Do smart companies approach business risk differently than incumbents do?
Champy: Yes. Smart companies exhibit almost no sense of risk. In researching the book, I always asked what mistakes they made and what might they have done differently. In every case there was silence. After they thought about it, most of them said well, we made mistakes but we adjusted; I can’t recall any big errors we made. Some pointed to a few management techniques they wish they had adopted earlier, but nothing strategic. McLaughlin: Do incumbent organizations have to be more risk conscious? Champy: These days, most large incumbents are publicly-held companies. And inside these companies, risk is always an issue. Every new concept is subject to the question of whether and how this will affect earnings per share. The tyranny of shareholders is having a greater negative impact on incumbent companies than I have ever seen before. In spite of the recent financial market crisis, incumbents have never had more cash than they do right now. The shareholders, of course, want to get that ca
