The One Thing Every Company Gets Wrong About Innovation
The Fortune 500 Insiders Network is an online community where top executives from the Fortune 500 share ideas and offer leadership advice with Fortune’s global audience. Val DiFebo, CEO of Deutsch New York, has answered the question: How do you encourage employees to take risks?
Risk-taking is critical in the business world. Without it, ideas would be secondhand and innovation and invention would be impossible. Any sector of business depends and thrives on fresh, original thinking, taking chances, and exploring new territory. Innovation can be a company’s most powerful strategic advantage, especially in today’s crowded and competitive marketplace. Below are the three ways to encourage employees to take risks:
Explore unchartered territory
At Deutsch, the way we encourage risk-taking is by rewarding and applauding new ideas, and by listening and building when teams want to do something differently—when they imagine something that doesn’t yet exist. Venturing into unchartered territory is often the core of innovative thinking and the foundation for a brand’s success. Sometimes great ideas are born and blossom into astounding accomplishments, and sometimes they don’t. Remember, there is no shame in failure, but be aware that there is a risk in trying to solve a problem right away. Instead, try to explore the unchartered territory strategically and patiently. For example, Richard Branson struggled in school and dropped out at age 16—a decision that ultimately led to the creation of the wildly successful Virgin Records. He took a risk and explored uncharted territory, turning his passions into a business empire. His entrepreneurial projects started in the music industry and expanded into other sectors, making Branson a billionaire.
Support the ideas
Supporting the ideas of your employees, financially and practically, is the key element to a business’s success. However, you must budget carefully for those risks, have a clear idea of how much you’re willing to spend (i.e., lose), and have the discipline to stick to that number. You also must be realistic about when these investments will generate a return, if ever. Not all risks are created equal, of course. Encourage your team to take calculated risks.
Ask your employees to put themselves out there and to bring to the table ideas they are passionate about (causes, concerns, etc.). This is a different type of risk—but asking people to be a bit vulnerable encourages risk-taking and can be tremendously rewarding, as well as provide an element of team bonding. There’s nothing wrong with learning the lessons of past failures, blowups, and frictions—big and small—and in strategizing in order to minimize the risks of repeating them going forward. A smart risk is well thought out and demonstrates that employees have looked at other options and genuinely believe that the risk is worth the gain. As a leader in a company, I am faced with making numerous decisions daily, but one thing I never lose sight of is the passion behind an employee’s idea. At the end of the day, it takes courage and passion to introduce a new idea, and it’s a risk many are willing to take.