If I repeat myself on this blog it’s not because I’m becoming senile—at least not that I’m aware of. Rather, there are only so many good, or at least fashionable, ideas that traders and investors can incorporate into their mental game plan. Writers latch onto them, repeat them, and apply them to a range of disciplines. Doug Sundheim’s Taking Smart Risks: How Sharp Leaders Win When Stakes Are High (McGraw-Hill, 2013) is a case in point. The book shows how individual entrepreneurs and business leaders can use the idea of smart risk taking to enjoy sustained success.
Let’s look at a few of the ideas that I consider worth repeating yet again, however telegraphically.
You must identify what you’re willing to fight for, what makes you come alive. Otherwise, all the “how-to” advice in the world will be wasted on you.
Playing it safe (alternatively stated, staying in your comfort zone) is fraught with dangers: to wit, you don’t win, you don’t grow, you don’t create, you lose confidence, and you don’t feel alive. (p. 7)
Two figures illustrate the central thesis of the book. First, the paralysis perception.
And second, the power perception.
Of course, you have to move from thought to action. “Often, the amount of force needed to start something isn’t that big. … It doesn’t have to solve every problem. In fact, it doesn’t even have to be the right move. It just has to get things in motion. It just has to lead to another action. And then another. It’s easy to get so fixated on a big end goal that you discount the small efforts needed to start a process. You think they’ll barely make a dent in what you’re trying to do. However, it’s only through repeated small efforts that you ever make progress.” (p. 133)
Those repeated small efforts won’t all succeed. In fact, failure is essential to progress. In the words of a chapter title, “fail early, often, and smart.” What does it mean to fail smart? “One of the keys to failing smart is to keep things simple, picking a few key variables to experiment with and test before doing anything too big.” (p. 158)
Sundheim fleshes out these (and other more “corporate”) ideas with case studies and tools for action. He’s written a smart book.