In recent years, entrepreneurship has been on the rise as a career choice. There are different approaches to this choice. More and more people test the water by combining self-employment with a part-time job, thus generating income from a variety of activities and sources and refusing to place all bets on a single horse. Others quit their job altogether to do what they already did, but for themselves, working on an hourly or per diem basis, with clients they already know. This is a risky, but still a relatively safe choice when considering leadership talent. Venturing into something that is completely new -whether it be shifting from a paid job to a career in innovation leadership or working on a product or service that needs substantial time and capital investment in order to fly is in a league of risk of its own.
According to some statisticians, more than half of all startups fail within their first five years of existence; figures on innovative startups are even bleaker. A first round of investment is no guarantee for success, either - the generally accepted figure is that roughly three-quarters of venture-backed firms won’t ever return their money. There may be a different kind of return as seasoned entrepreneurs often reveal that the basis for their current success lies in the lessons they learned by failing and starting over, one, if not, multiple times.
So you don’t need to look far to see risk in innovation leadership. Yet many entrepreneurs lack a sufficient understanding of how to judge and deal with risks. In this article we introduce a model for classifying risks in innovation leadership. In turn, we discuss how some of these risks can be reduced or averted, and in some cases even embraced and reframed to mean something positive.