Playing the Risk Game
In our competitive information economy, the height of the goal usually determines the scope of the risk and the quality of the competition. Concurrently, the quantity of unknown variables increases the quantity of risks.
Yahoo Misplayed the Risk Game
Assessing the Big Tangible Picture means one must also go through a slew of what-if situations. In this case, Yahoo did not properly perform that objective before making a deal with Alibaba.
Before dotting the i's and crossing the t''s, the successful strategists frequently tested their view of the Big Tangible Picture (BTP) with various "what-if" situations. They studied the causes and the effects from the various PESTO influences before making any strategic decisions.
By focusing on the "non-obvious" relevant points that are embedded within the PESTO influences, the successful strategists are able to integrated them into one Big Tangible Picture. During the strategic assessment review, they also determined whether if the rewards can be reaped.
- The scope of any risk benefits is sometimes proportionally to the scope of the risk consequences.
- In an extreme competitive situation, the risk benefits are rarely greater than the risk consequences.
- Never pursue a risk where the impact of the consequences is greater than the impact of the rewards.