The risk/reward confusion

Riskreward2
It's easy to to adopt the policy of avoiding risk at all costs, that whenever possible, the products you launch or the engagements you have should be flawless and without downside.

Here's the problem: in most endeavors, a small increase in risk can double the reward. It's the second doubling of reward that brings serious risk with it. But the first leap is relatively painless.

In the chart above, notice that going from point A to point B brings almost no incremental risk. It might feel scary, but

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Published on July 01, 2009 03:13
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