Courage vs Risk Tolerance

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I recently received a survey from Entrepreneurs Organization, asking me to indicate my level of agreement (from Strongly Disagree to Strongly Agree) with a number of statements about courage in business:

Courage is taking meaningful action deliberately after careful consideration of the risk involved.

Courage involves taking an action that is for the greater good, despite short-term adverse consequences.

Courage is the ability to seize opportunities, even when fearful of the future.

None of these statements quite nailed it for me. To me, courage is the strength one needs to make a moral decision in the face of adversity. I tell my children that courage is doing the right thing even when it scares you.

Investing in new products or services is risky, but not courageous. Expanding a sales and marketing team is risky but not courageous. Modifying pricing that seems to work just fine as-is is risky but not courageous. In business, we do lots of things to increase the prospect for greater future gain by sacrificing the certainty of significant near term stability. This is the essence of risk.

Courageous business actions include things that a leader deems to be the morally right thing to do, but that could jeopardize near- or long-term profits. Some actions that strike me as courageous:

  • Speaking openly about your values in the hopes of positively influencing your customers and employees, despite the risk of alienating those who don’t agree with you.
  • Trusting employees to do the right thing, knowing that that means some will occasionally abuse that trust or make mistakes.
  • Telling your employees, when you really need them to focus on executing, that you only have a few months of cash left.
  • Refusing to work with a customer or partner that could bring you game-changing income but requires that you compromise your values.

What are some of the most courageous business actions that you’ve come across?

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