In the context of innovation, “risk” is the possibility—real or perceived—of a negative outcome. Ultimately, an organization’s attitudes toward risk will heavily influence a project manager’s ability to drive innovation forward. In risk-averse organizations, compliance with best practice is usually preferred above innovation and experimentation. Nevertheless, a certain degree of innovation is needed to keep pace in a competitive environment. Project managers operating in this type of organization may benefit from “piloting” ideas and improvements in a controlled environment before recommending wider implementation.
For example, an idea may be tested first on a small internal project, and then piloted within a group of tactical projects, before finally being tested on a larger effort. This approach carries far less risk than a “fail fast, fail often” innovation strategy, which is more easily adopted in risk-seeking organizations. Whatever the project environment, abandoning innovation all together is nearly always counterproductive.
Like any other skill, the ability to innovate takes time and practice. When innovation is side-lined due to an aversion to risk, the competency cannot be developed. When the competency is not developed, companies struggle to stay competitive and adaptable.