Embracing risk to learn, grow and innovate

Innovators encounter some of the most challenging and risky problems in the world of business. Let’s grow this lagging brand. Let’s envision the future of our market. Let’s connect to a whole new set of users. But what’s the best approach to forge ahead, despite the risk?

– Diego Rodriguez and Ryan Jacoby

It’s easy to say that entrepreneurial business people always forge ahead, risk be damned. However, the glamour of bold action is often stymied by the spectre of risk. New offerings may succeed in the market, but more often, they fail. Competitors may outwit you. Careers may hang in the balance. Taking bold risks does not feel safe. But to seek out ‘zero risk’ is to commit to doing nothing.

How does one move ahead and create growth in such an environment? We applied the design process to this challenge. In the world of ‘design thinking’, acknowledging risk is the first step toward taking action and with action comes insight, evidence and real options. To increase their odds of innovating routinely and successfully, organisations need to learn to live with risk the way designers do.

Designer’s approach

Risk, in the traditional sense, is an assessment of the downside that might result from taking a particular action. If the perceived level of risk is too high, people look for a less-risky alternative, or even forego action altogether. However, for most designers, risk isn’t a measure of ‘the downside’; instead, it is a measure of upside and opportunity. If the risk isn’t great enough, designers might well ask themselves, “why bother?”

Insight 1: Designers don’t seek to mitigate risk. They embrace it, even amplify it
When it comes to working with risk, trying is as important as doing. IDEO designer Owen Rogers says, “The real risk isn’t failing, it is not trying.” For a design thinker, failure is the best way to clear the fog to see a path to success. With its diminutive wheels and bug eyes, the first generation Toyota Prius looked odd, and its performance was nothing to write home about. A failure? By conventional standards, yes. But in Toyota’s view, it was an experience necessary to creating the remarkably successful second-generation model.

Designers see risk as a dynamic element, as yet another design variable. Amplifying risk is a way to increase the amount of information one receives from experiments and prototypes. Markus Diebel, an IDEO industrial designer, told us, “On every project, we have our hands on a ‘risk dial’; we have designers on one side pulling it toward the red line, and our clients and their systems on the other side pulling it toward the safe zone.” Such is a design thinker’s thirst for learning that they actively seek out failures. They trumpet those failures, because the feedback they receive will help them.

Insight 2: Designers take risks to learn
Designers are hooked on learning, and embracing and amplifying risk is a way to learn. That increases the likelihood of designing a new and better experience for a user. So if you were to poke your head inside the door of a ‘business-by-design’ organisation, would it look like a scene out of Mission Impossible? Would designers be riding motorcycles with scissors in their hands or setting things on fire to see what happens in the name of positive impact? Not exactly. There’s something keeping the paramedics and firetrucks away.

Insight 3: Designers embrace risk, but their process of thinking mitigates it
Design thinking uniquely combines conscious risk taking with structured risk mitigation. This is a fascinating paradox: designers embrace risk, but the way they think mitigates it. Each of the three behavioural building blocks of design thinking—empathy, prototyping, and storytelling—serves to simultaneously embrace and mitigate risk.

Empathy
Design thinking starts with people and looks for evidence of desire. This is one of the most fundamental ways to mitigate risk because marketing things that people don’t want increases one’s risk of failure substantially. In a recent innovation project, design thinkers from both IDEO and a bicycle-manufacturing client listened deeply to what potential customers said. They reached a surprising conclusion: instead of a desire for more technical ‘extreme’ biking experiences, what non-consumers of modern bicycles desired was a simpler, more joyful biking experience. And so they designed a much simpler experience, at the root of which is a bike with a simple foot-operated brake and an automatic gearbox. Risky? Yes, but only relative to the ingrained bias of the bicycling industry.


Prototyping
Design thinking encourages you to gath
er feedback long before an idea, concept or story is finished. A prototype, in the hands of a design thinker, is finished when it can teach them something. The goal of prototyping is to accelerate feedback and failure. Failing indicates that you haven’t quite yet nailed the experience, and suggests what you might try next. Prototyping lets you find problems, but it also teaches you to ‘let go’ of ideas that aren’t fruitful. Imagine what could have been if the creators of global mobile phone service Iridium had approached their challenge of orbiting 77 geo-stationary communications satellites from a prototyping mindset. In addition to the service being expensive, a severe drawback of Iridium was a lack of user satisfaction with the phone handsets, which were bulky and didn’t work well inside buildings—both fundamental value-proposition flaws. Could the Iridium team have used prototyping to uncover these and other system flaws while they were still actionable?

Storytelling

Crafting and telling simple, emotional, concrete stories is a critical part of design thinking. Focusing on storytelling ensures that the essence of the value proposition is communicated and understood in a way that allows people within an organisation to learn and act. Telling stories that people can internalise is a way to reduce execution risk—they will execute with a common vision in mind. In the absence of data and direct execution experience, well-told stories might be the only way to inspire action and ensure that all parts of an organisation are on the same page.

Recently Len Wolin, a senior director of program management at Ritz-Carlton, was looking for ways to “bring a little something extra out of each hotel that would help to make the experience personal, unique, and memorable”. An IDEO team worked with his organisation to create a set of ‘scenography’ workbooks meant to help each individual hotel create localised service experiences, such as a warm, personalised check-in process or a ‘big night in’. These workbooks outlined the key elements of experience scenes using a series of photos that told an evocative story. The key was to communicate the principles driving the Ritz brand experience without prescribing the solution for individual hotels. Storytelling like this created broad corporate alignment and encouraged local creativity all at once, a wonderful formula for effective execution. 

Visit Design Thinking for more information, and these could be some of the inspiring books on Design thinking.

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  1. waikar3d
    August 23, 2007 at 1:59 am

    awesome……

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