64 WOULD YOU, WOULDN’T YOU?

You have a major decision to make. It’s make or break time – what are you going to do?

There is a possible opportunity in the market in which you operate. If it succeeds, it could be the future of the market; if it fails, it could mean the end of your company. You have little presence in this sector of the market and in fact have experienced one or two minor failures before. No other competitor has yet achieved a major success in this area. Indeed, your main rival believes the future lies in the currently dominant sectors.

Your engineers are excited about the opportunity and technical challenges, but your sales force reports that potential clients in your main geographical markets, the US and Europe, have expressed little interest in this type of product. They seem particularly uninterested in an offering from your brand, which they see as intrinsically linked to your current market sector.

Your current, successful business has one major client, which accounts for around 80% of your business. They may just be interested, to a relatively small extent, in a version of the product you are developing. If they buy in, it will help to reduce your likely capital commitment.

Without that commitment, the project and the development of the first prototypes will cost three times your average annual after-tax profit for the past five years – roughly a quarter of your total net corporate worth. Even with it, the investment is huge.

Do you go for it?

If the year was 1952 and you were one of the Board members of Boeing, you’d say “Yes”.

You’d decide to commission a project that will build the first large jet aircraft for the commercial market.

You’d decide to call it the Boeing 707.

You’d manage to persuade your major existing client, the US military, for which you have been building B-17 Flying Fortresses and the B-52 jet bomber, to buy a version of the new plane. It will use it as a fuelling plane and so reduce your gamble to $15 million.

Your main competitor Douglas Aircraft (later to become McDonnell-Douglas) would decide to carry on focusing on piston propeller planes for the commercial sector. It wouldn’t be until 1958 that it would enter the now booming sector with the DC-8, letting you build an unsurpassable lead.

You’d go from building great bombers to being the leader in the new commercial jet market.

Your decision would change the face of the flying industry.

And the moral is that sometimes you have to take a leap of faith. What plans do you have that scare you?