It’s time to make a decision. You need to decide: Do you maintain the status quo and attempt to simply weather this fiscal crisis? Or do you put aside risk, recognize the need, and innovate your company to come ahead of your competitors?
Innovation is driven by two major factors: necessity and an intelligent disregard to risk. The most important aspect is the “intelligent disregard to risk”.
The Risk of Innovation
Businesses must experiment to grow – “if you’re not moving forward, you’re falling behind.” Yet they still disregard future profits and maintain a risk adverse posture.
The concern compounds because as the economy worsens, businesses become more conservative. They become even more less likely to invest in new ideas. This attitude could be their undoing.
Instead of suffocating innovation and standing still, it’s your duty to open the collective minds and allow creative freedom. Budget in innovation, even when other budgets are being tightened.
The Need for Innovation
But budgeting is only part of the equation. Innovation is borne of necessity. When a brand needs something, when things change, that’s where innovation rescues.
Social media marketing is exactly this type of innovation. Marketing departments realized that consumers were moving online. Then the economy slipped into a recession and brand managers were forced to find another way to advertise their brands without buying online advertising.
Marketers realized that by leveraging free accounts and online word of mouth marketing, they may be able to reach consumers at a fraction of the price.
Therein lies the risk we spoke about before. The “may”. Until it’s tested and tried, no marketer will no for sure whether social media marketing actually works.
Identifying Good Innovation
But how does a manager determine which risks are worthy and which should be left alone?
For many the first step is identifying your need. What needs to be completed? What are the requirements and what resources are available? This problem solving approach allows you to determine which theories actually solve a problem the brand needs to overcome.
Once you’re able to determine that a problem can be solved, the next step is to determine if it’s worth the risk. However, without being able to forecast return and most likely having little external data, this can be difficult.
It’s here that we attempt to create a problem solving flow. We have to identify as much information as possible. What is the outcome? What are the inputs? What could possibly go wrong? Which parts of the plan are most likely to fail?
The more questions you answer, the more likely you’re able to recognize the risk in trying out this new idea.
Determining Risk: A Hypothetical
Let’s reuse the social media-marketing example from before. Consider a brand manager looking to use Facebook. There’s no concrete data suggesting that Facebook can effect branding, create an ROI, or even reach the correct demographic.
So how does a manager determine if investing in Facebook is a worthy project?
Identify the Need
The first step is to “identify the need it fulfills”. If it’s not instantly clear what this innovation solves, then it might not be worth investing in. Also, is the need so dire currently, or soon to be dire to warrant the investment?
Estimate Resources
Second, estimate the total amount of resources you’ll need to dedicate. Create a cap. A huge problem is when managers chase bad ideas with cash. This is a recipe for disaster.
Setup Metrics and Tracking
Next, it’s important to set metrics to track your goals. In the case of social media marketing, you would set goals such as a specific number of page views or time on site. Be firm about tracking metrics to track success. Without setting goals, you’ll never know if the idea is actually working.
Set a Timetable
Another potential problem is that most managers never set a timetable. Although it’s difficult to project when something will begin to start showing returns, you need to set an end date. Without one, you may continue to go through the rabbit hole.
Overcome Your Fear
Sometimes its fear that keeps a business from innovating, and sometimes fear is what makes innovative ideas fail. Don’t be afraid to drop the project if it fails to live up to the timetable and resources you set. Also, don’t be afraid to return to the project and try again.
Innovation can save businesses, create amazing breakthroughs, and lead to industry shattering creations. What are you doing to overcome your fear, identify risk, and invest in new ideas?
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