risk are important subjects and deserve in-depth assessment. The best results are achieved when you have an accurate assessment, which stems from good and sufficient data and analyses, combined with a strong dose of pragmatism. Pragmatism here is the most critical element. A personal example comes to mind that illustrates how pragmatism was not applied well.
I was asked by an acquaintance who didn’t know much about the business world to meet with a young woman, a friend of hers who was seeking some advice. Her friend was ready to make a career change and hoped to become a consultant with one of the four top strategic consulting firms. These consulting firms had a reputation for hiring only the best talent and consequently paying exceptionally high salaries. She was ready to quit her job and pursue this new direction and career.
As I have related, I joined one of these firms, Booz Allen, after graduating from the Wharton School of Business with an MBA. I had left the firm about three years earlier, after a reasonably long career there. My acquaintance knew that I had worked for Booz Allen and thought that I could offer her friend good advice on how to get a job offer and succeed as a professional at the firm.
Her friend told me she was working for a small family company that had about thirty employees. She completed two years of college and was hired as a secretary to the owner ten years earlier when the company had just started operations. In the subsequent five years, the company grew, and as new employees were hired, she was assigned the added responsibility of dealing with the human resources aspects of the business. After two years in this role, she was promoted to vice president of HR and received a nice salary bump.
At this point the son of the owner of the company took over the day-to-day operations. She didn’t think he was all that smart and hated working for him. She wanted to leave the company and after some research found out that the premier consulting firms, like Booz Allen, paid substantially higher salaries to professionals who consulted clients on human resources issues. She believed she had learned, as she stated it to me, “everything there is to know about human resources” as she was the only person in the company who performed those duties. She was hoping that I could give her more details about working at Booz Allen and how to do well there after she was hired.
At this point, and for the purpose of this example, I would just say that practically every student from the top MBA schools would have loved to work for any of the premier strategic consulting firms, but getting a job offer was exceptionally difficult. These firms indeed paid extraordinarily high salaries; however, they hire nothing but those whom they consider to be “the best of the best,” and mostly from the top MBA business schools. I knew that the woman who sat in front of me, who believed that experience in a thirty-employee company made her an expert, had quite a distorted view of what real expertise in the field of human resources entailed. Worse yet, she would have no chance of being hired as a consultant with a premier consulting firm, especially without an advanced degree.
I asked her whether she had already given termination of employment notice to her current company. She answered that she hadn’t. I then decided to give her the best advice she would benefit from. I told her that she had done very well for herself, so far. I then gently proceeded to tell her that landing a job with any of the premier consulting firms would be exceptionally difficult. I explained to her that the expertise in human resources required to consult large corporations, like those serviced by these firms, is much different and much more complicated than the expertise one might gain from working in a small thirty-employee company. I knew that she was fortunate to have been promoted to her position, but it would be unusual to have a vice president title anywhere else without a full college degree, and probably not even the title of a manager. I encouraged her to stay at her current job if it was at all possible. I told her, “You are not likely to find a better salary or a vice president title with any other company. In fact, you may not even be able to replace what you currently have.”
I received a very angry call the following day from my acquaintance who had set up the meeting with this woman. She was angry because her friend left the meeting with me quite upset with what I had told her. I asked her why her friend was upset. After all, I gave her the best advice anybody could have given her. Her response was illuminating. She said, “When somebody wants to take a risk and try for something better, you are supposed to be supportive and encouraging, not negative and discouraging.” I replied, “But you wanted me to give her good advice, and that’s exactly what I did. It would be the worst decision if she indeed followed through with her plan and left her current job. She will not likely even find a new job to replace what she had, let alone find something better.”
My acquaintance didn’t buy that and said that it is more important to be supportive under such circumstances than to “kill and destroy a person’s dream.” I come from a different culture and upbringing. I come from a culture where if you ask for advice you get advice, not encouragement and sympathy.
About two years later, I had an opportunity to talk to my acquaintance and asked about this person. She told me that she left her job, as she had planned to do, not long after she and I had met. She still had not found employment. As I stated, “no risk, no reward,” but one must be very pragmatic in assessing the probability of success before undertaking any undue risk.
Back to the topic at hand. I would expand on the proverb “no risk, no reward,” but reword it and offer five separate observations to help with better assessing its appropriateness:
•Most successful people have taken risks and experienced failures.
•Some risk taking is wise, some is not. Carefully analyze risks and rewards so as to avoid unwise risks.
•Unwise risks are the risks such that the cost of failure has consequences you are unwilling to take or whose potential outcomes you would rather not encounter.
•One must obtain accurate and complete information, and be exceptionally pragmatic, to help avoid unwise risks.
•Never avoid risks because of the fear of failure and how people might view it. Remember, “no risk, no reward”; “no guts, no glory.”
I wish to make a separate observation regarding the last point. I have seen some people who fear failure so much that they would rather not take any risk to avoid feeling humiliated should they fail. It is for those people that I bring the following observation. Follow my expanded definition of the wisdom of taking risks, and never fear failure. I’ll share with you an observation I made over the years, which I believe to be universally true: People rarely look down at trying and failing; we are the ones who assume they do!