"Risk is the cost of aggressive objectives."
Risk is an interesting phenomenon in that there is a right and wrong way to approach it. Risk for the sake of risk, is just recklessness. Being reckless has no real connection to risk. The only connection is you're about assured of failure. It's not really risk, it's more a low-percentage gamble.
From a business way of looking at risk, risk must be entered into with the idea that the potential returns far outweigh the risks encountered.
Risk isn't gambling in any way, it's a look at an entire process that can result in extraordinary results. Risk is something that can be measured and the potential of failure or success understood.
Having said all that, risk is still risk; nothing is guaranteed. But what needs to be understood is the potential gains and odds when taking that risk.
How do we measure risk? The lower the chance of success, the higher the potential return must be. It's as simple as that. We all know if you put your money in a safe investment today, you'll get about a 5% return on your money. The higher the risk you take, the bigger chance you have of losing your money. It's the same with business deals and potential they represent.
The other thing about risk we must manage is it can't be something that bets the entire farm on something. We can make mistakes in business - even big mistakes - but we shouldn't make business-breaking mistakes. No risk is worth losing the entire business over. At that point it ceases being risk, and enters into the arena of gambling, where all the odds are against you.
Still, if we want to be aggressive and grow the company, risk will be part of the way of doing business. To me the greatest risk we take is being in business itself. Choosing the right industry to me is becoming increasingly more important than projects undertaken.
Look at the print newspaper industry. It pretty much won't matter what project is undertaken in the industry, it's not going to change what's happening. If someone were to arrogantly get into the industry now, thinking they can turn things around, they are guaranteed failure. It's just not going to happen.
Risk can be managed, but results can't be guaranteed, no matter how much we research what we're doing. The best we can do is choose the right risks, and make sure the end results are worth taking it in the first place.
Other Andy Grove Resources:
Andy Grove's Rational Exuberance
The Digital Age . . . driven by the passion of Intel's Andrew Grove
The History and Influence of Andy Grove
Andy Grove enters new post-Intel role as activist capitalist
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