Risk Mismanagement
Nothing ventured, nothing gained — but Americans have become afraid of risk.


‘To make glass is to know failure,” wrote Ryan Bradley in a Fortune magazine profile of Corning, Inc., which makes the glass that covers iPhones. A glassmaker starts out with powders of oxides and stirs them into a platinum crucible. He sticks that brew into an oven that’s more like an inferno, set at a temperature of 2,912 degrees Fahrenheit. In that oven, the oxides melt into a liquid. The glassmaker then removes the crucible, the liquid cools, and the concoction hardens to glass. A team of researchers then inspect the chemical makeup of the glass. They carefully study the seeds, otherwise known as bubbles.

“But to really know glass, to get a sense of its strength, you must break it,” wrote Bradley. “So someone bends and hammers and sometimes throws baseballs at the glass until it scratches or cracks or shatters.”

The glassmaker then studies the fractures, which reveal the glass’s secrets. Glass fails, Bradley wrote; the researchers then learn from the failure, and the cycle repeats. And improves. Glassmakers know that from failure comes strength. And there is no failure without risk. There is no growth — no success — either.

Human beings grow stronger through failure, too. Only by taking risks do we experience failure and its companion, success.

Think about the most basic risk we take each day. We leave our home and get into the car. We do that knowing that 30,000 people a year die untimely deaths because they have taken that risk. But to not get out into the world would be a bigger risk. Because we’d be missing out on all kinds of opportunities.

Each of us takes risks with our hearts. We tell people we love them. We open our hearts to the risk that the person we love may not return our love. Or may betray us. But the bigger risk is to not love.

“We must love one another or die,” says one of the 20th century’s greatest poems, “September 1, 1939,” W. H. Auden’s reflection on the start of World War II.  Even amidst the outbreak of a kind of chaos that makes our current chaos look like child’s play, Auden left readers with a stark choice. Love. Or die.

Some of us take an even bigger risk and get married. We take that crazy “till death do us part” oath. It would be far more practical to shack up together and see how things play out. Why take the risk of making a lifetime commitment to another human being, when you don’t even know what the next year will bring, let alone the next ten?

Some of us double down on that commitment and take a bigger risk: We start a family. Life would be easier — and cheaper — for married people if they chose not to have kids. Kids are loud and smelly and selfish and need years — in some cases, decades — of nurturing to face the exigencies of the world on their own. It’s easier to tame a lion than to rear a child.

And then there is a different sort of risk: starting a business. Given the odds against success, it is the biggest risk people can take with their capital. And their time. It’s their dreams as well as their life savings they put on the line. The workload is brutal, and there are so many ways a business can fail that a clever entrepreneur is lucky if he or she can guard against half of them.

All this risk taking — with our hearts, our lives, and our treasure — fuels not only personal growth, but the growth of economies and of nations.

But fewer and fewer Americans are taking these kinds of risks. The reasons are complex, part economic and part cultural. But the numbers don’t lie.

A recent Wall Street Journal article, headed “Risk-Averse Culture Infects U.S. Workers, Entrepreneurs,” revealed some startling facts and figures. Companies are adding jobs more slowly, even in good times, and investors are putting less money into new ventures. And Americans are also starting fewer businesses.

How important are startups to our economy? “When it comes to U.S. job growth, startup companies aren’t everything. They’re the only thing,” a Kaufman Foundation study reported not too long ago. Each year, on average, new firms add 3 million jobs to the economy, while older companies lose 1 million jobs annually.

In 1982, companies that had been in business less than five years made up almost half of all American companies. Half! By 2011, that number had declined to slightly more than a third. Over that same period, the percentage of America’s work force employed by new companies dropped from over 20 percent to less than 11 percent.

Americans’ appetite for starting businesses is on the decline, and so is our appetite for marriage. In 2011, 51 percent of Americans were married, compared to 72 percent in 1960, according to the Pew Research Center.

The numbers don’t look much better on the children front. Pew reports that the U.S. birthrate hit the lowest point ever recorded in 2011, with a mere 63 births per 1,000 women of childbearing age. That’s down from 122.7 in 1957.

As David Brooks of the New York Times pointed out in a recent column, there are now more households with dogs than with children.