The life of an entrepreneur can feel like preparing to leap off a bridge, hoping that you tied the bungee cord correctly so that you’ll bounce back up and not go face-first into the water below.
Risk-taking is an inevitable part of creating a startup, and that is particularly true in IT, where taking risks allows you to innovate and push technological boundaries. While entrepreneurs and professionals in IT careers alike need to have a risk-oriented mindset to be successful, they must also know how to step out in a calculated and well thought-out way.
Yet when it comes to being truly cutting-edge in IT, it could actually be failure that creates the most fertile soil. How does the fear of failure prevent business owners from taking beneficial risks and what can they do to use failure to their advantage?
Failure is an inherent part of becoming truly innovative.
Risk and failure: The foundations of IT innovation
In many ways, innovation is the lifeblood of the modern business. A 2014 report from the UK Government Chief Scientific Adviser defines innovation as changing the way we do things. This could mean making a technological breakthrough, exploring a new solution, or simply making a small improvement to an existing technology or practice. In any case, change is always punctuated by uncertainty and a risk of failure – it’s accepting and managing this risk that leads to true innovation.
An Executive Technology Report from IBM reveals that risk-avoidance is one of the biggest barriers to innovation, particularly when there is a bigger focus on what could go wrong than the potential benefits. According to Eric Ries, author of The Lean Startup, this is a common problem in today’s businesses.
“We have to be willing to be wrong and to fail. But modern management says, “Failure means you get dinged,” he said in an interview with the McKinsey Global Institute.
He says that organisations such as Kodak and Blackberry exemplify the dangers of the risk-averse mindset.
“Pick your favourite company in the last few years that’s gone from a $100 billion market cap to $5 billion. And ask yourself, ‘Was playing it safe actually that safe?’ I don’t see the evidence that that’s true.”
It’s important to balance the risk of failure with the risk of not innovating at all.
Embracing productive failure to take risks that are worth it
Consequently, IT entrepreneurs must be prepared to take risks and be open to failure if they want to create an environment that nurtures innovation. Mr Ries suggests that the key to this is to pursue productive failure, evaluating the performance of the startup and employees based on the lessons and long-term outcomes that come from taking risks and failing.
“Show me a time when you failed but learned something really valuable, or were able to pivot from something that didn’t work to something that did,” he said. “If someone comes to you and claims that they didn’t fail this year, you know one of two things: they’re either lying to your face or they were incredibly, unbelievably conservative.”
In addition, IBM highlights the importance of balancing the risk of failure with the potential benefits, as well as the risk of not innovating. While no one can forsee all possible outcomes, embracing the power of productive failure can be the bungee cord that allows entrepreneurs and professionals in IT jobs to take leaps and be confident that they can spring back smarter and more innovative than ever.