Innovation is creativity and taking risks

What you need to know:

  • Since the willingness to take risks can easily decline in a tough economy like ours, it is critical to let team members know that failure will not result in punishment.
  • While failure might be frowned upon, it should also be seen and recognised as a learning experience, the cost of creativity, certainly not as a failure or mistake.
  • To the Kenyan firms — cognisant of today’s pressures in terms of time, budget, and other constraints — manage risk without letting fear of failure kill innovation.

It is impossible to realise innovation without taking a certain amount of risk. In a world where the success rate of new products entering the market is low, it is inevitable that every success sees some amount of failure along the way.

An effective innovation leader should thus encourage creativity and risk-taking, while also practising tolerance for failure.

Do you invest in innovation? Do you celebrate failure and risk-taking? Do you allow for time for research and development? These are pertinent questions that you should ask yourself in order to foster initiative and innovation.

Since the willingness to take risks can easily decline in a tough economy like ours, it is critical to let team members know that failure will not result in punishment.

Nothing exemplifies this than a recent survey involving firms in the 2013 Top 100 Survey. Asked whether a manager is punished if he/she takes a risk and fails, a whopping 70.2 per cent of the respondents answered in the affirmative. Surprisingly, when a similar question was posed to respondents in a 2013 study of Indonesian SMEs in the furniture industry, only 44.5 per cent of the respondents answered in the affirmative.

This is indicative of the risk-taking proclivity of a firm, and the results show a higher appetite in the Indonesian study than in the Kenyan one. While the scenario might be understandable in the Kenyan context, it also has the effect of negating the spirit of entrepreneurship among employees.

The environment is also indicative of the rate at which innovative initiatives take place in a firm.

A strong leader practises failure management by setting and agreeing on the risk-taking bandwidth or budget. While failure might be frowned upon, it should also be seen and recognised as a learning experience, the cost of creativity, certainly not as a failure or mistake.

The following are simple steps to develop a failure management plan that will lead to a culture of sustainable innovation in your business.

First, clearly communicate the risk profile you are asking your people to adopt and state why it is important to the organisation’s success; this limits your potential loss while opening up the floor for creativity and risk-taking.

Second, never allow an unsuccessful risk to hamper a team member’s opportunities and advancement. Indeed, a culture of innovation depends on trust.

Third, create and communicate the results of an award programme created with a high intraorganisational profile to reward risks that pay off.

The fourth step involves establishing a formalised, non-accusatory process for harvesting key learnings from unsuccessful risks. Distribute these lessons learned, key being that all risks, whether successful or not, contribute towards the end goal.

Lastly, give your people the situational risk assessment tools they need to help them improve their risk-taking decisions. This can include risk-scoring systems to identify different levels of risk and ways to deal with adverse situations as part of a preventive strategy.

To the Kenyan firms — cognisant of today’s pressures in terms of time, budget, and other constraints — manage risk without letting fear of failure kill innovation.

This might just accelerate your jump into the Club 101 league.

Dr Ndung’u is a technology entrepreneur, consultant in innovation, and the CEO of Extra Insight Ltd. [email protected]