43. The Game of 21
1. BLUF
Strategy involves making decisions in the face of uncertainty.
Opportunity & risk are two sides of the same coin.
Here are four ways to respond to, or control, your risks.
2. The Game of 21
When playing cards, the game of 21 is a house favorite.
The dealer hands each player two cards with the goal of getting as close to 21 as possible without going over. One card is faceup, the other face-down.
You can see both of your cards but only one of your opponent’s.
Unless you’re a Jedi master at card counting, there is an element of uncertainty.
Your opponent’s face card is a 6.
You have a Jack and a 5 – for a total of 15 – do you hit or hold?
If you take another card, there’s a chance you’ll exceed 21 and bust.
But if you hold and your opponent’s card is a 10 – then she has 16 and you lose.
What do you do?
3. The Realm of Uncertainty
Strategy, like the game of 21, involves making decisions in the face of uncertainty.
It’s defining what you will and won’t do, testing hypotheses, prioritizing, following through, and correcting course, as needed.
Uncertainty brings risk. After all, “No risk. No return.”
As small businesses scale and grow, one thing remains constant: Change. From infrastructure to processes, people, systems, and more.
Having a clear risk picture and proactively managing risks across changes is key. Risky Business, a previous article, explored a 5-step risk management process.
Today, we’ll focus on number 4: Control. There are four ways to respond to or control risk. We can mitigate, transfer, avoid, or accept.
Consider these examples through the lens of a lemonade stand.
Supply chain: You source lemons from Italy and secure an alternate local supplier to mitigate losses from supply chain disruptions.
Cybersecurity: After your systems are hacked, you purchase cyber insurance to transfer risks of a future incident.
Merger: Your competitor across the street wants to merge, but you have seen questionable business practices and say no to avoid reputational risk, among other challenges.
Technology: Generative AI is the rage. You accept the potential risks of the new technology, focusing instead on its benefits, and incorporate it into your content marketing strategy.
4. Application
So, what does it look like for your business?
Are you identifying and assessing potential risks?
How are you responding to, or controlling, them?
What is one thing you can do today to drive greater clarity?
To your success,
~Susan
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