Fostering innovation: Risk management is an added value, not a deterrent!

All type of companies, be it startups or those running like well-oiled machines, face challenges at every step if there is no new innovation that can keep the business afloat.

A new idea is what keeps the market ticking today and this is exactly what keeps the companies abuzz too. In order to keep the momentum, companies deem it important to innovate or make space for ideation and innovation, as often as possible.

But as vibrant as innovation is, as an idea; it is a double edged sword too. What if the new innovation ruins the reputation the company, which it has built so far in the market? What if the rival gets better? Is it feasible to tread the familiar ground over fresh one?

Innovation can be company’s most powerful tool and a key driver to add value to the company but it is also imperative to have a responsible risk management approach towards innovation.

Big companies often opt to leverage new ideas by mixing them with traditional approach, and hence considerably reducing the risk of having to put all the money on a single new horse called innovation.

Because today, every large company manages risk of innovation. But all too frequently companies sometimes become so risk averse that initiative and innovation become paralyzed.

In a typical start-up set up, risk management isn’t a big deal. The team is small, the ideas are vibrant, the market share is pretty fresh and turns quite an accomplishment when the company makes a dent in the niche segment. But, innovation turns a risk when all this becomes a pattern and success somewhat becomes a habit to the extent that it creates insecurity.

A common impediment to manage risk of innovation is the existing corporate culture that overly celebrates and rewards success. This also adds to the insecurity surrounding the idea of failing, or not meeting the target with a new attempt.

Some of the most important lessons on risk management pertaining to innovation in order to encourage new ideas flowing and creating new spaces of competition, can come from venture capital firms. They can provide pointers to some important lessons for large organizations that want to further the innovation.

In actual terms, risk management pertaining to innovation isn’t about applying brakes; but about accelerating the cause.

Risk management has to be treated as a learning process; and it does not just propel the innovation further; but also can add momentum to the whole concept. Sometimes new and innovative methodologies can be adopted to make an innovative idea go further, and carve out a niche segment in the market for new ideas and products.

The right kind of risk management for innovation is not just built for comfort; it is also built for speed.

The norms and metrics of core business will reveal new leaders in the business which will in turn determine who will clinch the future markets. This is a tough game, a difficult one to play with all stakes heavily staked against all that is considered ‘safe’; but then, business never belongs to the ones who want to play it safe. Future is about making roads, and not about treading the safe path.

Having risk managers, someone who is dedicated to the cause of easing out the process of innovation while the company treads from one space to another, would be a great idea. The job of the risk manager, can perhaps be that of managing the process of innovation without letting the heat bother everyone in the line.

Risk manager will probably play the counsel who will shift the attitude of the management and employees from negativity or skepticism to positivity, making sure everyone is sailing on the same boat; or that each one is on the same page as everyone else.

This can also play a very imperative role in managing risks for future; and at the same time paving way for future innovations too. Because, when a company learns to accept and test new ideas, the ground is being prepared for more such adventures which can make the road ahead interesting for everyone and encourage them to think out of the box. Now, history has taught us again and again that the future belongs to those who see a ray adorning the horizon.

Innovation management and addressing the risk that crops up in the meantime, can be a great ice breaker for the company that works in all honesty with its fellow travelers who happen to be its employees. This would only mean the company would have turned the employees into equal partners in its future and this will only aid positive growth for everyone who is in it together.

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