One of the hallmarks of being a great Fractional COO is to be at the forefront of looking out for your clients. Looking at the current status of operations is one thing; you need to look ahead and be able to predict and guide the company towards their long-term goals. Sometimes that is growth and sometimes, that could be an exit sale for the owner. Either way, you need to lead from the front. Identifying and managing risk is a large part of that responsibility.

When you fail to take risks into consideration in business, you can miss opportunities for growth and innovation. You may also be more vulnerable to unexpected events that can damage your business.

Here are some specific consequences of failing to take risk into consideration in business:

• You may fall behind your competitors. In a fast-paced business world, companies that are willing to take risks are often the ones that are most successful. If you are not willing to take risks, your competitors may be able to outpace you and take over your market share. And when you fall behind, market share usually follows the downward slope.

• You may miss new opportunities. New business opportunities often involve some level of risk. For example, expanding into a new market or launching a new product can be risky, but it can also be extremely rewarding. If you are not willing to take risks, you may miss these opportunities for growth. Understand the cost and financially model how you can get there.

• You may be more vulnerable to unexpected events. Even the most well-managed businesses face unexpected events, such as economic downturns, natural disasters, or changes in government regulations. If you have not taken steps to mitigate these risks, they can have a devastating impact on your business. As a fractional, that is your job!

Here are some examples of businesses that have failed to take risk into consideration:

• Blockbuster. Blockbuster was once the dominant player in the video rental industry. However, the company failed to adapt to the rise of streaming services, such as Netflix. As a result, Blockbuster filed for bankruptcy in 2010.

• Kodak. Kodak was once the leading manufacturer of film and cameras. However, the company failed to adapt to the rise of digital photography. As a result, Kodak filed for bankruptcy in 2012.

• Nokia. Nokia was once the world's largest mobile phone manufacturer. However, the company failed to adapt to the rise of smartphones, such as the iPhone. As a result, Nokia's market share plummeted.

• Bed Bath & Beyond. Once a staple of the dorm and home decorator, BB&B forgot what their founders did to get them there and proposed a radical change to their products and store design with devastating results. Their liquidation in 2023 is a classic case of not looking at the risk of their decisions and planning ahead.

It is important to note that taking risks does not guarantee success. However, it is essential for businesses to be willing to take some risks in order to grow and innovate. Businesses should carefully consider the potential risks and rewards of any decision before making a move but should not be afraid to take risks when the potential rewards are significant.

Here are some tips for taking risks in business wisely:

• Identify and assess the risks. Before taking any risk, it is important to carefully identify and assess all of the potential risks and rewards. This will help you to make an informed decision about whether or not to proceed.

• Develop a risk management plan. Once you have identified and assessed the risks, you should develop a plan to mitigate those risks. This plan should include steps that you will take to reduce the likelihood of the risks occurring, as well as steps that you will take to minimize the damage if a risk does occur.

• Be prepared to fail. Even if you take all of the necessary steps to mitigate risk, there is always a chance that things will not go as planned. It is important to be prepared for failure and to have a plan for how you will respond if things do go wrong.

By taking risks wisely, businesses can increase their chances of success and growth.