How can making small investments help you innovate?

Innovative ideas sometimes fail (even in companies like Google and Amazon). Although failure is an inevitable part of innovation, expensive failure is not a necessary aspect of the process.

The fear of failure in innovation

One of the myths surrounding innovation is that substantial benefits (whether economic, but also social and environmental) require that companies make large investments at an early stage. Here is where the lengthy and endless business cases come from, with numerous assumptions, bad estimates and predictions. Justified by the need to have as much information as possible from the very beginning before making any decisions.

Moreover, when you make a significant investment, failure is not an option. Not only are money, time and other resources at stake, also your company’s hopes for growth and, in certain types of cultures, the reputation of the person who took the decision. That is why failure is something unacceptable.

The mindset shift you need to make as an innovation leader.

Especially during times of economic recession, you should stop putting all your hopes on the success of a single big bet. To uncover some ‘big ideas,’ we need to make small investments in a variety of ideas. Think about it as a sales funnel.

Those small investments can increase in value over time, but only for those teams who are showing progress to find innovative ideas that are potentially successful. Here is where your mindset begins to shift, from investment based on inaccurate predictions about the future to investment based on current tangible evidence.

The Value of Small Failures

When you start making small investments and your investment level increases only when there is evidence of progress, you will stop fearing failure (you may even start to appreciate it). This is because, if the ideas you invest in, the failures will be cheap and quick. In addition to the significant benefits of information and learning, these insights can be applied to other company areas or to other innovative ideas. It is worth noting that the impact on reputation is minimal.

This change of perspective about “failure” allows our teams to experiment, fail, learn, and explore new ideas, bringing them closer to those desired innovatives ideas that will provide significant benefits.

To summarize, it changes from a large initial investment to multiple small progressive investments.

Credits:

Cover Photo: Maxpixel