We’re all familiar with Albert Einstein’s definition of insanity: “Insanity is doing the same thing over and over again and expecting different results.” Yet, many companies continue to rely on the same old sales and marketing strategies that reap the same rewards. You don't become a market leader by maintaining status quo; you do it by taking risks.
Remember when Red Bull teamed up with Australian daredevil Felix Baumgartner to sponsor his record-breaking free fall from space last year? It was anything but a same-old, same-old marketing strategy. Some people questioned Baumgartner’s sanity, but for Red Bull, the decision to sponsor was brilliant. The public attention the stunt garnered was, well, stratospheric: The mission highlights video alone has earned more than 35 million views on YouTube. But it was also one heck of a risk for the energy drink company, considering what the fallout might have been had Baumgartner’s jump been unsuccessful.
The risk-taking sweet spot for most of us lies somewhere between status quo and death-defying. But if you’re not taking some risks, then you’re not innovating, and your organization will always be mediocre at best.
The status quo is dangerous ground for any business. Our customers’ needs and expectations continually evolve as their customers’ needs and expectations change. Risk-averse companies, even those that once dominated their industries, don’t get to rest on their laurels for very long before competitors start whizzing past, waving goodbye like Netflix to Blockbuster.
The Road to Market Leadership Is Paved with Great Marketing Leaders
Forty-three percent of marketing executives think their companies aren’t taking enough creative risks, according to The Creative Group. Only 4 percent say they’re taking too many. This offers a huge competitive advantage for market leaders who not only embrace risk taking, but also encourage their teams to do the same.
Of course, there’s a distinction between a company that’s a market leader and the people within that company who are marketing leaders. But the same risk-taking rules apply.
Here’s how to take smart risks and foster a culture of innovation:
Change Your Mindset
Across any industry, market, or even company, there’s almost always a better way to do something. But without years of data to support a new idea, it can feel risky.
I tend to see strategic changes as challenges, not risks — especially since not growing is often the riskiest option of all. For example, when I took over Silverpop’s sales force, it was clear we needed a system in place to hold everyone accountable to expectations and upgrade our talent in some areas. Of course, no system is perfect, and we knew that our efforts might mean we’d lose a few people who had the potential to do better, but not upgrading our talent was much riskier for long-term success.
These changes made team leaders uncomfortable. After all, “C” performers were at least bringing in some revenue, so it was hard to let go of that stability. To refine our team’s mindset, I kept articulating our new vision of holding people accountable. It took about nine months for the new structure to start paying off but, ultimately, it paid big — 2013 has been a great year. And now that team leaders understand the value of this strategy, they’ll handle poor performance much more quickly in the future.
Be Prepared for Plan B
No executive or company makes the right decisions all the time. But because of the amount of data technology now enables us to collect, leaders can make more informed decisions before taking risks, especially when it comes to marketing. They can also quickly determine whether certain risks are panning out.
Successful risk takers act on the information they have, while also planning for failure. When failure looms, they quickly recognize poor decisions and alter their trajectory.
Having a system in place to monitor your marketplace in real time, collect and analyze feedback, and alert you when you need to shift your approach or opt for Plan B, is critical.
Create a Culture of Risk Taking
When leaders are the only people in an organization taking risks, not only do you have less great ideas to choose from, but you also risk losing your reputation as an innovative company when those leaders leave. Consider Apple’s declining market share since the death of its visionary leader, Steve Jobs. The company, which was ranked No. 5 on the Forbes list of the most innovative companies in 2011, fell to No. 79 this year.
Good leaders promote innovation by empowering their generals to make calculated decisions and to adjust strategies when they don’t work — without fear of being fired if they fail. For example, when Jim Donald, CEO of Extended Stay America, took over after the company’s recent bankruptcy, he issued thousands of “Get Out of Jail, Free” cards to staff members. They could take any risk on behalf of the company and never have to explain themselves. One such risk brought in $250,000.
When you encourage your people to bring new ideas to the table and trust them to take managed risks, you end up with a team of innovators focused on growing the organization.
So, are you willing to tap into your inner mad genius and take the risks that will propel your organization to the next level? Let me know what you’re thinking on Twitter.
1) White Paper: “7 Key Marketing Trends for 2014 – and Tactics for Thriving in the New Year”
2) Blog: “If It Ain’t Broke … Fix It Anyway”
3) Blog: “3 Pieces of Advice for Growing a Company”