Risky innovation or innovation at risk?

Experience shows that companies (and people) tend to avoid risk at all costs which means it’s difficult to leave the comfort zone and do things differently. The problem here is that risk, and the reward that comes with it, is an inherent part of business success be it in innovation or in day-to-day decision making. Knowing this it should be easy to convince people to innovate, especially since the opportunity cost of not doing so is greater than risking failure once or twice.

Even though people recognize they are not taking care of their business in the long-term this doesn’t mean they will change their behavior. This leaves us with the problem of explaining why there is a need to invest in something that only brings benefits in the distant future. As an aside, we previously explored this topic in the previous post: Innovation In Times Of Crisis.

How do we convince others to innovate knowing that on average one of seven innovation projects are successful? There is only one way: to show that the opportunity cost of not doing anything will increase as time moves forward and eventually outpace the risk of failing. As Gijs van Wulfen points out in his post How to Convince your Boss to Innovate, a “faster changing world confronts us with the fact that in the long run we cannot survive on doing the same things better and cheaper. Sooner or later there will be a market meltdown.”

Therefore, or you move forward or you die.

The problem is that we live in a world where failure is severely punished and not succeeding is seen as a weakness. If it is better and safer to be an average performer than a challenger (with the risk of failing), no one will dare challenge the conventional way of doing things. The solution here is to embrace failure and provide recognition to those who try.
Everyone makes mistakes but the best way to learn is by trial and error. Those who have already tried and failed will probably not repeat the same errors again (unless they are feeling particularly masochistic) while those who have never tried are not even aware of the pitfalls on the path to success.

Typically the prospects that better understand the value of our model and are ready to succeed are those that have already tried, discovered they were missing something critical, and sought professional expertise. Those that have never tried to innovate are consequently unaware of the pain of failure and are not fully aware of the benefits of an expert provider. Most of the time these companies think it is possible to do it all by themselves without leaving their comfort zone. Success, they’ll find, is hard to come by with that mentality.