Innovation: Drivers and Constraints
Innovation is driven by demanding clients”. Or, do demands for certainty and risk aversion act an inhibitor to innovation? My experience is that such demands are often misconceived and in fact there is a very positive synergy between risk reduction and innovation - yet the constraint remains. What is your experience?
Alan Powderham, Mott MacDonald
October 25th, 2006 at 3:29 pm
Demands for certainty and risk aversion are clearly two key inhibitors to innovation. If it is demanded that any new venture must provide a particular minimum return on investment then that will dissuade people from trying risky (but potentially exciting) innovations. They will tend to implement safe product extensions only.
There is a big risk in avoiding the risky. You end up in a stale backwater and miss the boat. Innovation is risky - but so is standing still in a fast-moving world.
October 25th, 2006 at 3:29 pm
I am glad that Alan has raised this important connection of risk and innovation. The Stock Exchange through the combined code has encouraged Boards to focus much more on risk. I wonder how many Boards put equal focus on innovation? If they did it might just be the stimulation that management needs to create more value adding products & services.