In the digital world, resting on one’s laurels is not an option, and what engages users today, may fail tomorrow. However, the best way to create a culture of innovation isn’t clear. At a minimum, we need to take risks and learn, but we also have to make sure that we are taking the right risks and investigating and learning from those innovations quickly. And the really tricky part is how do we measure that?
Lately, I’ve been researching what would be the KPIs (also known as Key Performance Indicators to the uninitiated) to ensure that Beaconfire is innovating smartly and quickly… and the answer led me to Hollywood and why the movies get it all wrong. Hollywood is littered with movies where the protagonist goes against the grain, takes a tremendous risk and in the end is rewarded for taking that risk. Just off the top of my head, I can think of several where someone quits their job, follows their passion and then either is more successful in their new career or begged to return by their old jerk of a boss. Jerry Maguire, Baby Boom, Wanderlust, Parenthood, Mr. Mom… in every case, the main character finds greater success in the end because they took a risk.
Now, don’t get me wrong, I love movies that show the virtue of risk taking — my favorite film is Harold & Maude, which is entirely about finding one’s own way in the universe. The problem I have with the typical Hollywood movie is that they reinforce the message that you should take risks in life because it will work out in the end. In my opinion, it cheapens the real lesson that taking risks is a worthy endeavor regardless of the final outcome.
And this takes me back to Beaconfire. When I was trying to identify what should be the KPIs for the next year’s innovation work, my research led me to two schools of thought. One is to measure what percentage of your risks turn out successful in the end. It makes sense. You take risks in hopes of being rewarded in the end and tracking how effective you were at getting those rewards seems logical. And if you follow this reasoning, then of course Jerry Maguire was right to take a chance and quit his job, because his new agency was a tremendous success.
However, the second school of thought is that these are entirely the wrong KPIs for judging innovation. By judging the worthiness of a risk on the end result, you are predisposing yourself to taking safe risks that are likely to succeed, and over time, an organization takes smaller and safer risks until they aren’t really taking risks at all. Instead, the second school of thought is that innovation KPIs should judge how quickly you learn from the innovations you pursue.
Risks are likely to fail. It’s the definition of a risk. But they are still worthwhile and in the digital space, a necessity. What matters is whether you are able to efficiently judge if that risk was a success (#WINNING!) or if not, learn something and try again (#STILL WINNING!). Jerry Maguire quitting his job to open a sports agency that cared more about its clients was the right risk for him regardless of whether or not it showed him the money in the end. What really mattered was how quickly he figured out if his new agency was going to be a success, and if not, take another risk and try a new line of work…