We are all hardwired to take risks. Think of the people we often admire such as sports people, military leaders or social reformers; are all risk takers. Small risks or big risks depend on our risk appetite or preferences. Small risks are things like; who to marry, where to live, holiday destinations, and in many cases jobs and careers or just crossing the road.
‘Big risks’ are transformational moves such as leaving one job and set up business, move city locations, country, or change careers. The biggest risk is to take a gamble on something new. This is called entrepreneurial risk, the driving force behind change in societies throughout history. Think of risks as being in time and space. What is risky now will not be once it shown to work or accepted by people, what is risk in our culture may be normal in others.
Drivers of change
People who can identify a problem and find a solution to that problem are innovators and inventors. The impulse for this may be to overcome adversity, or hurdles they face, gain high status, or obtain more boasting right. Whatever it is, such people can take advantage of the opportunity to make profits and execute plans to make things happen, are called entrepreneurs. Entrepreneurs take the risk and reap the rewards. These people usually have the following mindset.
1. A challenge or problem to solve
2. A solution they can propose
3. Making it happen
Children are great at this, till parents or teachers knock it out of them.
Who are risk takers?
Are we all big risk takers? Evidence shows that is not the case. The fact that companies, universities, and governments encourage people to be entrepreneurs may be wasting their time and misleading potential entrepreneurs. One key ingredient of entrepreneurship is risk taking. Research indicates that most people are not risk takers; most people are actually risk adverse. In an American study by Northwest Mutual in 2019 found the following results.
65% prefer the consistency and stability of staying with one employer rather than taking the risk of moving around;
76% prefer the stability and consistency of living in one place long-term,
72% say their personal interests tend toward activities that don't involve an element of risk.
66% stick close to the friends they already have, as they tend to avoid taking chances socially.
This shows that on average, about 70% of the population are not risk takers, which actually corroborates my old economic professors, from Hull and Bournemouth universities, view about risk taking.
Also, most risk takers have some form of mental issues, and challenges, especially attention deficit hyperactive disorder (ADHD), which also is positively relates to a firms performance through Entrepreneurial orientation (EO). Such people are more innovative, task originated, and take risks. This research has two profound implications for encouraging entrepreneurship.
1. Are universities and colleges the best places or are they wasting their time on teaching entrepreneurship?
2. Are we looking at the wrong places for future business leaders?
If 25% to 30% of people are natural entrepreneurs, the rest are workers, like in a beehive.
Obviously, now that universities are profit making machines, their interests are ‘bums on seats’ to maximise their fees, rather than true business development. Colleges are selling a dream on which they cannot make good for most people.
Are we wasting our time?
This teaches us a key lesson, this time in terms of marketing. Are we wasting resources on the wrong audience for our products or services? The task is like trying to sell a new version of the bible to the Pope or new ideas to an MBA trained executive. Innovation and new ideas are not their domain. Both are ‘safe pair of hands,’ who are tasked to keep the old fires burning and processes going .
In other words, skills and mindsets are honed by life’s hurdles and genetic predisposition. A 2016 study in 'Management Science' unveiled that 37-48% of the inclination to become an entrepreneur might be in our genes.
This might explain why so many Indian, Pakistani or Southeast Asians become entrepreneurs not just due to job discrimination, language and exclusion from the mainstream.
Let me put it another way. Are we targeting the right people to train to become entrepreneurs? Should we be targeting people who are not afraid to break things, who have mental drive that is different to ‘safety first’ approach.
Traits to look for
We should be looking for the following traits in people.
Childhood ventures ; they were highlighting an early entrepreneurial spirit.
Inherent Risk-taking and in-built tolerance for risk is something beyond mere learning.
Brain chemistry, people with higher levels of dopamine, a neurotransmitter in the brain, tend to be more entrepreneurial. It’s not just training; it’s molecular!
Natural problem solvers, people who cannot rest until they've cracked the code. It's innate for many entrepreneurs.
Instinctual mindset that can't be quenched by anything other than pursuing their vision to solve problems.
This implies we need to take a more mental and psychological profiling approach to entrepreneurship training. It seems no amount of teaching classes, models, boot camps or accelerators will help to build a culture of enterprise till we know who is mentally prepared, up for a challenge and have the confidence to drive change. No amount of growling and power walking will turn a chicken into a lion. training Looking a great events or figures of history or warfare, the mental aspects overcome any number of resource shortages. This is a classic example of creative risk taking.
We should screen people early by asking the following questions to produce a problem-solving mindset.
1. Have you ever taken any risks other the small ones listed above?
2. What is the biggest risk you have taken?
3. Do you enjoy taking risks?
4. What make you accept challenges?
5. Are you mentally ready to take on challenges, even when things look
hopeless?
Few teachers or companies involved in nurturing entrepreneurs have asked students such mental health questions when we should start with the mind and attitude test. A great website (https://playvolutionhq.com/handout-4-types-of-early-learning-risk-taking/) created a schema for early risk behaviour to ascertain risk taking in very young people. They used Physical, Intellectual Emotional, and Social Risks in the chart, I have used the same categories but rearranged them so its easier for readers to remember using the word PIES. This mnemonic standards for Physical, intellectual, Emotional and Social risks, like SWOT analysis in business planning.
PIES chart
All such traits are considered rebellious, headstrong, ‘nut jobs’ or even insulting in some cultures, but they are the basis of business and intellectual risk taking. I contend that if any young person exhibits these traits from an incredibly early age, they are potentially on the road to being great entrepreneurs. It’s having the self-confidence and the belief against accepted wisdom. In my view all risk takers will always outstrip any AI powered robot in generating creative outcomes and finding new solutions unheard and expressing them convincingly with morals to stand by your convictions.
Conclusion
We need to understand that not all opportunities come in neat boxes. Trainers must also accept the importance of neurodiversity, such as ADHD, whilst rethinking our views of risk taking and business education. Learned stereotypes or need for conformity prevent us from finding the best solutions. If we want conformity in humans, let us clone and make them into robots. Trainers must rethink the enterprise mindset in young people and chose from risk takers rather than take the view that all can become entrepreneurs. All people, young and old who break norms should be encouraged, rather than let culture stifle them.
By Zulf Choudhary
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