Overcoming a Fear of Innovation Risk: Data, Prototypes, and Diversification

Innovation exhibits a contradictory nature. Innovative organizations perform better and adapt faster to a constantly changing business environment. They create new fields to play in and new standards to reach for. But innovation is also considered to be very risky and fear of failure often makes us reluctant to innovate. Can we effectively manage these risks and fears in order to implement innovative ideas?

When we take a risk, we act in spite of uncertainty and expose ourselves to danger. Most of us have an innate fear of unexpected events. Is it just a psychological issue? Should we simply practice being courageous, foster risk-taking, and thus overcome this obstacle using brute force? Or are there sound strategies innovators lean on that naturally reduce the fear of poor outcomes?

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On the Hunt for Best Practices? Proceed with Caution

Organizations generally strive for optimization of internal processes and for the most efficient use of resources, since some methods are better than others. The most effective way to solve a specific problem is commonly referred to as a “best practice,” yet the term is often misused and misunderstood. Management consultants are often referred to as peddlers of best practices, applying a one-size-fits-all solution to any given problem.

Let’s clarify what best practices are and are not, and how to benefit from them.


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Every Business Is Becoming Digital. Are You Keeping Pace?

Author and professor Venkat Venkatraman recently spoke to the SIM Boston chapter about how IT leaders within established companies can recognize and respond to digital shifts.

The observations and advice that Venkatraman offers in his book The Digital Matrix: New Rules for Business Transformation Through Technology are practical and prophetic at the same time. He covers many valuable concepts including the digitization of business models (products, services, and processes), the future of digital (based on the trajectory of bandwidth, connectivity, and computational power), and how to create and capture value (through scale, scope, and speed).


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bird flying free

IT Must Sacrifice Pride of Ownership for Innovation’s Sake

IT often has a complex from being considered a non-strategic business unit, or a necessary evil. In response, many IT professionals try to prove the cynics wrong. They think, “We’ll show them….”, and put a lot of pressure on themselves to come up with game-changing ideas. This overcompensating mindset within IT is counterproductive.

Every time I attend an IT conference I visit technology vendors’ booths. Vendors have gotten really elaborate with their sales techniques. Many offer ROI templates or business case building tools to help IT professionals demonstrate the value of purchasing one product or another. These vendors are enabling the exact behavior that is so self-detrimental.

Let’s admit it: ideas born in IT have little chance of securing participation from the business, let alone budget for developing a prototype. IT-generated innovations don’t get much support because they tend to be technology-based.


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The Keys to Managing Your Outsourced IT Resources

Congratulations! You’ve decided to outsource some of your IT services, based on a sound resourcing strategy. And you’ve found a reliable outsourcing partner. Now you need to manage your outsourced IT team.

If you’ve ever managed a vendor, you may have had one of the following thoughts cross your mind:

  • “This team just doesn’t get it. I have repeatedly expressed how they can be successful here, but they keep doing the opposite!”
  • “We didn’t award them a new project they bid on, and now it seems there is a lack of interest in the entire account.”
  • “The resources assigned to this contract are incompetent, but the account exec is unwilling to switch them out.”
  • “During management updates, they only focus on the positive. They are not being transparent.”

Such warning signs usually mean a key resource management responsibility has been fumbled or forgotten.

To set yourself up for success, manage your outsourced IT resources on two dimensions: the relationship and the outcomes.


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IT Must Learn to Fail Fast to Succeed

Innovation is an imperative for all organizations, and particularly IT. With that imperative comes the need to fail fast.

In Fail Fast or Win Big, Bernard Schroeder writes that it is not just leadership, culture, and technology that make for a successful startup, but also speed and timing. It has become easier to launch prototypes and get instant feedback via such tools that range from free online tools, social media, crowdfunding, and crowdsourcing. Startups can learn faster and pivot to new options, thus reducing the risk of outright failure.

Entrepreneurs have reached an extraordinarily high maturity level of innovation and failing fast. Startup methodologies have been honed in the US and globally, making small innovators big threats to established enterprises. As a result, larger companies are adopting startup methodologies—including fail fast—for themselves. Unfortunately, many IT organizations are laggards in this regard.

IT should be leading the way. If we don’t, we will be asked to get out of the way!


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