As you may already know, I am a strong advocate for innovation and believe it to be the backbone of any successful endeavor – whether it applies to your business or your own life. However, innovation is – by definition – risky. New ideas do not always turn out to be good ideas. And now with the economy the way it is, tightening budgets kill innovation because no one can afford any risks.
Yet, without innovation, we end up stagnating – always playing it safe without ever advancing. I’ve always looked for areas in my company or my life that could stand withstand a little risk in order to find better ways of doing things. The trick is to manage your risks. You can optimize innovation to gain great new ideas while minimizing the effects of bad new ideas by following these steps:
- Evaluate Risk-Taking: How often do you or the people in your employment take risks? Take an honest look at your business by holding interviews, skip-level meetings, or anonymous surveys to gauge risk aversion. You may realize you have created an environment where people feel anxious and hold back ideas.
- Open a Dialogue: Invite anyone into an open dialogue where they can share their ideas, voice their concerns, give feedback, and present ideas without fear of judgment or retribution. Encourage people to invest in the outcome of their own ideas.
- Micro-Experiment: Taking a big risk can put your business on the line, but refusing to take any risks means you’ll never find ways to grow. Instead, identify small risks that you can afford to take in an area or part of your business where growth is needed. Conduct a series of rapid-cycle experiments to test new ideas.
- Evaluate Risks: The best thing about taking a risk is that even if it fails, you still learn something from it. Evaluate your risks, identifying what worked, what didn’t work, and why. Make it explicit that failure is acceptable for risk-taking as long as it is learned from. This will help you fine-tune your strategy and take smarter risks during the next cycle of innovation.
Are you averse to risk? What are some of the best ideas you’ve had that were originally very risky and how did you manage these risks?