Estimated reading time: 7 minutes
Innovation strategies, there’s no way around having them. If you want your team to innovate, you must support them to take risks. How do you encourage risk-taking while still looking out for the financial security of your business?
Unfortunately, the balance between risk and security tips is too far either way in many cases.
Too much emphasis on security and fear of risk and change: the encouragement of innovation ends up looking tokenistic if you don’t have innovation strategies in place for implementing new ideas.
Too much liberty with risk-taking: you can cause serious commercial or financial damage.
The answer is to have a process in place that helps you articulate and quantify risk versus goals and outcomes.
It becomes much more manageable and predictable once you start seeing innovation through this process-driven lens. The result is a healthy culture of risk and innovation, solid growth opportunities, and reliable outcomes.
The following process has been designed to balance and manage risk effectively so that projects have the best chance of success.
There are twelve steps altogether, divided into four sections.
Innovation Strategies Groundwork
1. Identify the Issue and Related Innovation
This may come from internal review processes, or a team member brings to light an area that could be functioning better.
You must identify the key stakeholders in relation to the proposed change. You must get agreement from the stakeholders as to:
- what the broad issue and all related issues are
- why innovation is required
- the context within which innovation will be implemented
2. Assess Key Risk Areas
To carry out this assessment, you should look at four different categories:
Historical roadblocks: Have similar attempts at change been attempted in the past and failed? Are those roadblocks still in place?
Finances: What are the likely costs of implementing the project or change? Can the business bear these costs?
People: Do you have the right people to assess, implement and monitor the innovation? If not, do you have a strategy in place for finding appropriate people? (e.g., paying an external consultant)
Timing: How will the timing of this change play out? Do projected timelines fit well with your business cycles, seasonal demands, and the individual workload of the people involved.
3. Assess the Business
Is the business in the right place to embrace change? This will depend on the culture and attitude towards change in your business.
In some cases, businesses are change-ready and change-prepared. In others, you may know already that you will face resistance to change.
Are strategies in place to handle resistance so that all team members are on board in the most positive frame of mind?
What else is happening in your business right now? Are there other areas where change or risk is taking place? Is it the best time to implement change?
4. Act Now on Points 1 to 3
We put this in as an extra step because you must act on the above assessments. It is at this critical stage that so many projects fail.
Even if – as you will see in the case study below – things seem to be going along smoothly, without a rigorous assessment at this point, you might miss critical factors.
Make any necessary decisions about how and when to proceed and any additional resources (e.g., budget, personnel) that you will require, and have these in place before moving on.
If you’re satisfied everything is in place, then you can continue.
Projections and Contingencies
5. Determine the Impact
What is the likely impact of the change across all areas of your business? Carryout estimates and projections in each regard, from financial to sales, staffing to operations.
6. Rank the Risk Elements
This step will inform the blueprint for your innovation strategies plan. It requires you to articulate specifics around each area of risk.
While it takes some time, you must never shortchange this step as it will pay huge dividends in the long run and save you both time and money.
Rank the risk of each area (an excellent scale is 1-5, with 1 being no risk and five high being extreme). It would help if you ranked each area against:
- short term possible outcomes
- short term desired results
- long term possible outcomes
- long term desired results
Then prioritize each risk, including deletion of those you can see are not worth pursuing or that you can see do not carry many risks.
7. Create Workable Options for Every Risk
How can you make each risk translate into a workable option?
Pay attention to those that will make or break the strategy around the innovation and ensure you have a clear, articulated option for each one.
8. Get Champions on Board
Ensure you have champions onboard for each component. They should be in sync with the project as a whole and with each other.
Getting this kind of buy-in and ownership from your team members is essential to the successful implementation of any project or change.
9. Get Co-champions on Board
Don’t rely on a skeletal team of champions. People can feel too much pressure or burn out. Ensure you have co-champions on board who will help implement the strategies.
Their task is also to watch for fall out (grumbling in the ranks or budget concerns) and for people who fall off the radar.
10. Measure, measure, measure
The work that you have already done comes into play here. You should have a clear vision of what you want to achieve with this change from Step 1.
Measure the impact against those three critical areas of Finance, People, and Timing (Step 2) as well as the goals you identified in Step 6.
11. Adjust, adjust, and adjust
Exceptionally few innovations will be perfect at first inception. This is where your workable options from Step 7 will help guide you.
Don’t be afraid to make adjustments. Take in feedback and be robust in your assessment of results and how these impact possible future projections.
12. Maintain High Visibility
Be visible to all stakeholders all of the time in each area of risk. The primary thing that will unsettle staff and stakeholders is being kept in the dark.
Be transparent and inclusive in your review and assessment process.
The following case study demonstrates what can happen when a company fails to go through this step-by-step process.
Case Study: Manufacturing Company
It is all too common to throw a King’s ransom at new and sophisticated technologies that will create smarter business ways.
In principle, this is right, but often in practice, no one knows how to use the technology to its advantage, therefore, leaving many applications unknown, untouched and unused.
Such was the case for a local manufacturing company in Melbourne that wanted to road test some new technologies to save their people loads of time and effort in data analysis of their customers’ habits.
Times were good, and money was not an inhibitor, so the company decided to buy the technology upfront and train its people.
Well, they got the first part right. Buying was easy. Training their staff was not.
It was a costly, unproductive time, and only a few people came away from the training with the skills to fully integrate their work and benefit from the new way of doing business.
It was proven that if people had been better trained on their existing systems, they would have achieved better and faster results.
Had the company done the balanced, step-by-step guide above, they would have averted the massive cost to the business and the frustration to staff.
They took an enormous, unqualified and unquantified risk and ultimately lost money that could have been used to expand their market in international waters.
What are Your Innovation Strategies?
If you have ideas, you feel like sharing that might be helpful to readers, share them in the comments section below. Thanks!
Would you like to contribute a post?