Most organizations are risk-averse. No one likes throwing away money for no good reason and no one enjoys failing. Yet, risk is a part of life, especially a part of innovation life.
What is Risk in Innovation?
Innovation results in product development. “Products” include tangible products that we can touch and feel. “Products” also include services, programs, and apps that supplement the tangible good. A digital retailer with whom I’ve worked defines products as web pages, shopping cart, and checkout processes. Really, it is the code behind these user experiences that is the “product,” but the firm’s definitions help them improve their business operations.
Risk, then, is the uncertainty that innovation will work. This includes the technical functionality of the product as well as market acceptance. If the digital retailer creates a great web page with lots of choices that scores high on Google search engines, but the checkout process breaks, the customer is not satisfied. The product has failed.
Product development professionals and product managers must understand the risk they take in designing new products. They also must understand customer needs in creating these new and next generation products.
Design thinking provides both a process and a toolkit to better understand customers throughout the product development process. The more radical the innovation, the more risk you take. On the other hand, the more you understand the needs and wants of your customers, the less risk you encounter in product design.
The benefit of a design thinking approach to radical product development is reducing risk. Not only do you better understand customer needs, you also test insights and learnings with real customers throughout the development process. Design thinking tools encourage feedback from end-users at each step of a product development process.
Another benefit of design thinking for radical innovation is enhanced creativity. Instead of looking at customer problems from the outside in, you search their challenges from the inside out. Recently we’ve discussed some creativity tools for product development.
Risk and Creativity
Creativity introduces risk by itself. Have you ever met a calm actress on the opening night of a play? Or a painter at his first gallery exhibit? They are worried about failing to grab media attention (customer acceptance).
Likewise, the more radical of a solution we use to approach an innovation problem, the more creative we have been, but the more risk we have taken. Of course, the actress minimizes her risk of failure with full dress rehearsals. The painter minimizes his risk through private sales before the gallery hosts his show. And product developers minimize risk with design thinking.
Learn more in our free Product Development Lunch and Learn webinar on 9 May 2022, 12:00 pm CDT, 3 Creativity Tools. You might also be interested in our Deep Dive Creativity Workshop for Product Managers on 27 May 2022. Check out our course calendar here, register here for the free Product Development Lunch and Learn, and register here for the in-depth creativity workshop.
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