The Seven Risks That Can Sidetrack Your Career

Everyone seems to know—whether through careful analysis or just through intuition—that we live in risky times. It’s true on the global level (think terrorism, ethnic violence, climate change); it’s true on the personal level (bankruptcies, layoffs and outsourcing, social insecurity). And it’s certainly true on the company level, as revealed in the business headlines almost every day. In our new book The Upside, we explain the seven major kinds of strategic risk that every business needs to know about and prepare for: project risk (when your next big initiative fails); customer risk (when customers abandon you); transition risk (when unexpected changes in technology or business design undermine your company); unique competitor risk (when a Wal-Mart rides roughshod over your industry); brand risk (when your brand becomes irrelevant or unappealing); industry risk (when your industry becomes a no-profit zone); and stagnation risk (when growth grinds to a halt). These seven threats cover the gamut of risks that can destroy most companies’ business designs. This seven-part risk analysis is important for anyone in business to understand and apply. If you’re a manager, you owe it to yourself to ask: What are the big risks that can kill my business model tomorrow? But as we’ve talked with people in many walks of life about the new world of risk, we’ve realized there’s a second question you also need to ask: What are the big personal risks that can sidetrack or even ruin my career? In fact, we’ve discovered that the same kinds of risk that threaten businesses today apply to careers, too. Which means that everyone who works for a living needs to be thinking about how to prepare for those risks—and how to turn them into springboards to opportunity. Here are some examples. Project risk. What’s the biggest initiative you’re personally working on? It could be on the job (a super-important task force your boss has asked you to spearhead) or off the job (the applications to MBA programs you’ll be submitting next month). What are the true odds of success? (Research shows that, with most kinds of projects, they’re usually one third to one fourth as good as we believe.) What are the 10 to 20 moves you can make to raise those odds? Customer risk. Who are your key customers, inside and outside your organization? (Your boss is one. Others may include your boss’s boss, the clients you serve, the internal departments who rely upon you, and, of course, the individuals or the companies that buy the products or services you create.) What do they need or want? (Are you sure you understand their true priorities?) How are they changing? And are you changing to provide what your customers will be looking for tomorrow, and the day after that? Transition risk. When will your current job skills become obsolete? (If you’ve been out of school for five years or more, the answer is probably: Sooner than you think!) What are you doing to prepare for your next job—and perhaps your next career? How will you respond if new technologies or business models render your entire industry—or just your personal job category—obsolete? Unique competitor risk. Are you running into new kinds of career rivals who are beating you out for the best assignments, contracts, and jobs? It could be people with computer skills, freshly-minted young MBAs, managers with international experience you lack, people with better communications skills, or people with a more intuitive grasp of the changing market. If you can’t match their abilities in one area, look for a different way to compete by honing a unique set of skills you can use to create value for the companies you serve. Brand risk. Everybody’s got a personal brand—a reputation that’s known around the office and, probably, around the industry (especially in these days when news and gossip travel at Internet-speed). Is your personal brand getting stronger or weaker? What changes do you need to make in your product (i.e., the quality of the goods and services you deliver), your business design (the customers you serve and the methods you use), and your brand message (your personal image and business positioning) to protect and strengthen the power of your personal brand? Industry risk. Are you stuck in a career where the prospects for personal profit are minimal? Maybe your skills have become commoditized and you are viewed as a dime-a-dozen competitor. Or maybe your industry is one whose profit margins have dwindled—along with the opportunities for career advancement. Take a candid look at the future of your industry and decide whether now is the time to make a leap to a new arena. Stagnation risk. Have you stopped growing in your career—not just in terms of salary increases and promotions, but in terms of new learning, new skills, new responsibilities, new sense of accomplishment? Or can you see a time, a year or two down the road, when this kind of plateau is looming? It may be time to seek a new direction. Dust off your resume and look for the hidden assets you may have—interests and abilities you’ve neglected or ignored but that could be the key to reinventing your current role, or restarting your career in a whole new direction. The fact is that risk is fractal. Like many objects in nature, risk is "self-similar," with the same kind of shape no matter what scale you look at. Study a photograph of a shoreline and you’ll see the same kinds of curves and squiggles whether you’re looking at a satellite picture of the entire eastern seaboard, two miles along the shore of Cape Cod, or 200 yards of sand at the edge of Marconi Beach. In the same way, the risks companies face look a lot like the risks faced by individuals in their careers—or, for that matter, the risks faced by nations as they compete in global politics and economics. (How well has the United States been dealing with the transition risk it faces as national threats, like the former Soviet Union, give way to non-national threats, like al-Qaeda? Is the US well prepared to face the rising challenges posed by unique competitors like China and India? Has its national brand been rising or falling in value over the past decade?) By and large, we do a poor job at preparing for risk on the company level. But we do even worse at the extreme ends of the scale—at the personal and national levels. The result? Unnecessary surprises, damaging hits, and years that must be spent recovering lost value rather than creating new growth. You may not be able to do much about risk at the national level—or even, individually, about the risks your company faces. But you can do a lot to prepare for the risks that threaten your career. Why not get started today? ADRIAN J. SLYWOTZKY — cited by Industry Week as promising “to be what Peter Drucker was to much of the 20th century, the management guru against whom all others are measured”—is a director of Oliver Wyman. He is the author of the bestselling The Profit Zone (selected by BusinessWeek as one of the ten best books of 1998), Value Migration, and How to Grow When Markets Don’t. He has also been published in the Harvard Business Review and the Wall Street Journal and has been a featured speaker at the Davos World Economic Forum, the Microsoft CEO Summit, the Forbes CEO Forum, and the Fortune CEO Conference. Karl Weber is a freelance writer and editor who has collaborated with Adrian Slywotzky on several books and worked with such authors as former president Jimmy Carter, Loews Hotels CEO Jonathan Tisch, UN ambassador Richard Butler, and representative Richard Gephardt. See www.crownbusiness.com or www.mercermc.com for more info.