Championing innovation in a risk adverse culture: A Case Study on HSF Calendar Lottery

Championing innovation in a risk adverse culture: A Case Study on HSF Calendar Lottery

Before you begin thinking about innovation it is important to understand the culture you are working in. If you’re an entrepreneur think about your own appetite for risk and then build a plan to either embrace it or overcome it.

That is what I had to do when I worked for a non-profit organization that wanted me to launch a product innovation – I had to find a way to overcome the “risk adverse” culture.

Business Challenge:
I was challenged to grow my portfolio- the area of business I was accountable for- by 50% over 2 years. Specifically, the goal was to drive revenue growth in the areas of: Community Events, Direct Response and Lottery. One of the areas that I focused on was the Lottery. I knew the organization was quite understandably, risk adverse. – Being a non profit every dollar counted, and public perception on how dollars are spent are under great scrutiny; so I needed to proceed with caution. That is exactly what I did – we proceeded with caution and did our homework.

We were innovating in a category that we knew well so it gave us an advantage, we had expertise and experience in this fundraising category. We looked at the gaming category and identified 10 different potential new lottery products that we could launch. Assessed the pros and cons and tested our top 3. We were ready to move to the next stage of testing with our top pick. We did volume predictive modelling – for those that may not know, predictive modeling leverages statistics to predict outcomes.  In many cases the model is chosen to try to guess the probability of an outcome given a set amount of input data (think Stats Class). We also recognized that this was a new product and we were making a lot of assumptions and they were duly noted. We developed a contingency plan in case sales were not going as predicted – how could we minimize the risk. We believed that we had put together a solid plan/business case and were ready to get final approval and go to market. I thought we had overcome the cultural barrier but then…something else happened that I did not anticipate…. the “fear of failure”

The Fear of Failure:
Someone once said to me “Lisa, 9/10 new products fail” and I naively said “but I am only launching one”. I did not intend to sound “cheeky” I really didn’t understand the concern. We had done the homework, the business case was there, the advertising had been tested and scored way ahead of norms, and we had a contingency plan. And then I remembered something a mentor of mine taught me – Ian – he was a master at creating calm in the midst of chaos – he had a way of framing things that helped you to get beyond your fears and say yes – he would say things like – “Lisa, we can try it and if it doesn’t work we can always change it.”– This helped me to realize that my decisions weren’t forever and took the pressure off of evaluating the implications of a negative outcome too soon. Ian would often say – “we don’t have to decide today” – a few words, but so powerful. I would immediately relax and think I don’t have to decide today but somehow I always did. It seemed to energize me and give me what I needed to move forward. That is the lesson I tapped into – I had to give people permission to say no – to be ok with the fear of failure and give them more time if needed, so they could more objectively evaluate their concerns – were they feelings or facts?

I also had to remind them of the risk of doing nothing-remember my mandate and business challenge – it was there for a reason and we needed to go back to that – to highlight the consequences of not innovating, of saying no, of doing nothing. This can provide another perspective – to help people get past their fears or to at least recognize.

The Results
We were able to get over everyone’s fear of failure and launch the new product. And it was a tremendous success. We over delivered on the estimated revenue in the first year and doubled revenue in the second. Remember, that culture can be an enabler or a barrier to innovation and you need to know which situation you are in and then build a strategy to either embrace it or get around it. You also have to do the work – the business case, the predictive modeling, the assessment of the market place and identification of potential new products is key to getting people to say yes to innovation. And then remember the human side of decision making and help break down people’s barriers to say yes. Feelings are valid but they are not facts. So, if they are concerned about financial risk do a contingency plan – if this, then that – minimize the risk. If you can do an “in market” test, do it, if there are concerns about branding and communications, do communications testing. Assemble the facts that will help you overcome any barriers to saying yes to innovation.

And after all of that – there is no guarantee that the innovation will be successful and that you will hit your targets. If someone says well “can you guarantee me this will work” – you say, “no I cannot, but I can guarantee what the business results will be if we do nothing. Just follow the downward trending red line. And finally, you need to be prepared to walk away if the organization, or you are not ready, or your Board is not ready. Timing is everything, they say. This is not a failure; it is recognizing that people can only do things when they are ready.

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