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Embracing risk key to economic revival

May 11, 2009
Risk has a bad name these days, for understandable reasons. In recent years, many corporate executives managed as if the boom times never would end, along the way ratcheting up debt to unfathomable levels. Many bankers, meanwhile, doled out loans to the lowliest of borrowers, and traded complex securities few truly understood.

Yet a strong economy requires risk-takers, and it is the bold and brash who will seize opportunities as the economy rebounds.

Indianapolis' corporate titans—drugmaker Eli Lilly and Co. and health insurer WellPoint Inc., among them—never would have achieved their colossal scale had they managed for mediocrity. They were aggressive and took chances, without being reckless.

Which is why we're heartened by some of the developments on central Indiana's corporate landscape. As J.K. Wall reported last week, Eli Lilly CEO John Lechleiter plans to manage the company through one of its most challenging times by focusing on true innovation, not by producing another round of "me-too" drugs.

If the 55-year-old Lechleiter succeeds, the company will see huge financial rewards and the world will have access to ground-breaking drugs for such vexing maladies as Alzheimer's disease and multiple sclerosis.

The new management of Steak n Shake also is shaking things up. Sardar Bilgari, the company's 31-year-old chairman and CEO, recognizes the nostalgia that surrounds the nearly 75-year-old diner chain, but realizes that's not enough to carry it another 75 years.

So he's embracing an idea that formerly was taboo: opening limited-service Steak n Shake locations in strip malls. It's risky, to be sure, since it muddies the line between Steak n Shake and fast-food outlets. But the cheaper strip locations could fuel explosive growth.

At the company's annual meeting last month, Biglari summed it up: "We can be 75 years old, but we can't act like it."

We agree executives have important lessons to learn from the economic meltdown. Perhaps the biggest is that managers should keep debt loads manageable so they have the flexibility to navigate through the next economic crisis.

But that doesn't mean executives should run their companies timidly. Entrepreneurs willing to take risks built the American economy into the envy of the world. Shrinking from the challenges ahead would be a recipe for failure.

Kenley a bright spot in bleak session

Lots of politicians should hang their heads over their performance during this year's failed legislative session.

But one lawmaker deserves a pat on the back: Sen. Luke Kenley, 63, a Noblesville Republican who was first to come forward with a potential fix for the CIB problem, even though there was nothing to be gained politically.

Kenley's distinguished 16-year career in the Legislature has been marked by a willingness to take the lead on complex, politically sensitive issues, from funding Lucas Oil Stadium to property tax reform. We don't always agree with his positions, but admire his service to the state.

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