Mitigating Risk

You Think You Are Mitigating Risk. You Are Really Killing Creativity.

Design strategy relies on creativity. Creativity is about challenging existing norms, pushing the boundaries of technology, and shaping behavior in new ways. But our effort to manage creativity often ends up killing it instead.

Our organizational policies stand firmly in the way of a creative bang. Most organizations have policies that prohibit employees from moving the desks or installing their own software on their computers. Some mandate what people must wear and what times they must be in the office. Some companies don’t allow their employees to tape things to the wall or bring in their own furniture, and most frown on employees sleeping under their desks or drinking alcohol at work.

These things do not cause creativity: sleeping at work or wearing jeans and a t-shirt are not indicators of a creative organization. But rules themselves are indicators of a culture where employees must seek, and gain, permission before taking action. The default message in these cultures is “you cannot do things.” Creative exploration is about doing things Just Because. “Acceptability” is not part of a creative problem exploration, particularly when that exploration is intended to lead to innovative outcomes.

When the message of “seek permission first” is explicitly repeated over and over, one can’t help but hear it. And that echoing voice of “don’t do things unless you have permission and a good reason to do them” flies in the face of creative exploration. Telling an employee that they can’t move their desk because it isn’t acceptable, or that they can’t sleep at work because it isn’t acceptable, beats the drum that there are acceptable things and unacceptable things. Our culture limits creative exploration before we’ve even started.

Additionally, this idea of permission-seeking means that there is a top-down approval process for doing things. This says that someone at the top has a better answer than you do, and underscores that your work is to be hierarchically aware, rather than without borders. In a hierarchical culture where people above know more than the people below just by the weight of their title, it’s hard to rationalize those low on the totem pole taking chances.

And, rules and policies introduce the idea of repercussions, where there is the potential for punishment based on action. This is a culture of fear, even if it is only a slight fear, and reinforces that risky behavior may be met with ill consequences. Perhaps it’s better to do predictable things and follow a predictable process, one that hasn’t resulted in negative repercussions in the past.

One of the many reasons smaller startups are able to pursue wild and crazy ideas so quickly is because they have no rules at all.

The lack of organizational policies in a startup sends both a literal and figurative message to employees: “Don’t spend even one minute of your time worrying about getting sued or fired or reprimanded or not-promoted, because you have other more important things to do. You are not constrained at this company. Do outrageous things. Do whatever you want.”

“Do whatever you want” comes with all sorts of problems, of course.

Without HR rules, startups have a reputation for breeding sexist behavior. Without legal assistance, companies find themselves running afoul of local laws, as is the case with ride sharing or online alcohol delivery services. Without facilities regulations, a company can look like a shanty-town and present an unprofessional aesthetic to investors or customers. People sleeping under their desks is gross, and probably a health risk. These are real challenges with real repercussions.

Mitigating Risk

It’s not just corporate policies that limit creativity. It’s also our working processes, particularly those focused on understanding and delivering a value promise. That value proposition is the creative commitment we make with our product and service offering. Buy this, we say, and we promise you will receive this benefit.

But in that promise is risk. The need for the value is unproven, because the innovation has never been seen or considered before. We are promising a benefit, but we’re unsure if people actually want or need that benefit.

This risk can be an expensive one. It’s not cheap to bring a new product or service to market, and that’s money lost if the innovation crashes and burns. And, there’s an opportunity cost associated with innovation, as limited resources constrain our ability to pursue every creative idea. It’s reasonable that organizations have developed processes, techniques, rules and methods to help squeeze the risk out of the creative process.

On the front-end of the process, we’ve created ethnographic research methods that identify latent wants, needs, and desires. By watching people work and live, we can find places where their experiences can be improved by new innovations. This form of research puts boundaries around risk, attempting to steer the boat in the direction of a real market need from the start.

We’ve created various forms of product management and marketing structures to ensure the new product offering, and accompanying risk, are understood by the organization. These take the form of the popular “business model canvas” or Amazon’s “internal press release”, tools that try to succinctly describe what to make and why we’re making it, before actually spending time producing it.

We’ve created an iterative process of informed trial and error through launch cycles like lean, where we put incomplete thoughts and ideas into the market to understand if there’s appeal. Often, this means shipping a product so early that we don’t even understand if there’s a market need at all, and using feedback from the market to then develop the idea itself. This mitigates the risk of funding the wrong idea from start to finish, and allows an idea to change during the development process.

These processes have benefits like faster time to market, increased in-team communication and alignment, and building empathy with end users. Fundamentally, the processes are intended to minimize risk. Ethnographic research attempts to guarantee we solve a real problem with real need. Product management rationalization documentation is intended to force the team to consider externalities and work through complexities that may cause a product to fail as it’s brought to market. And lean allows us to course correct quickly when we see that our risks are not actually being mitigated.

Mitigating Risk

Minimizing risk is fiscally responsible and is probably a Good Idea. But it itself comes at a price, and that price is a loss of creativity. Creativity is about dreaming, and the strategies described above temper those dreams.

By itself, ethnographic research tends to identify pragmatic problems, leading to equally pragmatic solutions. These are often problems of utility, efficiency and error reduction, and solutions to these problems tend on the side of safe innovations: ideas that have, naturally, less risk through their predictability.

A business canvas grounds a new idea in the pragmatics of a business, asking and requiring answers to: do we have a supply chain in support of this idea? Are we locked into contracts with existing customers? Have we considered how our ideas will be received by our partners? The answers to these questions minimize and temper the extremism of a new idea, contextualizing new ideas in traditional structures.

And a test and measure approach requires that something can be quickly testable, almost ensuring that a new idea will be small and incremental rather than large and grandiose.

Mitigating Risk

A culture without rules and without processes; is this really what you want? Do you want to have a structured, operational, predictable machine of a company, or do you want to have a creative powerhouse that may or may not be one creative idea away from a total meltdown? A pursuit of creativity can quickly go sideways, and turn into the small business that manically pursues every new thought of its founder, or the corporate innovation incubator that never actually launches anything, or the startup that dreams up the coolest ideas that no one actually wants, needs, or will buy. Is that really where you want to take your organization?

It’s not a binary choice between operational success and creative success, of course. The answer to this question is on a spectrum, one where either extreme is probably not healthy. And it’s not necessarily a decision you have complete control over, as the answer may evolve organically based on the personalities in the company and market forces outside of it. But it’s not entirely left to chance, either. As a leader, you have levers to pull, if you want to push towards a less structured, more creative culture.

First, remove as many rules as you can that have nothing to do with creativity itself. Consider the policies, procedures, and structures that have built up over time, and then reconsider them. Sure, there’s probably a good reason that facilities has bolted the furniture to the ground. But is their justification more or less important than your thirst for creative innovation?

Then, allow fixed processes to change. Your teams may have developed a well-oiled process for bringing products and services to market, but encourage them to reinvent that process over and over, even if it’s at the expense of predictable, measurable productivity.

Finally, make bets across the spectrum of risk. When you look at creativity through a lens of risk, well-substantiated and well-reasoned ideas look appealing. But make some bets on the ideas that have no rationale at all, but just seem wonderful. Consider the funding of these bets as “Vegas money” – you’ll probably lose it. But in funding or supporting these ideas, you’ll send a message to your team that it’s OK to go big – creativity is welcomed here.

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