Every now and then someone tells you something that becomes core to how you think. Here is such a concept I learned from Dan Amos, CEO of Aflac…
We make decisions every day. As CEOs, our decisions impact not just our business, but other related businesses and often the very well-being of thousands, perhaps millions. The world is becoming increasingly more complex. Bigger opportunities, bigger threats, bigger risks. And the decision-making time has been truncated dramatically.
A while back Dan Amos and I were talking, and he shared how he manages insurance risk: “I call these the three principles of managing risk in insurance: Don’t risk a lot for a little; Don’t risk more than you can afford to lose; and Consider the odds.”
The more I thought about these three principles the more I realized they apply not only to insurance but to practically all decision-making. And then it really hit me… In our age of digital transformation, they are more relevant than ever and, in fact, can be the key to simplifying fast moving, complex information.
So here’s my current thought for CEOs: When faced with ambiguous information, high stakes and the need for a fast decision, start by asking yourself, “Am I risking a lot for a little? Can I afford to lose, and what are the odds of success?”