The behavior in the room was quite interesting.  By and large, every time that we would approach taking a final decision on a product line, people would step up to the point of decision, and then …. Stop.  We’d agree that the issue needs further discussion, more analysis or another meeting for the team to report back on what it found.

As a result, we wound up pretty much with a plan to stay the course… which is what lead us to the point where we needed a portfolio rationalization meeting in the first place.

Now, I’m sure that we will eventually get to the right decision for each of these product lines, and that a portion of this blog is fueled by my personal frustration at our inability to take a decision today.  But the macropoint still stands… more often than not, in business, people prefer not to take a definitive stand.  Why is that?  Because taking a stand means that you take a risk – and most people do not want to take a risk with their career.

When you make a definitive statement, you are by definition putting yourself out there.  If you declare a product line will realize $200M in revenues in 2011, and then the product line hits only $160M, well, the numbers don’t lie, and you’ll likely be “reassigned” or fired.  Conversely, if you choose to exit a market, and then your competitor reaps huge profit in that market, then everyone will turn to you, and say, “See, I told you we should have stayed in that market!” 

So what happens is that people frequently place a bet on every spot on the proverbial roulette wheel.  But in my book, there are two ways to lose your job (or go out of business).  The first is to make a bet on a specific market opportunity, and decline the rest.  If you bet right, you win big.  If you bet wrong, you lose big.  The second way to lose to your job is to not make a bet, or to make a small bet on every opportunity.  This way, you definitely won’t lose big, but you also will never win.  And if you never win, then you’ll eventually lose your job.  It just takes a little bit longer.

As for me, I’d much prefer option one … to make a bet and have an opportunity to win big.  Sure, I might lose, but at least I went down swinging.  Successful leaders take a stand, make a bet, and have the courage of their convictions to stand behind their bet.

I believe that “don’t make a bet” behavior in a large, public company where there is an existing run-rate business and there is no danger of the lights going off.  Why take a risk when you don’t have to?  Start-ups don’t suffer from this. Limited resources mean you have to make bets, because if you don’t bet, then you won’t ever win.  In a larger company, you have a long time for your lack of bets to catch up with you.  

The most successful large companies act like a well-funded start-up.  They use their run-rate businesses to keep the lights on, while they make selected, well-thought-out bets on a few market opportunities that have the potential to become the next run-rate business.  But the only way that a company gets to make these bets is for its leaders to have the courage of their convictions to take a calculated risk.