No Risk, No Reward

Such gigs are, in fact, all about target practice. A marketing tactic that's unpalatable to the masses becomes startlingly right when applied to the right niche. On one level, Casio's bondage gambit seemed dicey. But when aimed at a crowd of Manhattan fashionistas, it won exactly the right sort of attention for the company's G-Shock watches. "It's all about relevance," Neisser says. "It used to be that research was all about mitigating risk. We'd do a focus group and show an advertisement to 10 people -- and if 7 or 8 liked it, we'd have some comfort that this was a good program.

"Now what we want to know is, Does it resonate for two of them? Were two of them so fired up about it, we couldn't get them to shut up? Because you're no longer marketing to 7 out of 10. You're marketing to one.

"We're at an interesting juncture with one of our clients right now. It's an integrated campaign that plays with words, and some of the words aren't grammatically correct. The client could easily say, 'It's not correct. Don't run it.' But that's exactly why we should run it. That's what attracts people's attention. And the one or 2 out of 10 people who get it say, 'That's really cool.' "

Renegade Rules IV
1. Define objectives in the context of the entire communication plan.
2. Set tangible metrics.
3. When all else fails, blame it on Renegade.

IV. Playing It Safe, Part 2: How much fuel is enough?

A plane departs Newark, New Jersey for Los Angeles. If the flight goes smoothly, it will burn around 40,000 pounds of fuel. If there are glitches, such as lousy weather or congestion over LAX, the plane will need more fuel. Every pound of fuel adds cost and weight, requiring even more fuel.

The problem: How much is just enough? Too much, and the plane incurs more costs (fuel represents the second-biggest operating expense for airlines). Too little, and the plane may have to divert to another destination -- an outcome that's less safe and far more expensive.

It's a calculation that Continental Airlines makes thousands of times a day. It's also a modern iteration -- more complex, if less profound -- of Pascal's foray into decision theory. Mitch Dubner, Continental's director of operations planning, reveals how he figures the odds.

One major consideration is the equipment. A Boeing 737-800, the workhorse for many Newark-L.A. flights, is smaller and consumes less fuel than the 757-200s that also travel that route. A plane that is fully loaded with passengers and cargo, of course, needs more fuel. Then, a host of weather variables are considered. Steering around a thunderstorm adds to flight time. So do heavy winds.

Are there 15 planes lined up for takeoff at Newark? Will air-traffic control allow takeoff on the long runway? A longer runway sends the plane to a higher, more fuel-efficient altitude faster. If gridlock seems likely at LAX, operations managers will add fuel for several laps around the airport.

At the current price of about 60 cents a gallon, the fuel onboard a Newark-L.A. flight is worth between $3,300 and $4,500. If Continental could reasonably save $100, it would. But what's reasonable? If an LAX flight runs short on fuel, it may have to divert to Las Vegas or San Diego. The costs of that are huge. Imagine what's involved in getting 150 passengers from San Diego to L.A., getting the plane back to its point of origin, and accommodating the L.A. customers stalled by the missing plane. "Disconnects," says Dubner, "cost us a whole lot more than carrying the fuel."

So to what extent does the cost of adding more fuel diminish the chance that a diversion will be necessary? At what point can Continental tolerate the risk? The answer is, it always pays to play it extremely safe. The Federal Aviation Administration requires every commercial flight to add 45 minutes' worth of fuel to the minimum amount required for an on-time arrival. On top of that, Continental typically tacks on another 30 to 60 minutes' worth.

V. Leadership: "Wealth is created during periods of uncertainty."

This is how Yoram "Jerry" Wind sees it: Everything bad that has happened during the past year -- the dotcom implosion, the recession, terror, the war -- destroyed the illusion that we operate in a world that is continuous and continuously prosperous. As it turns out, our world is nothing like that. Our lives are routinely disrupted, our work dislocated.

But to dwell on cataclysm would be to miss the opportunities that cataclysm creates. "Wealth is created during periods of uncertainty," Wind says. "You can go back to Frank Knight,* who said in 1921 that the only risk that leads to profit is unique uncertainty. Making money depends on identifying opportunities in a turbulent marketplace."