Dictionary describes RISK as 'dare to undertake'. Undertaking an event or an action the outcome of which is uncertain. However, in today's competitive world one needs to operate in an environment of uncertainty with ever changing technology, global market and the changing social expectations. People as well as organizations should learn that risk is inevitable and is essential to success. The dividing line between innovation and risk is getting blurred since every innovation involves certain amount of risk of failure. Hence, not only organizations, but individuals also should develop the ability to take risk. The human progress itself depends on people who take bold initiatives.
"Risk is always present when progress into new field is made", said Dr. Denton Cooly - surgeon who performed the first heart transplant. Most of the time trying to avoid risk itself could be a bigger risk- like Trammel Crow said
"There is more risk in doing nothing as in doing something". So it is not the question of avoidance of risk but managing the risk that is important.
"Everything worth while carries risk of failure. I have to take risks every day. I would rather not, but the world has not given me that option. You are never going to get what you want out of life without taking risk."- Lee Iacocca. The man who quit one million dollar per year salary at Ford Motors to head the floundering Chysler Corporation for 1 dollar a year salary and turned around Chrysler into a powerful profit making corporation. Well! That was a risk!
The risk taker perceives risk differently than a risk avoider. Where a risk avoider sees safety, risk taker sees peril and where risk avoider sees danger risk takers see an opportunity. When risk is perceived as representing the possibility of loss, the risk takers look at the possibility of gain and perhaps this is the very core of risk that gives life its purpose and spirit.
Every enterprise should be a risk taker if it needs to grow. Without this risk taking ability there is no entrepreneurship. Every entrepreneur takes risks willingly and voluntarily - not just the financial risk but also personal, social and psychological. Jack Welch, the super CEO of the last decade & President of GE describes risk takers as "challenge takers". He says entrepreneurs are neither low nor high risk takers, they simply prefer situations in which they can apply their wit, wisdom and sweat to influence the outcome. They are highly motivated by the challenge in what they perceive the odds to be - interesting but not overwhelming.
3M - an enormously successful fortune 500 company has developed more than 60,000 products. Risk taking is their middle name. They perhaps made risk taking a rule rather than an exception and it certainly paid off.
In the last 20 years there had been overwhelming examples of small firms which had experienced explosive growth through developing innovative products and services while much larger and more powerful competitors were unable to produce such results. Large companies that are complacent do not have the will to take risk and by that they risk their very existence!
Few tips for managing risk: - Recognize the risk- there are 3 types of risk - "speculative risk" - like investing in stocks. Risk which depends purely on chance and when you have no control over the outcome what so ever it is a "pure risk" The third is the "calculated risk" - where the possibility of loss is anticipated and actions are taken to minimize the loss. It is this category to which entrepreneurial people and organizations are attracted.
- The creative visualization - construct mentally the nature, the process and the outcome of the risk taken. Be positive. Positive thinking actualizes in positive outcome.
- Believe in yourself- you must believe that you are taking the risk in larger interest- beyond your own narrow selfish needs. This provides greater power to the project undertaken.
- Risk compensation is not only financial or material- most of the time the compensation of a failed risk comes in the form of a new knowledge, new insight and new experience. In fact, many unanticipated knowledge has come from failed risks.
- Believe in higher power- a new idea could be a seed planted in you from the higher power. Respect it & own it. When the seed is planted the resource needed for growing it into a plant is within you.
