HOW TO MANAGE THE RISKS OF INNOVATION.
At the crux of it, innovation is about doing something new. We all want to revolutionize the status quo, to create a new ideal, to be on the cutting edge of the next big thing — whether it’s completely breakthrough, new-to-the-world technologies that are changing the paradigm of how we live, or simply applying something ordinary in a way that has never been done before. The double-edged sword of being the first and foremost, however, is that this exciting leap into uncharted territory often comes with a tiny little snag: the significant risks of innovation.
But while it’s impossible to completely eliminate the risks of innovation, you can certainly mitigate them — the risk to your business, your client’s business, and the overall well-being of your idea — through an approach to innovation that’s grounded in research and cross-departmental collaboration.
LOOK THROUGH DUAL LENSES
To soften the risks of innovation you’re shouldering, think about examining your product through internal and external lenses.
The External Lens:
The external lens is market-centric and focuses on consumer desirability (i.e. is there an audience for this product? Is it filling a need, want, or pain point for consumers? Will consumers actually want it?) The answer you’re looking for is “yes” — and to arrive at it, you need to conduct the necessary market research to back up these claims.
But even in research, there are risks. Sample sizes can be too small, markets may not be sizable, etc. The key is to use a combination of qualitative and quantitative research. By starting with deep qualitative research, you can unlock the underlying “why” behind user needs — why these needs exist, what is currently being done to solve them, and the challenges consumers might face with other products and services in the marketplace. This type of research informs new product development, which can be backed up with quantitative research to increase confidence you are on the right track, and then iterating on those initial concepts to ensure a product both appeals to and fills a need for your consumers.
The Internal Lens:
In addition to analyzing an idea or product from the external point of view, managing risks of innovation also requires you to look internally, and consider two main components: technical feasibility (Can it be made? Does the technology needed to manufacture the product exist? Can it be replicated on a large scale?) and business viability (Is this product relevant to our business? Are we the best people to execute this?).
These answers come from your team, and it brings to light the importance of getting various departments involved in a project —researchers, engineers, marketers, procurement, sales, etc. — not only for the key engagements, like a final deliverable but throughout the entire product development process. When you get everyone involved early on, they can weigh in on the key risks of innovation, like manufacturing capabilities and business goal alignments. Then when you get further down the line, they already have a deeper level understanding of the project needs and are better able to help inform key decisions during the product development process.
With all things, there’s a balance to be had: you don’t want to rely solely on the input of those who may be overly pragmatic and fearful of pushing the limits to try something new, nor do you want to rest on the input of someone who is enamored with a new technology but doesn’t consider its value in solving the needs for the customer.
CHECK IN ON THE CLIMB TOWARD SUCCESS
A great way to maintain that sense of balance and plan out your journey from idea to execution is by setting checkpoints along the way. The purpose of these checkpoints is to stop and review where you are in the process, what your partners are thinking, and ensure you’ve set the correct trajectory. In the event you’ve gotten off track or reach a previously unforeseen dead end, this technique will keep you from having to start over at square one.
A good way of thinking about this is to envision yourself as a climber trekking up the side of a mountain. You could speed to the top, not taking the time to properly tie-in and strategize your steps, but if you make a misstep then the resulting failure is much larger — you fall all the way back to the bottom. Instead, there’s value in going slower and setting anchor points to catch you, checking your path, creating safe points as you go. In innovation, that’s a process of checking in with your research partners, refining designs, listening to consumers and validating points along the way. What you gain from the slower and steadier approach is assurance that all pieces are in alignment, so you can then confidently move to the next stage.
If at any point you check in and you’re off-track, you can move back to the most recent validated point and make adjustments before moving forward in a different direction, without much time or investment lost (and without jeopardizing the progress of your entire project). The process of slowing down to gauge your progress doesn’t have to be lengthy — it’s often about just pausing briefly to run a test of a component or design.
CHOOSE YOUR OWN RISK
Risk is at the heart of innovation; it’s a part of the game! Moving forward means inherently accepting some hazards. The size of these risks, whether they are career-changing, market-flipping, disruption-causing changes or smaller tweaks to an existing product to make it better and more delightful for the consumer, is ultimately up to you and your team. Either way, you’ll adopt some risk. In fact, you’re taking on risk whether you’re moving forward or standing still — opting to not innovate and to continue with the same product, the same idea, same processes and procedures can be a risk in and of itself. Sometimes current products are stable, or maybe slightly declining, and if you don’t figure out ways to either reinvent the product itself or reinvent the brand to mean something new, you could easily fall behind the competition. It’s easy for a company to stick to what they’ve always done and the way they’ve always done it, but sometimes you need to look to larger trends or new business models to ensure you’re remaining relevant and on par with your competitors. Ultimately, the decision to create something new or remain in your lane should be an informed one, rather than based on fear or lack of understanding of what’s out there.
Luckily, by carving out a plan of checkpoints and loading your team with informed participants ready to think outside the box while still coloring between the lines, you give yourself the allowance to dream and ideate, and with a little courage (and a lot of planning) open the door to what’s possible tomorrow.