When, in 1994, Jeff Bezos was given the assignment at his job on Wall Street to analyze a new medium called the “World Wide Web” he made an amazing discovery: The nascent technology was growing at an astonishing rate of 2,600% a year.
Bezos then made a series of decisions that, while seemingly risky, were actually savvy, prudent, and fiscally responsible.
The first was to leave his job, move to Seattle in order to be closer to tech talent, and launch the first ever e-commerce store, Amazon.com. But even that was a smart risk given the explosion of Internet and the lack of competition at the time.
The next move was another shrewd “risk”: Amazon would focus initially on the selling of books. Bezos made that decision, not because he loved books per se, but because, after a careful analysis, he concluded that books would be the easiest thing to sell over the Internet. Not only could he create online what would be “Earth’s Biggest Bookstore” and thereby give his new company a unique selling proposition, but book publishers had distribution centers throughout the United States thereby making shipping much easier and less costly.
This then became the model, as it is for any growth-oriented business: Take a prudent risk and manage finances in such a way that it sets the foundation for even more growth, despite what unknown obstacles may arise. In the case of Amazon, the company consistently reinvested profits into diversifying its product offerings (thus not becoming dependent on any other singe profit center) and expanding its infrastructure.
The result? Well, you know the result.
Prudent Risk Taking is Essential
The moral of the story should be clear: While risk-taking is part-and-parcel of the game of business (and indeed, for some, the fun and the juice of it), savvy businesspeople know that the best risks are not wild and crazy ones, but thoughtful, calculated ones. Those are the types of risks that can create a solid financial foundation and set a company up for whatever challenges lay ahead.
This is why I love partnering with SAP Concur, because it not only gets that, it makes a suite of tools that allow businesses of all sizes to make those sorts of smart decisions.. (And, personally, as a cheerleader for small to midsize businesses, there are few things I like more than when I find a company that makes powerful tools specifically designed to help us succeed and grow.)
How does SAP Concur do that?
Let’s take their client and partner Cirque du Soleil as an example. If ever there was a company that was both a risk-taker (literally and figuratively!) and one that needed to manage travel expenses, it was Cirque du Soleil. The company’s employees
• Took more than 6,000 trips a year
• Which consisted of 30 to 40 flights a day, and
• Thousands of rooms a month
So to better manage these sorts of expenses the live entertainment leader turned to SAP Concur. Prior to that, Cirque du Soleil used outdated manual processes to manage its travel expenses. By adopting SAP Concur’s automated expense management system, Cirque du Soleil was far better able to manage its global workforce’s travel expenses and analyze and use the data.
The Need to be Adaptable
And that’s the thing – whether it is a global business like Cirque du Soleil, or other SAP Concur clients like the popular Silicon Valley shoe company Allbirds – one constant is change. The economy surges, and then hits a recession. Demand and profits soar and then level out. Trends come and go.
So, the question is not whether change is going to come to your business, it is. Rather, the question is, how will you manage it when that inevitable change shows up? Will you be able to take advantage of the new reality and take a smart, calculated risk that just might make the difference, or will you be bogged down in old thinking, antiquated systems, and inertia due to a lack of foresight and/or innovation?
Even the best plans – financial and otherwise – need to be pliable, adaptable. And the way to do that, to be ready and able to make that move when change tees it up, is to get ready now. The best finance leaders are the ones who know that the moves they make today create the future of their businesses.
What does that mean for you?
It means thinking ahead. It means planning for the worst and preparing for the best. It means finding and using innovative technology and tools that can be leveraged to make smarter, data-driven decisions.
It the book The Scottish Himalayan Expedition, author W.H. Murray paraphrases Goethe’s when he writes: “Be bold, for boldness has genius, magic, and power in it.”
Yes, boldness is indeed fun and exciting.
But do you know what?
Boldness is even better when you have teammates and tools that allow you to mitigate the worst risks inherent in boldness and move forward, assured that you are prepared and ready, knowing that that big bet is a smart one worth taking.
This blog post is sponsored in partnership with SAP Concur. To learn more about how SAP Concur can support your small business go to https://www.concur.com/en-us/small-business.