A Case for taking more business risks – at grassroot level

Before discussing steps that minimize risks, these are the potential risk sources:

– Changes in regulations

– Product life cycle stage

– Litigation
– Macro-economic environment
– Industry prospects
– Cash flow timing
– Resource-depletion
– Supplier default
– Stakeholder relations
– Scale of investment and implications
– Project risk (the uncertainty inherent in the project’s cash flows)
– Corporate risks (impact on earnings)
– Market risk (impact of a project’s risk on a firm’s market coefficient)

If it weren’t for R&D (a pure exercise in risk-taking with a promise of huge paybacks); Steve Jobs wouldn’t have invented the MAC or the iPod (and the iPhone and iPad as a result of Apple’s previous two smash successes).

If pharmaceuticals didn’t risk billions of Dollars in getting new drugs to markets, millions would die. The same Risk/Reward requirement applies to inventions in automotive industry, sea expeditions and space explorations etc.