Getting A Green Light
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The document discusses the challenges of getting support and budgets for ambitious projects due to aversion to risk. It outlines five types of risks to transformational initiatives: implementation failure, adoption failure, cannibalization, legal risks, and perception of failure. The document argues that some level of risk is necessary for innovation and provides strategies for communicating the risk profile of initiatives in a way that makes business sense, such as using an iterative development process, customer research, and setting proper expectations that acknowledge the experimental nature of innovation projects. The overall message is that avoiding investment in transformational projects due to risk aversion leads to the greater risk of business irrelevance.
Getting A Green Light
- 1. GETTING A GREEN LIGHT Challenges and Solutions for Your Ambitious Projects Howard Tiersky, CEO
- 2. Do you struggle to get support or budget for transformational initiatives that are essential to enable your company to thrive in these times of change?
- 4. The reason your enterprise isn’t supporting you? Aversion to Risk
- 5. For them, it seems better to stay where they’re comfortable, rather than venturing out into the unknown.
- 6. But are they right? Is your ambitious project risky?
- 7. The answer is probably…
- 8. But when the world is changing, not changing is even riskier.
- 9. The good news? CEOs and the people managing business units understand a lot about risk.
- 10. You just have to draw the right connections for them.
- 11. They know if someone offers them a stock with HUGE returns and ZERO risk, it’s time to run the other way.
- 12. Just like with stock investments, the steps to successful innovation include taking smart risks based on insights into the marketplace combined with a portfolio approach.
- 13. Our job as innovators is to communicate the risk profile for transformational initiatives in a way that makes solid business sense.
- 14. Then, we structure the approach to keep the risk as low as possible.
- 15. Once you have alignment on the idea that some level of real risk is necessary and appropriate…
- 16. 5 …you can gain the confidence of enterprise leaders by demonstrating you have strategies to address the different types of risk your efforts may face.
- 17. There are different types of risks to transformational initiatives.
- 18. The first type of risk is implementation failure.
- 19. Implementation failures are generally the result of unforeseen circumstances. Find a better image– something funny about someone who doesn’t see what’s coming
- 20. The best antidote is having a diverse team collaborating effectively to consider any essential aspects for implementation prior to implementation.
- 21. Less ambitious, less expensive launches lead to more sophisticated launches down the line. Use the concept of the minimum viable product:
- 22. Microsoft is famous for developing terrible version 1 products that dominate the market by version 10.
- 23. The second type of risk is adoption failure.
- 24. Even if your product is executed perfectly, there’s always a risk that people won’t like it.
- 25. The best way to manage risk of adoption failure is by leveraging an iterative, user-centered development process.
- 26. You can use customer research to understand customer demand and reduce the risk of adoption failure.
- 27. The third type of risk is cannibalization.
- 28. Cannibalization is “failure by success,” or the idea that a new channel will take money away from another area of the company.
- 29. But if you don’t do it, someone else will.
- 30. “I’d rather Apple cannibalize Apple than somebody else cannibalize Apple.” In the words of Tim Cook:
- 31. LEGAL/REGULATO RY The fourth type of risk is legal risk.
- 32. With breakthrough ideas, it can sometimes be unclear what is allowed. There’s risk of regulatory violation, infringing on a patent or other legal issues.
- 33. While their valuation climbs to tens of billions of dollars, Airbnb and Uber are constantly fighting legal battles. And what a great problem to have!
- 34. When Google launched, they faced legal challenges as to whether or not they could index other sites.
- 35. Attorneys are often asked to focus on protecting the company from ALL risk.
- 36. It’s important that they be included in the innovation process, to understand that the goal is not to avoid risk, but to take intelligent risk.
- 37. The fifth type of risk is the risk of the perception of FAILURE
- 39. There’s always a risk that those who don’t have a knowledge innovation mindset will judge the projects or their leaders as failures when they aren’t instant successes.
- 40. Furthermore, in the world of enterprise, perception can often be reality, especially with public companies.
- 41. It’s critical that the right expectations are set in advance for innovation projects, with appreciation for their experimental nature.
- 42. Because failure is always part of the innovation process! Failure is a step on the road to success.
- 43. It’s intelligent to take risks if you have your eyes open and see a substantial potential Return on Investment (ROI).
- 44. There’s always a risk that ROI won’t be achieved, and the timeframe for ROI from transformational projects is difficult to forecast.
- 45. However, in times of change, avoiding investment in transformational initiatives leads to another kind of ROI: Risk of Irrelevance.
- 46. “Far better is it to dare mighty things, to win glorious triumphs…” “Far better is it to dare might things, to win glorious triumphs, even though checked by failure, than to rank with those poor spirits who live in the gray twilight that knows not victory nor defeat.” -Teddy Roosevelt
- 47. Please share this with your colleagues!
- 48. GETTING THE GREENLIGHT Howard Tiersky, CEO Contact us to learn more about how to overcome aversion to risk . [email protected] al @tierskylinkedin.com/in/tiersky
- 49. from helps clients develop and optimize digital experiences for shopping, banking, travel and entertainment – online, on location, and everywhere you find the digital consumer. More at FROM.DIGITAL.
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