Fear of risk is one of the greatest barriers to innovation and intrapreneurialism. Risk is a term that strikes fear in the hearts of many leaders – especially those who consider themselves to work in severely risk-averse contexts. However, taking a risk is NOT about being irresponsible, naive or reckless. Calculated risks still require due diligence.
If someone thinks it is risky to innovate, think of the alternative. Today the riskiest course of action is to NOT innovate. That is a direct route into irrelevancy. The world is changing too fast to keep playing it safe.
Risk Aversion Can Create More Risk.
Over the years I have done a lot of work in government which has traditionally has been a highly risk averse environment. Michael Barber, in his book How to run a government: So that citizens benefit and taxpayers don’t go crazy[1], points out that very often a bureaucracy’s reaction to risk makes them even more vulnerable.
‘The instinctive reaction of a bureaucracy to a problem or a crisis is to become more cautious, more risk-averse. Ironically, in an era when change is as rapid as it has become in the early twenty-first century, this reaction ultimately adds to the risk of failure rather than reduces it.’
Clearly we need a new way of thinking about risk. In risk-averse cultures here are some things that leaders can do to mitigate risk while still innovating. They can:
- Focus the innovation efforts and be very strategic about which ideas are selected, groomed and implemented.
- Use evolutionary rather than revolutionary innovation. In other words, move forward in iterative cycles rather than taking a huge leap of faith into unchartered waters.
- Run pilots and experiments. Figure out what works and what doesn’t and then scale up. Adapt and iterate.
Reframing risk in this way can help unleash the entrepreneurial spirit in you and your team.
Leaving academia to start my own business back in 2005 was a huge leap of faith for me. I felt like Alice in Wonderland who had tumbled headfirst down the rabbit hole to emerge in a world in which everything operated under different rules – a parallel universe, an alternate reality. Every day was a steep learning curve. Very quickly I had to learn to change from thinking like an academic to thinking like an entrepreneur. But amidst all the change, I also felt tremendously empowered. Perhaps it was the realisation that whatever the outcome, be it success or failure, the responsibility rested squarely on my own shoulders. It was worth the risk.
I’d love to discuss this concept with you, or any other aspect of leading innovation and intrapreneurialism. Book a time to chat with me below.
Make a time to chat with Irena
Talk soon.
Until next time,
Irena.
Dr. Irena Yashin-Shaw
Director
M: +61 411 330 301
P: +61 7 3849 5003
[1] Barber, M. (2015). How to run a government: So that citizens benefit and taxpayers don’t go crazy. London: Random House.
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“Dr. Irena Yashin-Shaw has cleverly captured the future of leadership in this ground-breaking book. She shows how creative and enterprising individuals – INTRAPRENEURS – are transforming their organisations from the inside out. A must read for leaders aspiring to unleash their inner entrepreneur to change the world.“
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