RISK is the Barrier to Innovative Thinking
Updated: May 6, 2019
In this current global environment of change and strong competition, it is interesting to reflect on what stops companies moving into the innovation space. New ideas and new opportunities are exciting and stimulating, but there is often a reluctance to give up one’s current perspective. What is the stumbling block to embracing innovation?
Are you willing to give up who you are for whom you could become?
One of the key barriers, as I have mentioned, is the attachment we have to our current business model—-the way we’ve always done things. Change involves risk, often capital expenditure, and a questioning of the current system, which can be threatening. Within your business are a wealth of ideas with your employees and stakeholders. Do we access these ideas, and make a commitment to explore them? Is there enough information available about the business to offer ideas of value?
Our customers too provide a rich source of information. Do we spend time exploring their needs or requirements and the gap between that and our service?
The RMIT Activator Enterprise insights Survey 2017 of 533 business community members found that among businesses there was a high awareness of what needs to be done but a lack of motivation to invest time and money into it. Steve Glaveski* suggests that companies have a short-term focus, rather than laying the foundation for longer term wins. Innovation needs the longer-term focus, with Return on investment low during the development phase. Often too, Managers can be process driven and use traditional accounting measures for evaluation, rather than allowing for the gestation of the innovation initiative.
Stanley Mason, who worked for the American Can Company invented the disposable diaper (nappy) in the 1950’s, among around 100 other inventions. The CEO called him in and said that there was no market for the disposable diaper and promptly fired him. The market now is worth $52 billion US globally! Companies are into risk mitigation and threats are something to defend against rather than the opportunity to explore. Efficiency and predictability take precedence. Clayton Christensen suggests that Values, Resources and Processes need to be perfectly aligned to support innovation. Yes, there is light at the end of the tunnel!
My next article willI explore factors that facilitate innovation, and leadership qualities to generate an innovation culture.
Creating conditions for sustainable Innovation, DDI Research, Sinar, Wellins & Pactone. RMIT Activator Enterprise Insights May 2017 Innovation Manager’s Handbook Steve Glaveski.