It seems there are innumerable ways individuals and organizations attempt to foster innovation and entrepreneurship. At a macro level, government seeks to create jobs. Academic efforts target the recruitment and retention of top students, offer talented faculty an opportunity to pursue efforts outside traditional education or research efforts, or pursue creative alternate funding mechanisms for ever expanding educational costs via sophisticated technology transfer programs. There are organizations that foster the entrepreneurship experience via incubators, accelerators, co-work spaces, etc. (often for monetary gain). If that’s not enough, there is no end to business books offering “tips & tricks” on enabling innovation and entrepreneurship, rehashing what worked at a specific time under a specific set of circumstances—likely never to be replicated again.
Why does any of this matter? Why is there such a focus on enabling innovative enterprises? What is generally accepted is that prosperity follows growth and growth results from innovation. This is certainly no different in the corporate environment. Businesses simply start at the other end. Businesses understand that without innovation you won’t get growth; and without growth you won’t generate sustained, meaningful shareholder returns.
While much is made of the importance of innovation in the corporate environment, it seems that very little of the tools and learnings from outside of the organization are applied within. Why is this?
Fear of Failure Is Not an Effective Innovation Strategy
The reality is that many organizations are engineered to minimize risk. Managers are developed over time to behave as the legendary tortoise in Aesop’s “The Hare and the Tortoise” fable. Through various forms of feedback including reward and recognition, individuals are taught that “slow and steady” wins the race. Processes are established to ensure that nonconformance is minimized and that by continuously raising the bar for minimal acceptable performance, over time the company (and shareholders) will prosper.
From the perspective of growth and prosperity, the above approach couldn’t be more wrong. If you agree that prosperity follows growth and growth results from innovation—and—innovation is the result of change and risk, then cultivating an environment that seeks to minimize risk is counterintuitive and over time will result in exactly the opposite of the desired outcome.
True leaders understand this. They know that growth follows innovation and that innovation IS the result of taking risk. Leaders also understand that unmitigated risk can be disastrous. Some leaders attempt to mitigate the risk associated with innovation by taking steps to ensure that the right problems are solved in the right order. Other leaders go “all in” and attempt to provide the best available talent with the best available resources to solve the most difficult of problems. Leaders embrace risk but do so in a manner that attempts to optimize the learnings and improve the probability of constructive outcomes.
It doesn’t matter how a given organization attempts to overcome the risks associated with change and innovation; the point is you can’t win a game that you won’t play for fear of failure.
Back to the tortoise and the hare. Under no circumstances should the tortoise have ever defeated the hare. The real moral to the story could easily have been that success depends on effectively using the talents available to you, not just having potential. Having potential means that someone has not yet accomplished the expected. The hare chose not to deploy its obvious talents and in the end only had the potential to win. Leaders understand this and know that greatness is inspired by great ideas and is enabled by effectively employing available talents. Leaders don’t talk about potential. They leave that to the managers.