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This chapter is from the book

Charette’s Risk Escalator

Author and risk management expert Bob Charette has proposed a useful new way to think about risk-taking in today’s environment. He asks you to imagine your company and its competitors as a set of down escalators. You are obliged to climb up your escalator, which is moving against you. And your competitors are doing the same thing on theirs. The faster the stairs move, the faster everyone has to climb to stay even. If you pause, even for a moment, you begin to fall behind. And, of course, if you pause for too long, you will drop off the bottom, no longer able to compete.

New competitors in Charette’s perverse escalator world get to enter their escalators halfway up. Falling behind, then, guarantees that new competition will enter above you.

At the top of each escalator is a lever that will allow you to control the speed of not just your escalator, but of everyone else’s as well. If you’re the first to reach the lever, that shows that you’re a better climber than your competitors. So, you can speed up all the stairs so that you can stay even but your competitors cannot.

It’s the risks that you take that speed up the stairs for everyone else. Not taking them just assures that your world will come to be shaped and dominated by someone else. This is an era in which risk-taking is rewarded, leaving companies that run away from risk as plunder to be divided up by the others.

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