Guest Post

Calculated Nerve

by Dr. Bruce Ellis, MBA, Ph.D.
11/11/2009

Perhaps the greatest obstacle to successful corporate leadership is the fear of failure. Another way of saying that is "loss of nerve." Here's why:

Companies grow by taking calculated risks. An organization that hopes to be profitable by doing just what every competitor in the marketplace is doing can only thrive for a limited time — until a new technology comes on the scene, a new product or service comes along, or a leader with "nerve" takes a risk that results in success on a previously unexplored front.

A former client of mine, the CEO of a Fortune 100 company, recounted to me an anecdote that illustrates the risk, or nerve, principle. One of his lieutenants, a bright young MBA who ran a Strategic Business Unit with revenues of $260 million, invested in an advertising campaign that bombed and cost the corporation $10 million.

"Everyone, including the manager himself, thought he would get axed," my client recalled. "I promoted him. Why? To drive home the lesson that failure isn't forbidden — it's essential in a competitive marketplace. If you're not experiencing failures, you aren't fully exploring the opportunities."

Notice the qualifier, though — success comes from taking calculated risks. This is where the discipline of strategic planning comes in. Some risks are higher-quality than others, and the key to determining which are most likely to succeed lies in the alignment of strategy to resources.

At Ellis Strategy Group, we are committed to the principle that "Managing right in hard times is opening doors to the future," and that is our standard of client service.

Dr. Bruce Ellis, MBA, Ph.D., is a senior strategy advisor and business development executive at Ellis Strategy Group and the co-author of "Strategic Planning: High-Impact Solutions."

  1. Right on the mark. Fear is a huge motivator – but we can’t let it parlyze us. The title, “Calculated Nerve”, caught my attention. We talk about hitting the “Strategic Nerve”, a term coined by ex-McKinsey consultant Steve Hindman, as one way of achieving “Breakout Growth”. Although it’s in the domain of sales vs. strategic planning it sounds like the “nerve” fundamentals are similar.

    Comment by Tony Rushin — 11/18/2009 @ 7:08 AM

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