RISK…..How does this four digit word have influenced us in life?
The word ‘risk’ shall appear distressing in whatever choice of decision making
ranging from buying property, investment, business start-up, suppliers, vendors,
customers to even marriage. It is common to associate risk negatively such as
being irresponsible, rash, losses, damages or even threat. Definitely it is
part of our life, business and work but yet we have seen that risk takers have
succeeded despite against all odds. However it does not imply the same
definition to true entrepreneurs. These true or successful entrepreneurs have
seen risk as positive opportunities to excel and change the platform of their
venture. Several entrepreneurs and innovators such as Robert Goddard, Soichiro
Honda, Harland David Sanders, R.H Macy, Richard Branson, Donald Trump, Carlos
Slim Helu, Martha Stewart, Emma Harrison, Linda Bennett and Bill Gates have
undergone various risks before establishing their products and application in
the world.
Entrepreneurs have the knack of getting
right in spotting a new trend and acting in advance despite the risk involved.
They are the first to gear into the business as they recognize the change in
economy or cultural trend. Being the first in market gives them competitive
edge compared to others who are known as mere followers. Orville and Wilbur
Wright were the sole reason why we have airplane. Both brothers had risked
their life, time, money and resources as they battled through depression,
illness, mockery and failed prototypes to develop a plane that could get
airborne and fly. Despite the risk involved, their success paved way for the modern transportation of the existing airlines.
Akio Morita the founder of Sony
launched its first product, an automatic rice cooker but it failed to
capitalize in the post war market. Less than 100 units were sold but did not
dampen Akio Morita as he continued to work hard in other ventured business. His
ventures are considered risky because Japan was recovering from the devastated
war and there was clouded possibility on how Japanese products shall be
received in worldwide market. His knew the risk involved but he was determined
to prove his establishment with electronics product shall succeed. This was
proven to be right as his later products such as transistor radio, magnetic
tape recorder, TV, home video recorder, video tape and CD continued to cement
his reputation as an entrepreneur who thinks ahead despite knowing the risks
involved.
Even though Tony Fernandes had
the passion to set up budget airlines, he was advised to purchase an existing
airline. Imagine buying Air Asia, the heavily indebted subsidiary of DRB Hicom.
Mortgaging his home and personal saving, Tony Fernandes took a huge risk to
acquire the airlines with two ageing Boeing 737-300 jets and US$11 million
worth of debts. Deep down, everyone felt that Tony Fernandes is making a wrong
decision as airlines industry was facing bleak period after 11th
September 2001 incident. Unperturbed he took the risk which served as opportunity
because aircraft leasing fell 40% and airlines lay-offs enables experienced
staffs were readily available. Offering reasonable pricing for cut rate air service
was welcomed by travellers who believed it was a right move with the impending
tight economy. Within a year, Air Asia had achieved breakeven point and cleared
all its debts. By end of year 2004, its initial public offering was
oversubscribed by 130 %. Whatever we may
choose to say, but Tony Fernandes took the risk positively which is an
essential skill for entrepreneurs to succeed.
However being the pioneer does
not stop entrepreneurs from enlarging their business coast but shall always
reinvent their products and services to places them on track with globalization
demand. Failure to do so shall provide an opportunity for competitors to trot
down the complacent entrepreneurs and prevail over them. Several organizations
such as Kodak, Enron Bethlehem Steel, Commodore Computers and Pan Am Airlines has
failed to monetize the necessary needs to its products and services and have been
phased out from its industry.
True successful entrepreneurs shall never
compromise such challenges as blind risk but undertake calculated risk that
provides them strategic decision. Strategic decision includes conducting a
detailed analysis on the benefits or worst possible consequences before
deciding whether to accept the challenges. We cannot explain when will be the
most perfect time to launch a business. Entrepreneurs that truly believe if their
ideas have potential success, they shall never wait and launch it despite all the
risks involved. Successful entrepreneurs have always come out from their
comfort zone by taking challenges that may deemed impossible. The question
poised here is “Are you willing to risk all you have that include money,
relationship, resources, dignity, properties or even life to achieve the
success? Surely the phrase ‘No Pain No
Gain’ has its substantial meaning to be associated with all the entrepreneurs.