Choices & Consequences: Be a Pilot (Part 1)
Without risk, there is no life. To avoid risk is to avoid life. Innovation, creativity and evolution are but a dream, without risk.
Risk is at the center of every decision and our decisions shape who we are. We choose movement, action and progress when we elect to take a risk. You take a risk when you leave your home without an umbrella, when you drive to work, when you exercise at the gym, or when you have a drink. You take a risk if you are a startup entrepreneur, an executive at a conglomerate, a student, a teacher, or a fireman.
Rule number one of life and entrepreneurship: choose to take risks!
From the time we are born, we are programmed to explore uncertainty and embrace risk; every one of us is designed to evaluate options, assess risks and choose — decide on how we evolve. We are constantly steering our lives through a minefield of choices and consequences. As a pilot, every day, we choose to embrace risk and navigate towards prosperity. Because, if you choose to not risk, we choose to not exist!
Aircraft pilots would be grounded forever if they chose safety and certainty. We can choose to be a pilot, an active participant, or a passenger, a passive one. Just remember, the risk of crashing is present for everyone. Entrepreneurs choose to be the deciders, the risk navigators and managers. Despite popular belief, entrepreneurs are not imprudent risk takers; they are pilots.
Pilots Are Risk Navigators
Pilots are aware of the hazards of every trip and willingly embrace them. A bird can fly into the engine and prompt disaster. A single, inexpensive diode, capacitor or memory chip can drive system failure. And yet, pilots choose to fly.
The US Department of Transportation Federal Aviation Administration’s (FAA) handbook for risk management states that “identifying threats and exposures and the associated risk in time is key to addressing vulnerabilities.” If a pilot fails to search for risk, it is likely that he or she will neither see it nor appreciate it for what it represents. Unfortunately, in aviation, pilots have a much smaller margin for error and do not have the opportunity to learn if the mistakes are fatal. Entrepreneurs may enjoy a bit less life and death pressure on their flight. However, the pressure is amplifying as the speed of change and innovation is constantly increasing — think of Uber and the blunders of his founder: spying on passengers, dubious driver-less car experiments, and price gauging through nighttime price surge algorithms — all non-mitigated risks in hopes of more revenues and valuation. The business competitive world is becoming more and more unforgiving and errors in judgement come back to haunt the entrepreneurs and their companies a lot faster.
The FAA claims that the risk associated with each hazard varies with each pilot. According to them, pilots accept their own individual level of risk even though they may have received similar training. Risk, which must be managed individually, becomes a problem when the situation’s complexity exceeds the pilot’s capability (background + education + predispositions + attitude + training). The key to managing risk is the pilot’s understanding of his or her threshold and perception of the risk. In other words, the nature and degree of risk exposure changes from person to person; the same applies to entrepreneurs. Entrepreneurs may all have a list of common things to worry about (employees, cash flow, product launches, customer loyalty, etc.), but the extent and the impact of the risk emanated from each varies from entrepreneur to entrepreneur and company to company. The conditions that exist or appear during a flight are neither wrong nor right. What makes all the difference in the world, however, is the way a pilot manages and mitigates the risks. The same goes for entrepreneurs.
“Good ‘Decisions’ are manifested when
courage blooms, risk is neutralized, and movement initiated;
Great ‘Decisions’ are shaped when
uncertainty is woven in to every action and reaction”
We All Reap What We Sow!
The FAA outlines risk around four categories i) Pilot: physical and emotional health, fatigue, medication and stress; ii) Aircraft: conditions of the plane, payload, instrumentation, fuel, passengers, etc.); iii) Environment: Weather conditions, terrain at airports as well as day and night differences; iv) External Pressures: personal life, co-workers, boss, etc. Entrepreneurial risks can also be reduced to similar categories i) the entrepreneur, ii) the company or the organization he / she drives or is a part of, iii) external market and competitive pressures arisen from customers’ constant changing expectations, regulations, economy, etc. and iv) external pressures originated by the various stake holders: venture investors, family, partners, employees, etc.
To manage risk, you have to first realize that it exists. You must search for it. Again, according to the FAA, in aviation, experience, training, and education help a pilot learn how to spot hazards quickly and accurately. Once a danger is identified, determining the probability and severity of occurrence (level of risk associated with it) becomes the next step. Is the vulnerability i) Probable — an event occurs often, ii) Occasional — an event occurs sometimes, iii) Remote — an event is unlikely to occur or iv) Improbable — an event is highly unlikely. Identification and assessment of likely circumstance is only the first step. To prevent disaster, the pilot needs to mitigate the risk (cancel or delay the flight, drive, change route). As risk managers, entrepreneurs need to constantly assign a probability to the likeliness of events ahead. They need to be able to identify and assess — have insight and timely intelligence. Lastly, they need to be ready to act, to mitigate, to pivot on plans, to change directions or intentionally be ready for stormy competitive weathers ahead.
In aviation, just as in business, a successful journey is not the result of eliminating risk, but a conscious decision to be prepared for it.
Keep an eye out for Be a Pilot: Part II (Coming Soon).
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This is a condensed version of the original article that may appear in Sid’s next book.