Innovation is one of the most substantial elements of growth. Businesses in Mauritius often face many challenges. Innovation is one of them. Despite its attractive rewards and potential growth, innovation can pose a serious risk. Whether it is startups or well-established enterprises, everyone can suffer from stagnation due to the avoidance of major risks that come with innovation.
There is a reason for it. Innovators who jump into the market too quickly often suffer from the risks that the capricious market presents. Sometimes, the risks are greater than the rewards, and the absence of risk management can lead to more harm than good. However, there is a way to maximize the innovation’s potential and ensure stable development.
Successful managers often take adequate time to come up with the perfect risk management strategy for innovation. The key is to evaluate and improve the decision model they are taking for respective innovation. Timing also plays an essential role in curbing unintended consequences.
A recent Harvard Business Review Article has addressed five essential elements that are used for curbing the risk associated with innovation. They are all given below.
- Recognition and Development of a Proper Risk Recognition Model
As a necessary pre-step, the experts of risk management, prepare a mental model for assessing the intended outcome and the risk variables with an innovation. It is the practice of all successful firms to integrate a well-developed mental model for alterations in their existing services or products. Such models deserve recognition and need to be studied in order to minimize the unintended consequences.
- Even the Most Decisive Models Have Limitations
No matter how flawless a model of risk management seems, it is going to be limited in one way or another. There are countless limitations and risks associated with every model. It is quite possible that the model is not studied perfectly, or the application that the model is applied to is not relevant. It is important to consider the limitations of these models, along with understanding that there is never any complete model. If there was, there wouldn’t be an element of innovation.
- Expect the Risks
Risks are an essential part of innovation. Even after the recognition and utilization of a proper model, risks will always be there. In a way, the experts are recommended to go outside the box and think of risks apart from innovation-related uncertainties. It is quite possible for an out-of-box risk to render the innovation inert, maximizing the losses.
- Obtaining the Customer Knowledge
Even after assessing everything, utilizing the perfect model, and ensuring that all risks are evaluated, it is very much possible to ignore the user. User-based knowledge is one of the most critical aspects of innovation. The scope of the user’s understanding needs to be considered while planning the innovation model. How will the user react to that change? Will they like or dislike it? It all needs to be considered.
- The Modern Infrastructure Needs to be Considered
The innovation is going to either thrive or downscale in its scope in new infrastructure. The changing conditions also evolve the user’s behavior, resulting in a refreshed need to study the consumers. Therefore, the infrastructure in which innovation is going to take place needs to be thoroughly examined.
