When did we lose the appetite for risk? Innovation is suffering badly from our present risk adverse approach. Risk-taking has become threatening, we are all ‘fixated’ on covering all the downsides of risk, looking more at the possibilities of loss and less so at all the possibilities of success
So, we end up with “mediocre work within a mediocre company” yet it was not previously like that. Risk aversion had become dominating and the organization’s leadership was signaling “they were really more comfortable being ordinary”.
How does that square off with “we want to be highly innovative, it is important to us, our growth and delivering ongoing value to our shareholders and to our customers depends on us being innovative”.
A human being has always been risk-takers, otherwise, we would not be where we are today. As a species, we survived because we took risks, but was this because we were threatened? There is a strong argument that we only innovate when we are in crisis, being threatened, either with our jobs, within our organizations when we feel under attack.
It can be so easy to change this risk-averse mentality. It is often amazing how the barriers are unlocked to innovation, within those deadlock meetings when someone at a senior level signals “we can break the rules, we can go beyond our normal comfort barriers, into uncharted waters, it is acceptable, it will be supported”. We can change in seconds; it becomes liberating, exciting, and risky.
We need a shift in risk thinking to help innovation.
Organizations need to work on ways to reduce fear, discomfort, and resistance. To allow for opposing views, seeking out a diversity of opinion and establishing that one thing we all would love to be part of, this is an authentic culture that matches the promise with the reality. Is this so hard?
One that shifts away from conventional thinking to embrace risk and not try to always control but to seek actively experimentation. It is through controlled experimentation we gain our best learning. Equally, experimentation should be at the core of every organization drive to innovate, we accelerate our knowledge the more we attempt something different, proving or disproving is exciting work.
Shaping ideas, taking risks, allowing experimentation, providing tolerance, exploring the unknowns all should be an integral part of innovation. Innovation is risk-taking.
Kouzes and Posner back in 1987 suggested that individuals be encouraged to keep trying despite failures and focus more on the learning from this than just simply from the outcome alone.
They suggested three points as a way forward to improve risk tolerance:
- Choose tasks that are challenging but within the person’s skill level to build a sense of control
- Encourage people to see change as full of possibilities and to build an attitude of change
- Offer more rewards than punishments.
Over time this increases our risk-tolerances, we become progressively more creative in this risk-taking orientation to seek out and push for more innovation. We allow in a greater desire for the capacity to be innovating and how we want things we are working on to improve, to give us a greater meaning within our lives. More purpose, more satisfaction, greater identification.
Provide some headroom for risk
Equally allow those who are willing to take a risk, as their more natural position, the headroom to explore, to push boundaries. Outline the guidelines, expect them to be broken on a few occasions but work with them, talk with them, and talk about what they are doing where ever you can.
Setting out the environment and get yourself expecting. Work towards expecting more positive surprises through your engagement than firefighting the negative ones because you were unaware become engaged in the journey by being fully supportive of the learning points along the discovery path. Do also make sure others above you or alongside you are party to the risks and can equally encourage and support it. Make the climate one where risk is talked about, it is quantified, explored, and examined collectively.
There is a certain thrill in any ride if it has a little edge to it but equally, it is in having a successful finish, knowing what was achieved through that ‘pushing those boundaries’. Risks always need active but positive managing, keeping them within a certain tolerance and clarity of understanding.
Risk needs fostering alongside innovation – they go hand in hand
If the leaders within organizations lay out what they want to achieve, breakthrough innovation for example, and this is clearly articulated and laid out in the governance, the culture and in the environment and linked to the purpose of the organization’s goals, then risk becomes better managed and valued. It is a constant dialogue and exchange so all learn what risk truly means as you explore it in more thoughtful and relevant ways
Risk-taking can come through experimentation, through more open learning and discussions, through testing and push for greater innovation, over time it alters the tolerance levels. These tolerances change over time as more confidence seeps into the way we evaluate and make the betting on the outcome more risk-rewarding. We begin to move back into truly innovating. As I suggested earlier: “innovation is about risk-taking”. They go ‘hand-in-hand’ for developing some new, unknown or unheard-of innovations and theses often come from pushing the known boundaries but in informed ways.
