The Risk of Not Taking Risk
The Risk of Not Taking Risk
In a previous post, we jotted down “loss aversion” as one of the barriers to growth in Optometric marketing strategy. The “loss aversion” notion was interpreted by Kahneman and Amos Tversky in the 1979 paper “Prospect Theory, Analysis of Decision under Risk”. It consists of the belief that a person has in his mind that losses are perceived as far greater than the equivalent gains. “Loss aversion” actually runs the opposite way risk-taking goes. Risk-taking is at the basis of success in entrepreneurship. A common hard-to-take risk, we often learn about among a startup entrepreneur is that he mortgaged his house and everything he owned to try his new idea.
Don Keough former president of Coca-Cola Company wrote “The Ten Commandments for Business Failure”. He placed “quit taking risks” at the top of the list. He emphasized that risk aversion has always been the prevailing mood for most of mankind’s history. Risk aversion is highly influenced by the rationale that makes people cling to loss aversion. People chose to settle down and live as their fathers, mothers, and grandfathers. Very few would want to take risks and get into new undertakings.
Don continues to portray America as a country that has always been about risk-taking from its very beginning.
“From Columbus to Jamestown to the Second Continental Congress and Thomas Jefferson’s eloquent Declaration of Independence, this nation has been built on one risk after another. We are the descendants of tough, resilient risk-takers who put everything, including their lives, on the line and survived almost insurmountable odds.”
Optometry in itself is about risk-taking; the profession’s origins date back to antiquity and the science of optics. The Greeks 400 years before Christ, had some knowledge about optics and myopia. Throughout centuries risk aversion limited getting into new undertakings.
The invention of Optometry came as an American product that is based on risk-taking. Charles F. Prentice called the “Father of Optometry” was himself a risk-taker. He enticed the public to conclude that he had the qualifications that authorized him to a fee for advice. And that was at the time the biggest risk that an optician would take. Despite opposition from the medical society, he and his colleagues were able to submit a bill to regulate the practice of Optometry in the state of New York.
In 1904, the terms “Optometry” and “Optometrist” were adopted and they were popularised by a consecutive campaign. In 1908, and after 12 years of continuous effort, the New York Legislature passed an Optometry law. In 1919, the American Association of Opticians changed its name and became the American Optometric Association.
What would then be the Risk of not Taking Risk?