Risk Management

How to Mitigate Project Risks without Stifling Innovation

Unless you have Dr. Strange’s time reversal magic, it is impossible to innovate without incurring risk. This means that risk management—perhaps enterprise risk management—should factor into all innovative pursuits. Risk management is required not just to mitigate the damage of mistakes but also to maximize value opportunities. In has in fact been shown that “Enterprise value that can be lost through an ill-conceived move can exceed the operational costs of the mistake many times over.” So in an article for TechRepublic, Moira Alexander touches upon a few things you can do to control project risks and find the full value promised by innovations.

Directing Innovation

A good place to begin with innovation is customer surveys. When you understand customer desires and attitudes, it provides a starting point for exploration:

[Alan Garcia, founder and CEO of Agreeable Research] shared an example of this scenario from his work with a company looking to find ways to convert members to paid subscribers: “The company was focused on developing new services to entice free members to purchase. However, after surveying their audience, the company found out that conversions had less to do with relevant options, and more to do with the free members’ awareness of the offers at all. This insight saved the company time and expense in developing new offerings, and instead allowed the project team to innovate around driving greater awareness for paid subscriptions.”

Another tip to remember is that, although managers ostensibly want everyone to take the initiative to dream up new things, managers more often just want everything to be safe. Safety is the enemy of innovation, and if managers cannot strike a balance between the risk they can accept and the innovation that they want, then progress will not occur.

These four points are ultimately recommended:

  • Foster an environment of divergent thinking.
  • Ensure everyone is responsible for their own tests.
  • Normalize failure.
  • Avoid using testing and data to create best practices.

For some additional thoughts, you can view the original article here: http://www.techrepublic.com/article/how-to-mitigate-project-risks-without-stifling-innovation/

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