Leadership Risk (and Reward)

The most tangible moments of fear and exhilaration in white-water rafting occur in the few seconds before a raft—careening down rapids of turbulent white water—lunges perilously toward, and in an instant, away from a large cluster of rocks. For those who've never encountered this adventure, it is a terrifying experience. For the guides who know the river and all its idiosyncrasies, these moments are pure heaven—because they took the time to analyze, measure, and anticipate the risks associated with "their river."

The same can be said of business and the process of innovation. Risk is inherent to any enterprise. and taking the right risks after welcoming innovative ideas and examining their potential, is key to the growth of great companies. Despite this, many firms still only pay lip service to the time-honored tradition of improving a business by asking employees for advice.

This is clear when an employee's suggestion for improvement is not acknowledged. Or when an idea is moved forward but fails, and employees are reprimanded for doing what was asked of them in the first place. This punitive action eliminates the opportunity to mine future ideas from employees and, as a result, diminishes the company's opportunity to grow through innovation.

So how do successful firms encourage employees to offer ideas and thank them for contributing—even when they fail?

First, the organization's leaders need to proactively seek employee input. Idea drives are wonderful, and can help spark interest in contributing new concepts, but their life span is limited. To stay ahead of the market, leadership needs to weave the concept of innovation and measured risk-taking into the fabric of their company's culture. Innovation and risk-taking need to be everyday occurrences.

To create such a culture, infuse science into the art of idea creation by designing a system that allows a firm to effectively spark, channel and manage innovation. General Electric (GE) is a master at this, as are Procter & Gamble (P&G), Apple, the Mayo Clinic, and Google. Some of these companies have systems so well defined they have their own acronyms. At GE and P&G, it's called the CECOR system: calibrate, explore, create, organize, and realize. The Mayo Clinic termed its system SPARC for see, plan, act, refine, and communicate. These firms operationalize the idea process by building into it specific mechanisms that keep ideas flowing, and communication channels open.

Second, build a communication model that allows employees to stay informed of the validity and progress of their ideas. A common concern voiced by employees participating in innovation drives is their ideas end up in a void with no feedback. Dismissing an idea without providing an explanation is another common complaint. Tackling these two main communication issues demonstrates a respect for your colleagues, and encourages them to continue participating in the innovation process. Keeping a team abreast of the ideas that work and those that don't—and why—is critical to the success of any innovation initiative.

Third, reward successful ideas and encourage colleagues to continue suggesting new improvements. If a consulting firm were to help a client positively impact revenue or decrease cost, that firm would be rewarded with continued business and perhaps a performance bonus. Why not recognize your colleagues in the same fashion? An appropriate, built-in reward system will spur more creativity than you might think.

Great companies recognize smart risk-taking and innovation are essential components of every successful business. Implementing a well-designed process enables an organization to capitalize on the strengths of its talented workforce, and more gracefully navigate obstacles along the way. Like a white-water river guide, if you plan successfully for the ride ahead, you'll enjoy it a lot more than if you just hopped on the raft and hoped for the best. After all, it's "your" business, right?

Talethea Best is director of U.S. Talent Development for Aon Corporation. She spearheads management and leadership development strategy, informal learning, and employee engagement. Her areas of expertise include talent management, performance consulting and organizational effectiveness. She can be reached at talethea_best@aon.com or (312) 381-5797.