< Risks in Innovation
Innovation Weekly.com 11 Oct 14 enhanced by Peter/CXO Wiz4biz
Why? Most organizations are under constant pressure to “grow or die”. In my industry, (consumer packaged goods), that means the need to launch new products (or variations of the originally products) periodically. A great deal of energy, effort & expenditure is applied to keeping Customers healthy & happy, by ensuring there is “new news” of applications or products, to engage them and attract more Customers.
> Greater Returns require > Greater Risks. An innovation offering can’t be comprised solely of these lower-risk, easy-to-do initiatives. Aspire to greater returns & markets –leading opportunities from bigger, further-out innovations – those innovations that move the business into adjacent categories, leveraging assets & capabilities – or further still into the future, with disruptive opportunities. But developing these kinds of propositions proves to be very difficult. The level of complexity and range of unknowns can make these bigger innovation opportunities feel quite risky, and leaders are often squeamish about allocating scarce resources and funding to initiatives with higher levels of ambiguity and uncertainty of return [ROI].
Managing uncertainty & minimizing Risk. There are ways to manage the uncertainty & “perceived” risk associated with enhancement or disruptive innovation. The task involves planting “seeds” to minimize risk, and it has four key steps
1. Forge a team with unique skills
2. Drive integrative thinking
3. Design smart experiments
4. Ensure stakeholder alignment up front
Seeds of Innovation. In planting seeds, it’s important that the soil be prepared well, and that the basic necessities (warmth, water & nutrients) be provided, if the seed is to have any hope of growing. And of course, it’s hard to tell early on which seeds will germinate & grow, and which will die underground. Seeds grow at different rates, and some of the weaklings need to be weeded out to make room for the heartier ones. The same is true of a portfolio of truly innovative ideas. Seed ideas compel us to think in organic ways about growth opportunities: conditions need to be right, then we come to expect that only some of the seeds will evolve into outstanding market offerings. Four key steps to reducing the risk:
#1 Forge a Team with Unique Skills. If you remember back to Apple’s first “Think Different” TV Ad in 1997, it opens with these words: “Here’s to the crazy ones: the misfits, the rebels, the troublemakers, the round pegs in the square holes, the ones who see things differently.” Breakthrough innovation needs an infusion of fresh & different thinking, and it benefits from the quirky personalities, those odd people who bring unique points of view and ways of thinking to projects. It’s tempting to compose a team of subject matter experts, those most experienced in the various cross-functional disciplines that innovation demands. But a few “wild cards” will provide the inspiration and stimulus needed for the team to push beyond the obvious solutions to the innovation challenge. That is why I seek team members who are insanely curious, who have diverse, interests and who intentionally collect new experiences. I want individuals who possess an unusual capacity to take the filters off, to pull stuff from the background into the foreground, and vice versa.
[ #2 Drive Integrative Thinking, #3 Design Smart Experiments, #4 Ensure Stake-holder Alignment Up Front, in Premium Content ]