Myths about risk

Understand what risk actually means

Risk taking vs risk takers

Principles that you must understand about risk

1. Like a balancing act, we are working towards a goal, but are well aware
of the fact that we might fail. Similar to travelling, by bus or air, we may be
involved in an accident. But that does not stop us from travelling. Or even
investing in shares/property, where we may face a loss on the investment.
However, that does not stop us from investing, because we know that we
are moving towards a goal.
Instead of avoiding the above, we acknowledge the risks and take steps
to manage the risks

Risk takers are NOT gamblers.

They do not live through life depending upon luck or chance. Risk takers
are comfortable with uncertainty and face it in a calculated way and
planned way with courage. They get out of their comfort zone to explore
new paths, roads, ideas. Risk taking does not come naturally to each one
of us, because of the way we think.

Risk taking is a quality that we can develop. Risk taking allows to develop
and make changes in our lives. In fact positive risk taking involves weighing
the pros and cons in each situation and then making a choice in other
words you identify risks that you could face in the future and develop plans
to manage and minimise the harmful outcomes.

Resilience
Resilience is something closely related to risk taking. It is the ability to
accept and make the most of something and the change associated with it,
even if it something we did not expect. Highly resilient people can easily
bounce back from difficult situations and do not give up when they face
difficulty and uncertainty

Case Study on KFC

Col Sanders
Owned a restaurant
Was not doing well the highway on which it was located was being shifted
and he lost a lot of customers in the process. He was not young or very
courageous at the time, but he knew he had to do something . He decided
to sell his recipe
In exchange for the recipe he demanded a percentage share in the
revenues of the business.
Drove around the US, slept in his car and kept looking for someone to buy
his recipe. He met more than a thousand people before he actually
managed to get someone to agree.
He was RESILIENT and nevegave up despite any difficulty that he faced.
Col Sanders made a fortune
Because he had the ability to face failure and was resilient.

RESILIENCE AS A TRAIT
Resilience is a trait that all of us can develop. Whenever you face a
challenging situation just think of the barriers as a bridge to a better future.

Steven Spielberg got rejected from UNI 3 times before he dropped out and
became a director.

Richard Branson launched 400 companies, before he setup Virgin Galactic.

Wright Brothers.

MANAGING RISKS

Relation bw risk and resilience to entrepreneurship.

Taking risks is imp for innovation.
Entrepreneurs take many risks while developing something new
-Risk that idea will not work
-Risk that someone does it before
-Risk that it will not appeal to customers

Despite such risks, they still do it

(Work towards achieving their goals) because :
they see opportunities in situations and circumstances rather than risk
They have the ability to take calculated risk

Two step process

They determine which risks to take
Then take measures to manage/handle those risks, in a manner that helps
to meet the business goals.

Jeff B good example of someone who managed risk. He had a good

understanding of the business……

Failure is the other side of success.

Successful entrepreneurs have a healthy attitude towards failure.
Consider failure as a learning opportunity rather than a bad mistake.

Knowing when to give up is also a good characteristic of succ.

Entrepreneurs.

Eg. Jeff Bezos “Amazon Auctions”

failed to compete with eBay. Quit after it failed. Also failed selling “fire
phone”

What can be learned from this/other examples?

-Risk is something to be avoided; rather it is something to be identified
when we start a venture. W/o risk we will never grow or evolve.
-Learn from mistakes
-Fix your mistakes
-Move on
-Know when to give up

Entrepreneurs take risk but do not leave things to luck or chance, work
on managing risk and being resilient.