Imagine that you have one million dollars and the assignment to invest it in innovation projects. It sounds like a dream for many people, to be the one to create the future. But it is also a challenge. Because suddenly it is no longer about visions, but about choices. How much do you really dare to invest?
You are faced with three possible paths. The first is to invest in improvement projects, low-risk initiatives that are cheap and fairly safe. They create small, incremental improvements and rarely fail. With a budget of one million, you can start twenty such projects.
The second path is change projects. They are a little more expensive, a little more uncertain, but can also provide greater returns. With a hundred thousand per project, you have room for ten of them.
The third path is to invest in the truly groundbreaking ideas, the disruptive high-risk projects. But here the cost is high: half a million per project. That means you can only afford two. And if both fail… well, then you’re left empty-handed.
Innovation pays off, but it still feels wrong
The statistic speaks for itself: companies that invest in innovation have higher profitability than those that don’t. And the better they are at taking risks, the more it pays off. This applies at all levels, from the most cautious improvements to the most daring projects. In fact, those who dare to invest in high-risk projects, on average, earn the most.
How is it possible, despite the fact that so many of these high-risk projects fail? Well, when they do succeed, they often succeed spectacularly. Take Apple’s launch of the iPhone as an example. It was a disruptive, high-risk project, but one that changed entire industries and brought the company enormous profits. Or think of the impact of the internet and the incredible growth of those who dared to invest early in digital solutions.
But for every Apple, there are dozens of failures. Projects that never took off, ideas that never came to fruition, and money that never came back. This is what makes investing in innovation so uncomfortable. It requires courage and, above all, leadership that is able to handle risk and failure.
The fear of failure and losing face
When we talk about risks in companies, it is easy to think that it is about budgets and strategies. But fundamentally, it is always people who take risks, not companies. And people are afraid of failure. Not least because it can have personal consequences.
Imagine yourself as responsible for those ten million. If you invest everything in two high-risk projects and both fail, there is a great risk that you will be seen as a person who carelessly wasted the company’s money. It does not matter if you had good intentions or the right logic. You failed. It can affect your status, your salary, maybe even your employment.
Therefore, it is not uncommon to spread the risks. You invest a little here, a little there and hope that something will hit the mark. It looks balanced on paper, but in reality it often means that no project gets enough support or courage to really succeed.
The role of leadership in the innovation culture
This is where leadership becomes crucial. For innovation to work, you don’t just need money, but a culture where people dare to take risks. A culture where it’s okay to fail, as long as you learn something. And a culture where success is not always measured in dollars, but in insights, lessons learned and long-term change.
But not all leaders are equipped for this. In some organizations, a top-down and controlling leadership style prevails where mistakes are seen as weakness. There, people don’t dare to risk anything – and then there is no innovation either. Instead, people get stuck in a copying culture, where they wait for others to show the way. This type of culture has been common in parts of the world and is also seen in companies that are under severe financial pressure.
On the other hand, there is also the opposite, leaders who take too many risks, who follow their own convictions without listening to those around them. Steve Jobs is a famous example. When he succeeded, as with the iPhone, he was hailed as a genius. But his previous failures are often forgotten. In the same way, you can see leadership like Donald Trump’s where great, visionary moves are mixed with a lack of risk understanding and responsibility. The result can be both success and complete disaster.
It’s about more than numbers
So how should you actually invest your million dollars?
Perhaps the most honest answer is: it depends on the people who do it. Because it is their risk-taking, their security and their understanding of innovation that determine the result. If you don’t know where you stand yourself, how are you going to be able to lead others?
Perhaps the very best project is one that is about developing the organization’s innovation culture. Creating security, trust and a shared understanding of which risks are worth taking, and why.
Innovation is never just a business decision. It is a human process, where we must understand our fears, our drives and our limits.
So before you choose the projects – choose to build courage.
