Embracing Risk to Grow and Innovate

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It’s not as hard as you think to begin to shape and form your own informed intuition. As you create something new to the world, simple conversations with lead and expert users might tell you more than what any detailed survey could tell you. When it does come time to begin looking for explanatory data, uniqueness may be more important than liking or purchase intent.

3. Prototype, prototype, prototype

We believe a key measure of the effectiveness of any innovation system is the time it takes to arrive at a first prototype. Be it Paul MacCready crashing and building and crashing his human-powered Gossamer aircraft in rapid succession, or the crew at Pixar creating incredibly-rough videos of movies like Monsters, Inc. months and years before the start of final production, quickly iterating prototypes is a signature way to mitigate risk by giving you ‘risk-killing’ information.

To put this into action, take that challenging project that has you worried right now and list five or six assumptions you have about potential solutions. Now build something that helps you test one of your assumptions. That something could be a physical model, a quick video showing what the human experience would feel like, or even a reverse income statement. Then walk next door (or to the next cube) and put it in front of your colleague (or your spouse or your mother). What did you learn? Repeat this process again and again.

A key metric: how long is it taking to get feedback on your Big Idea from another human being?

4. Think big, but start small(er)

Think big, but use constraints—such as schedule, headcount, and scope –to learn more about what it will take to execute your big-picture value proposition without spending big-picture amounts of energy, money and time. Designers, love constraints, because they give them a toehold, a place to get traction, even in the most slippery of ascents. Limiting the scope of your initial efforts (without losing site of the vision you’re heading toward) is an effective way to prove viability. And limiting scope makes it easier to prototype, which, in a virtuous cycle, accelerates feedback about which constraints to keep applying energy against. In the end, it’s less risky to scale a viable proposition than it is to try and make viable an operation already at scale.

Design thinkers at Turner Entertainment Group in Atlanta have been thinking big but acting small in order to bring a disruptive business model to market. David Rudolph, a Turner development executive, challenged his team to create an in-market prototype of an Internet-based ‘television’ business to satisfy the rabid desire of Atlantic Coast Conference basketball fans to watch untelevised games. However, they had to do it for less than $35,000 in fixed costs and $1,200 per game. The result? Each of Turner’s small experiments can be cashflow breakeven after only a few months of existence. Focusing only on business viability plus customer desire instead of on getting big was a risk; but it enabled Turner to learn a lot about their customers and their own business model.

5. Treat money as a positive constraint

Money is just another constraint, but it’s such an important one that we had to give it its own billing. Money is the grease, yet paradoxically, having less of it can make things move faster and seems to also help brains think more clearly. Jaime Lerner, a renowned Brazilian architect, urban planner, and mayor of Curitiba, says that “creativity starts when you lose a zero from your budget.” To boost usage of the Curitiba’s public transit system, and without access to piles of money or time, Lerner created a lottery which used bus fare as lottery tickets.