Is Stelios Smart to Be Cautious?

amber-light.jpg Entrepreneurs are said to be differently wired and are more willing to take big risks as a result. So what's maverick budget airline boss Sir Stelios Haji-Ioannou doing trying to restrain the board, hardly known for wild decisions, at EasyJet?

Has he, as some would have it, lost his nerve and fallen prey to the kind of mid-life corporate crisis entrepreneurs are prone if they don't let go? Is he the "grumpy founder shareholder... barrelling up and down the aisle as the flight gets bumpy"? Or is he showing another trait common among entrepreneurs, a reliable gut?

His travel brands are the best performing of Sir Stelios's myriad concerns, which include EasyCar, a rental business and EasyInternet Cafes (these likely to see less demand as home broadband is so widespread). And he now has control of over 25 per cent of EasyJet's holdings, having added his siblings' 11.3 per cent holdings to his own 15.6 per cent stake, estimated to be worth around £180m.

His public criticism of the board does his shareholding no favours and he would have done better to keep it behind closed doors. And while it's true that there are doves and hawks in every boardroom, it's naturally going to be more damaging when the founder refuses to back his board's business strategy.

On the other hand, Sir Stelios has remained pretty hands off up until now -- giving his intervention all the more weight. Maybe that caution's just what is needed. Aerospace giant Rolls Royce has announced plans to lay off up to 2,000 of its 39,000 employees (60 per cent work of whom are UK-based) because of delays on delivery of some Airbus A380 and Boeing 787 aircraft. Overall, this takes the total announced job cuts in the UK to 24,000 this week. High-street retailers are desperately slashing prices while Woolworth's contemplates a £1 bid for its 800-outlet chain.

His caution may be uncharacteristic, but maybe Sir Stelios is right to ground EasyJet's growth plans for now.

What do you think -- does the current financial crisis call for a more risk-averse entrepreneur?


(Photo: Redvers, CC2.0)