If you ask senior managers whether they encourage risk taking for innovation, most will nod approvingly and answer in one word: "Certainly". In practice, however, things are often quite different. Just ask their subordinates and most will answer they are afraid to try new ideas because of the unpredictable reactions of their superiors. Everyone talks about the importance of making mistakes and learning from them but in reality they are not so tolerant of mistakes and thus employees prefer not to take risks.
This, at least, is according to the Harvard Business Review website, which recently published a number of recommendations on how to let employees take risks "safely" so that there are only "good" mistakes to learn from.
Clearly define desirable risks
Specify fields in which risk taking in order to achieve innovation is and is not acceptable. Unacceptable areas may include financial results or commitments made to customers. The acceptable might involve new ways to solve customer problems. Be specific in the timing of risks (e.g. certain progress within a few months) and financial impacts (e.g. potential to generate a certain profit, maximum costs etc.).
Choose the right words
Your choice of words will support the overall culture in your team. Focus, therefore, on making your culture more open to risks: instead of successful/unsuccessful project, for example, you can say experiment or scouting mission.
Focus on small and quick steps
Risks for innovation should not be anything big. Smaller and faster experiments are more successful. Generally, better innovations originate in small teams and companies with flatter management structures.
Divide projects into sub-phases
Support risky innovative projects in pre-specified phases. If the outcome of a phase demonstrates the project's potential, support the project even further. If the tested ideas prove to be wrong, stop your support.
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