While most companies recognise the need for innovation, many executives are still fearful of the risks in pursuing new ideas that may not succeed. Innovation enables us to do things better than we previously could, or to do things that we couldn’t previously do. Inherently, innovation is impossible without taking risks. Just how risky an innovation proves to be often depends on the choices people make in using it – the more informed the choices, the lower the risk.
Fear of failure is an innovation killer but given the criticism of those willing to court the risk of innovation, the apprehension seems warranted
It’s not just fear of risk that inhibits innovation, but perhaps even more so, the fear of failure. Not every innovation succeeds, or at least not on the first attempt. It is inevitable that every success sees failures along the way so failing to innovate can still result in failure. Fear of failure is an innovation killer. Yet given the scathing criticism often directed at companies and leaders who are willing to seriously push boundaries and court the risk of innovation, the apprehension seems warranted. Elon Musk, Tesla chief executive, is no stranger to this.
Since announcing his intention to build the “world’s biggest battery” to stabilise the South Australian electricity grid, there’s been no shortage of criticism in the Australian media about Musk’s government subsidies and incentives – in 2015 his companies were reported to have received an estimated $US4.9 billion – and yet these subsidies pail in comparison to Musk’s competitors in the oil and gas sectors. In Australia, for example, the federal government is backing a $AU100 billion investment target to expand the Australian coal industry, with $1 billion being considered for a single coal mine in central Queensland.
There’s no shortage of criticism about Musk’s government subsidies and incentives, however, they pail in comparison to his competitors in the oil and gas sectors
South Australia now has the world’s most expensive electricity, having recently overtaken Denmark following a price increase by major energy retailers AGL, EnergyAustralia and Origin Energy. Residential customers will see an average rise of 18 per cent under AGL, 19.9 per cent from EnergyAustralia, 16.1 per cent with Origin Energy. Experts say the price Australian customers, particularly South Australian customers, are currently paying for power exceeds the actual value of electricity as a resource.
Experts say the price Australian customers are currently paying for power exceeds the actual value
Power prices are pushing more people into poverty – Anglicare community services says demand for the organisation’s financial services has increased by as much as 20 per cent this year. And yet, instead of encouraging innovation in an antiquated and exploitative industry and supporting those prepared to take the risks involved, the critics and naysayers are throwing stones.
Financial analysts are split between Tesla becoming the next Apple or being on the brink of collapse, but regardless of the outcome, Musk is undoubtedly prepared to take risks. No one can foresee all consequences of innovation, no matter how obvious they may seem in hindsight. The bottom line is that all innovations involve a trade-off between risk and return. Innovation involves a leap into the unknown and to progress, that’s a fact needs to be accepted and managed rather than criticised.