November 2010

Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30        


MBM Principal Sources

Blog powered by Typepad

« Friday Links | Main | Customer Focus »

17 May 2010



I think risk-taking mentality is about acquiring and applying the appropriate mental models around risk. For example, as employees, most of us put too much weight on downsides than upsides - we're more worried about losing than winning, so we are typically risk-averse, which is costly to the organization.

There are other areas of business life where we may be willing to take more of a risk than the overall organization would tolerate - for example, we might be willing to risk our personal safety walking across an ice patch rather than around it to get to our car in the company parking lot, trusting our reflexes, in order to save time. Or we -- as individuals -- might be willing to click the "Accept Terms and Conditions" button when downloading "freeware" to our PC. These are compliance risks that the broader organization is not willing to take -- at all.

So to me, a risk-taking mentality is aligning your risk profile with the broader organizations.


Long-time reader, first-time commenter...

I'm inclined toward an approach that emphasizes the relationship between entrepreneurship and institutions. Entrepreneurship is omnipresent. We all can be, and are, alert to profit opportunities. The question is whether or not that entrepreneurship is productive or unproductive.

Further, I think there's a terminology problem. I'm not terribly fond on the term "intrapreneurship" but I do think we need to distinguish between entrepreneurship in the market and entrepreneurship in the firm. An employee can engage in entrepreneurship that is not productive for the firm. That is, I can create value for myself while not creating value for the firm.

I think the literature on institutions is instructive here. The consensus seems to be that private property, rule of law, trust, and other informal and formal institutions provide the framework for productive entrepreneurship. Likewise, the equivalent of those institutions, within in the firm, seem likely to help insure that individual entrepreneurial behavior also creates value for the firm.

In my opinion, a big part of the value added by MBM stems from the fact that it attempts to bring these institutions (or their rough equivalents) into the firm.

P.S. Really enjoying the added blogging here. Keep up the good work!

The comments to this entry are closed.