May 11, 2017    4 minute read

Innovation: Managers Must Be Persuaded to Take Risks

Finding Common Ground    May 11, 2017    4 minute read

Innovation: Managers Must Be Persuaded to Take Risks

Innovation is a tough nut to crack on the best of days. Before coming up with and doing the actual innovating many people stumble at the first hurdle – such as simply getting the approval to do new things. It seems that employees within firms are perpetually complaining about the lack of support they get for their innovative ideas. However, is this correct or slightly unfair?

Innovation fails for many reasons, but one of the most frequent is that most people fail to get sign-off from senior executives due to how the activity, idea or process is framed, presented or rationalised. After all, who would sign off massive amounts of money and resources on an idea that is poorly presented to them?

Understanding a company’s relationship with risk, biases and reasoning will help firms and entrepreneurial employees increase their odds of getting a ‘yes’ and pushing ahead with their next innovative project.

Innovation Means Taking Long Punts

Most innovation remains a calculated punt in the dark, otherwise, it is usually not real innovation.

Risk itself makes people both excited and nervous. The excitement usually starts and ends with rollercoasters, but the nervousness stays with individuals and often increases as big life events happen.

Most people tend to get more risk-averse the older they get because they have more to lose. Senior management is no different. This is merely a natural safety mechanism to protect oneself from harm, whether physical, emotional or economic.

Understanding this is critical when framing an innovation proposal to a manager.

‘Disruptive Technologies’

The importance of managerial approval is not lost on the wider corporate and innovative industry. The book ‘Disruptive Technologies; Understand, Evaluate and Respond‘, shows that the emerging technologies of today and the ones that will be built on top of them will always require guts.

While the book focuses on the practical side of technologies such as blockchain, 3D printing, artificial intelligence and holography, it goes beyond the technological and discusses the practical aspect of evaluating any technology and getting managerial sign-off to test and learn.

An Example of Approaching Management

While there are many techniques to be found on this, one technique highlighted by Lisette Howlett of Sandler London and in ‘Disruptive Technologies‘ focuses on the mindset of developing that managerial support through the idea of selling today and educating tomorrow.

Creating a slew of materials up front is often a terrible idea because these materials might not address what is needed by the decision maker. Instead, and this would definitely take practice and courage, management ought to be interrogated for their commitment to the project. As with CEOs trying to obtain their employee commitment to a major business transformation, innovators must get their bosses to commit to a decision, which may be an optimistic yes but also a fast no, thus ensuring that anger or regret is not allowed to build.

Perhaps this would require focused and open questioning along the lines of:

  • Tell me about the last project you tackled like this?
  • What would you need from me to see to support this?
  • Would else would you need to see to be satisfied?
  • Similar projects have cost between X and Y, what end would you be comfortable spending?

The last one is a game-changer because it gives a real idea of exactly how committed management is. If a low figure is given, an employee should continue to question to see whether it can be increased.

Otherwise, one should simply explain that you recommend the company continues on its current path and see if better results occur naturally. It is surprising how often this sparks something inside people; ultimately, managers know that things are unlikely to change without action.

Concluding Remarks

Research shows that most people rank others’ risk-aversion higher than it is. Additionally, previous poor experiences with innovation lead employees and individuals to have a false sense of the level of acceptable risk for most businesses. This kind of information is crucial to any business and allows them to challenge their assumptions regarding risk-acceptance.

It is also advantageous to know before an employee an effort to ask for money, complete with a plethora of charts, projections and figures designed to impress management.

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