Strategies come in all sizes, shapes and levels of reality. From experience, I tend to place strategies into one of three categories: strategies based on knowing, strategies based on expectations and strategies based on hope. Those based on knowing have the lowest risk and are usually rooted in tried and true initiatives (or based on them), but they are often also of limited scope and/or potential. They are the safe bet. Those based on expectation represent taking calculated risks. The strategy may represent, or seems to exemplify, a logical next step, a stretch, a potential within reason. Failure is possible but not probable. Strategies based on expectation typically offer the greatest potential when balanced against reasonable risk. On the other hand, those based on hope are a high risk gamble. Sometimes crafted out of wishful thinking rather than supported by fact, they face a high probability of failure. They may, in fact, be what management or investors want to believe but are not likely to happen. They are a gamble, not a risk.

How do your strategies stack up?