To what extent? Taking risks is necessary for business survival and growth

The taskforce is led by the City of London Corporation, the authority running the British capital’s financial district – Copyright AFP ISABEL INFANTES

Too many businesses tend to play it safe and this can be the cause of failure. The allure of the “safe” option in business is undeniable. Tried-and-tested strategies, familiar markets, and predictable routines offer a sense of security.

Yet there remains a place for innovation and courage. In a world defined by relentless change, playing it safe may not be the best option.

“The biggest risk a business can take isn’t a calculated leap – it’s choosing the path that seems safest,” Sam Eisenberg, CEO of Design For Decks tells Digital Journal.

Eisenberg discusses a trend that he refers to as “the illusion of safety”. By this, Eisenberg  means that complacency is a formidable enemy of progress. When businesses cling to the status quo, they often overlook these hidden dangers that come with sticking to the safe approach.

Examples include:

Missed Opportunities

While established players remain comfortable, disruptive startups reshape industries and seize new markets. Forbes revealed that 70 percent of the companies on the Fortune 1000 list from a decade ago have vanished through mergers, acquisitions, or bankruptcy.

Stagnation and Decline

Markets are dynamic ecosystems. Customer needs shift, competitor strategies evolve, and technologies advance. Failure to adapt leads to diminishing returns and eventual irrelevance.

Vulnerability to Disruption

A reluctance to innovate leaves businesses exposed to nimble competitors who introduce groundbreaking products or business models – like the way streaming services forever changed the movie rental market.

The Benefits of Embracing Calculated Risk

Taking smart, well-informed risks does not translate to reckless gambling. Instead, it involves:

Differentiation and Competitive Advantage

Embracing innovative products, untapped markets, or unique service models sets your business apart in a saturated landscape.

Fuelling Innovation and Growth

A willingness to experiment breeds progress and expansion. A study by McKinsey & Company indicates that businesses driving innovation often outpace their industry peers in growth.

Attracting and Retaining Talent

Top employees relish challenge and development. Cultivating a culture accepting of intelligent risks inspires motivation and fosters a spirit of entrepreneurship within your team.

Eisenberg recommends that responsible risk-taking is necessary.