Last week, we explored the inextricable role that failure and risk play in innovation. But how do companies find the balance between pursuing innovation, mitigating risk and maintaining revenue growth?
Evolving out of ongoing research from Pierpont’s Endowment with the Moody College of Communication at the University of Texas at Austin, here are the top three things innovative organizations do to pursue innovation without opening their business up to too much risk.
Pursue Innovation in Small Bites
To mitigate risk, panelists recommended using agile methodology – exercising all-in, two-week sprints to complete a new project or experiment. That way, if a project fails, organizations have only lost two weeks (instead of months or even years) of time. Requirements in this process are a) having a deliverable at the end of the sprint, b) having buy-in of key executives at the outset of the project, and c) keeping an open mind about the final deliverable of the project.
When pursuing an innovation project, it’s crucial that companies stay flexible and open-minded throughout that exploration process – as outcomes of innovation projects are often very different than what is envisioned at the outset. Participants warned against “hand-cuffing yourself” to firm KPIs at the start of a project, but instead recommended constantly measuring, evaluating and adjusting course. Maintain a fresh look at what you’re working on to not inadvertently dismiss novel approaches and ways of doing business.
Many innovative ideas fail because management becomes preoccupied by inevitable business distractions and either starve or prematurely kill an innovation project. Managers should also avoid the tendency to micromanage or preemptively change direction on a project from a top-down decree, which can hinder outcomes.
In our next article, we’ll dive deeper into how companies engrain the pursuit of innovation into their work culture and team dialogues through storytelling. Stay tuned to our Sparking Innovation page to learn more.