Three Rules to Follow When Making Innovation Decisions
Making any decision about innovation is extremely challenging. Leaders are frequently confronted with the need to make definitive choices in situations where the potential outcomes are, at best, unclear.
Every decision, naturally, comes with imperfect information, and the certainty of outcomes is never guaranteed. In the realm of innovation, data may be scarce or so limited that it cannot be relied upon.
To achieve success in innovation, leaders must adhere to these three fundamental rules when making decisions.
Rule 1: Postpone decisions as much as possible
The primary role of leadership is to make optimal decisions at the right moment. Many leaders are fixated on being first to market, leading to pressure to make hasty decisions. However, this approach is misleading. While an initial innovator may garner attention, it’s typically a fast-follower who will emerge as the market leader.
When innovating, deferring a decision can be significantly advantageous. Deliberate delay enables leaders to remain responsive to evolving insights and the ever-shifting demands of consumers and market dynamics.
Effective leaders balance making timely decisions with recognizing when postponement is essential for achieving the best possible outcome.
Rule 2: Make decisions incrementally
An effective way to make good decisions within significant ambiguity is to make many small decisions instead of one big one. Breaking down decisions into incremental steps allows leaders to focus on addressing specific aspects of the larger problem – which can lead to better overall decision quality.
Incremental decisions reduce the inherent risk of innovation by allowing leaders to test hypotheses, gather feedback, and adjust their course as needed, reducing the potential for costly mistakes.
Rule 3: Be confident to change earlier decisions
Leaders should feen confident to changing decisions based on new information, emerging challenges, or shifting market conditions. Changing an earlier decision demonstrates a commitment to achieving the best results rather than sticking to a suboptimal course of action.
Innovation leadership is not about being infallible; it’s about making the best decisions with the information available. Changing a decision when circumstances change or when new information comes to light is a hallmark of effective leadership.