Don’t Let Risk Stop you from Innovating

by Jacqueline Zhou

There is no such thing as “risk-free” innovation. But without taking some much needed risks, we as a society would be forever stunted and static rather than curious and dynamic. Learn more about the impact of risk averse culture in the 5 Key Elements for a Successful Innovation Program.

Let’s take the Wright Brothers, for example, and their discovery of flight. Orville and Wilbur experienced their share of setbacks, from one brother (Orville) being expelled from elementary school in his earlier days to aircraft after aircraft plummeting from the sky and to the earth. Refusing to give up on a good idea, however, the brothers continued to build upon their aeronautical knowledge and eventually invented the groundbreaking three-axis control which gave pilots greater control and steering. This method still remains as being the standard in controlling all kinds of fixed-wing aircraft.

The success of the Wright Brothers is not a once in a lifetime story, either. A more modern day example of successful (although initially risky) innovation is that of Uber, a transportation company that, through more efficient processes (that is heavily reliant on a free iPhone loaded with a car dispatch app) and employee loyalty programs (employees are offered enticing discounts on new cars amongst other perks), is dominating the taxi and personal transportation industry in each city it currently operates in. Through the Uber app, passengers can book a ride by smartphone and then track the transportation vehicle on a map as it nears their location. Once the ride’s over, the service compensates the driver from a customer’s pre-loaded credit card. The passenger arrives on time, and the driver is never stiffed pay or a tip.

Not Every Risk Is Worth It

While we often hear these success stories about innovation, what we often do not hear about are its failures—especially where these failures may hit us the hardest, such as in our professional lives.

For instance, did you know that:

Risk runs rampant in business, especially when it comes to innovation. The definition of innovation itself implies risk: the value of the innovation comes from the execution of a new idea, with the key word being “new.” New ideas are things that have never before existed, meaning there is no previous data available to help prove its worth. Yes, other similar data may exist which can help us make loose predictions or models, but it is impossible to take everything into consideration when trying new things or implementing new ideas. As a result, some risks will inevitably result in failure.

Reducing Your Risk of “Taking a Chance”

Here is the good news: you can minimize the risk of investing in wrong ideas. At SoapBox, we believe in the power of communal support. On several occasions we have witnessed organizations pursue ideas that were reinforced by the support of the community. By asking a community of individuals to vote on plans, organizations can make better informed decisions about their existing and future plans and strategies.

But the value in community goes beyond feedback and reinforcement. Your community is what will give you the insight to stay a step ahead rather than fall back. Saint Elizabeth proves to be a great example of community in action, with the insight provided by frontline staff leading to a better flow of information between frontline employees, management, and senior leadership, which ultimately lead to better strategic organizational planning.

As human beings, we are conditioned to fear the unknown. But what many fail to acknowledge is that we are built to embrace the unknown as well. With just the right blend of logic, suspicion, community, and information, any organization can turn what may seem like a “risky choice” into an innovative game-changing idea.

image credit: Shawn Carpenter
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  1. Nce article. As specialists in delivering solutions to address uncertainty and risk for companies that make large investments in R&D, New Product and Development and innovation opportunities, our mantra for decades has been “there are no facts about the future.” Unless organizations realize that they cannot accurately predict future sales, profits, market acceptance, etc., they will continue to have many failures. Several years ago I wrote a paper on Forecasting under Uncertainty – if you would like a PDF copy, I’ll be pleased to send one to you but need your email – I don’t think I can attach a PDF to this message.

    The estimate of project failure is pretty low relative to failure rates of new products. Even a company as competent as P&G sees a much higher failure rate, said its CEO Laffley several years ago “..only 15 to 20 per cent of our new products succeed.” You can only win in the long run by managing a portfolio that balances risk vs. return; some will win and some will lose but in the long run you will be more successful.

    Innovation faces many hazards on the way to success. As for truly disruptive innovation, while many talk about it, it is extremely rare; don’t bet your house on it.

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