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How Can The Risks of Innovation Be Addressed?

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Change, whilst inevitable, often brings fear. Stepping into unfamiliar territory to embrace the different, the unknown, is usually an act accompanied by apprehension. It’s easy to forget that our ability to adapt has kept our species alive, and dominant, for millennia. We mere humans have positioned ourselves squarely atop of the food chain through our willingness to experiment, to trial, to pivot, and react to the world around us; threats, opportunities, strengths, and weaknesses. So why is it so hard for businesses to embrace the process of change? To face the risks of innovation?

Whilst it’s not literal life and death that spurs many companies, we still face the ever-present challenge of adaptation and “survival of the fittest” in a professional capacity; we must still decide to “Modernize or Die”.

To take this leap and successfully embark on a journey of strategic innovation management, we must first identify, then manage, the risks associated with this process. Herein lies the rub; we don’t always know what the risks are. Each innovation initiative is different from the last one; the people, processes, technology, problems, and solutions may vary. With a seemingly infinite number of variables to consider, assess, and try to manage, it can be hard to know when to start. In the face of such ambiguity, it is no surprise that 72% of executives say they’re not out-innovating their competitors.

So, how can the risks of innovation be addressed? We’ve collected some practical tips to help you understand and manage the risks of innovation. Before you jump in, look inward at your organization’s behaviours, attitudes and strategy – and learn how to influence this to stimulate a successful culture of innovation.

1. Appetite for risk

Begin by laying the groundwork for successful behavioral change; give your people the permission to change. Active, visible, and engaged leadership is a core component here. Your people need to feel like the business will look out for them; that there’s a “safety net” in place for their innovation. People that don’t feel supported won’t share their ideas. No ideas, no transformation!

2. Celebrate the process, win or lose

This one’s especially important for companies starting out on their journey of innovation. Make sure you reflect upon, celebrate, and share your innovation progress. Whether or not you achieve the outcomes you were hoping for, the real value early on lies in the fact that people have tried. By engaging with the process and executing change on a personal level, your people are trusting in the process. Don’t let them down by failing to celebrate their efforts. Rewards and recognition are essential.

Recommended read: What is a business case?

3. Connect innovation with execution

In the wise words of Thomas Edison, “Vision without execution is just hallucination.” These are words to live by. A bag full of great ideas is great… but if you don’t have a process in place to realize them, you’ll have utilized a lot of time, effort, and resources to come up with concepts.

how can the risks of innovation be addressed

To make sure you maintain credibility within the organization, and to ensure people keep returning to share more ideas and support future efforts, it’s crucial that you consider your execution methodology ahead of time. To ensure you have the key support you need at that point in time, you should consider:

  • Time – how long will this take to implement?
  • Cost – how much do we need to invest?
  • Effort – who, and how much, do we need?
  • Sponsorship – who’s the driving force behind this within your organization?

This last point is important – understanding the power of sponsorship and leadership is a must-have for any Innovation and Project Management Team. These sponsors can mitigate risks and help with contingencies by unlocking extra support on your journey.

4. Ideate, Validate, Scale

For mature innovation capabilities, iteration is the name of the game. Develop a framework to easily propose, test, and confirm your hypothesis, before looking to propagate and scale across your organization.

Your Innovation and Portfolio Management Office (IPMO) is an essential component of this model.

5. Balance your innovation portfolio

You’ve got a lot of plates spinning. Each plate comes with an inherent risk, opportunity, required investment, and necessary resourcing. For a simple start to prioritization, use the innovation horizons model to know where to play. Your innovation portfolio should span each of the different horizons; incremental (low risk), adjacent, and transformational (high risk), based on your innovation strategy, innovation budget, and appetite for risk.

If you don’t balance your portfolio, you may find unequal investment in one horizon leads to a failure to realize returns; this will damage long-term credibility and curtail the number of future ideas you capture. As before, no ideas, no transformation!

Hear more from Noel Sobelman on Dynamic Innovation Portfolio Management

Summary: How can the risks of innovation be addressed?

How can the risks of innovation be addressed?

You can stimulate a culture of innovation by:

  • Developing an appetite for risk
  • Celebrating any progress
  • Connecting innovation with execution
  • Iterating
  • Balancing your innovation portfolio.

It takes time to build momentum and support for innovation. It is, and always will be, risky business. With the right people, culture, and processes around you, navigating these uncharted waters can be smooth sailing.

Still not sure where to start? Take the edison365 Innovation Preparedness Assessment to get more insight into your strengths, weakness, and opportunities.

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Like to know more about our innovation management software, business case platform, or project management tools? Head to our homepage to book a meeting with our team.

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