When was the last time you stepped out of your comfort zone? It’s easy to get stuck in a routine, especially at work (more so if you’ve been doing the same job for a while), and taking on a new challenge is a great way of getting out of that rut. At Virgin, I use two techniques to free our team from the same old routine: breaking records and making bets. Taking chances is a great way to test myself and our group, and also to push boundaries while having fun together. I have always loved a challenge. When my family and I went to the British county of Devon on holiday when I was four or five, my Auntie Joyce bet me 10 shillings that I wouldn’t learn to swim by the time we returned home. And somehow I didn’t learn while thrashing about in the sea. I was determined to prove her wrong, so when I spotted a river during the drive home, I asked my dad to stop the car, then ran out and jumped into the water in my underwear. At first, I sank and started swallowing water, but I kicked upward and, to my amazement, soon began to swim downstream. My reward for passing the sink-or-swim test was a crisp 10-shilling note — the most money I had ever held in my hands. That and later challenges taught me that it is important to try things that might not work, and then improvise solutions along the way. I’ve found that attempts to break records can result in technological leaps forward. For instance, the businessman and adventurer Steve Fossett flew our Virgin Atlantic GlobalFlyer nonstop around the globe in 2005, becoming the first person to complete such a flight solo and without refueling. Our plane was built using carbon fiber, at a time when other plane manufacturers relied primarily on heavy materials. Following the GlobalFlyer’s success, Boeing and Airbus both started using carbon fiber in the manufacture of some aircraft. This technology will make planes lighter and is likely to dramatically reduce the carbon output of the airline industry in the future. (The plane is now on display at the United States National Air and Space Museum.
More importantly, entrepreneurs have to understand that risk is directly connected with our choices about personal life or our business at a daily basis. The main point of interest is that if we can identify pragmatic risk and take advantage of it innovatively:
Risk is everywhere. It’s in every choice we make on a daily basis. What is risk, though? Economists define risk as ‘opportunity cost’ or the cost of doing one thing versus something else. For example, if you spend your last dollar on bubble gum, you have gained the opportunity to chew bubble gum at the cost of not having a dollar to buy more calorie-rich food with. And if you move your family to a new city you gain the opportunity to live in a new part of the country at the cost of knowing your way around town (at least for a while). You may define risk differently. To you, risk may be your source of adrenaline. Like base-jumping or skydiving. Your preferred risk may be more business-oriented, as in “I have a great idea, so I’m going to go for it and spend hundreds of thousands of borrowed dollars despite my team’s pushback.” Some would consider that leadership. If the idea has been properly vetted and measured against a crystal ball, then I would too. But often our crystal ball is clouded with our own experiences and dreams, and there’s scarcely room for truth or a deep level of honesty about what is really possible with the introduction of our new widget. If risk is simply trading a known cost for a known opportunity, why is it so hard to take risks, then? Why do we equate risk as being equal to loss?
It is equally true, the a proper handling of risks can be achieved with a combination of applied leadership and innovative ideas by forming a business model:
Richard Branson‘s Entrepreneurial Success came from taking Risk …
Richard Branson, born in London in 1950 and today the fourth richest citizen of the United Kingdom, has blazed a trail of bold leadership, innovative ideas, and business model adaptation to the top of the entrepreneurial pyramid during his time at the head of the Virgin empire. From the music industry, to the airplane industry, and now with his new venture into commercial space travel and exploration, Branson has remained a man of the future. Richard Branson has shown an ability to think proactively and remained focused on the big picture since his inauspicious beginnings as the head of The Student, based in London. The only quality that has been as consistent in Branson’s entrepreneurial trajectory has been his desire to shoot for the headline, no matter what the backlash. This trait is captured especially in the irony of Branson’s original moniker for his record selling company, “Virgin”, adopted because Branson and his associates recognized how new they were to a crowded and popular business at the time. By using money from the record store he started after his beginnings at The Student, Branson went on to launch Virgin Records, the fledgling beginning of what would become an international sensation with flagship stores in cities all over the world during the height of the physical music (aka cassettes, records, and CDs) heyday. Branson defined his label by signingcontroversial and exotic acts of the time, most notably the Sex Pistols, who’s off-stage antics and vivid personalities combined to make them an outlaw band in the eyes of many bigger labels. Branson, as mentioned earlier no stranger to taking risks at the cost of raising some eyebrows, recognized the band’s talent and used them as a springboard with which to grow his own label as a player in a crowded industry.
Finally, everyday business experience proves that it is better to accept risk and take it, than to be afraid of it and avoid it. The main challenge is to combine it with innovative ideas: Richard Branson.