It’s a common belief that intrapreneurs (and entrepreneurs) are natural risk takers.
This impression is perpetuated by press articles that frequently paint a picture of a plucky founder taking a big bet based on their gut. It makes for a good story. But nothing could be further from the truth.
Research from MIT and Harvard has uncovered the reality: successful innovators are, in fact, skilled risk managers.
Intrapreneurs tend to be great at spotting risks, then working on them relentlessly to drive risk out of the business. This is great news for all intrapreneurs. You don’t need some inbuilt intuition or sheer luck to succeed.
What you do need however, is a process and a set of simple management skills.
And so, as intrapreneurs and entrepreneurs our goal is to systematically work to minimise risk.
How do we do this? First we need to understand the types of risk that impact innovation projects. There are three groups.
- Desirability – Do people want our product?
- Viability – Will people pay for it? Can we deliver it profitably?
- Feasibility – Can we build it?
Our goal as intrapreneurs is to find the sweet spot – a product that people want, and will pay for, at a price that covers our build costs and leaves us with a healthy profit margin to-boot.
To achieve that goal intrapreneurs use a three step process:
Identify the risks – Prioritize the risks – Manage the risks
To get started, ask yourself:
- Do you have evidence showing that people want your product? Is it solving their most pressing need? Is the problem worth solving?
- Do you have evidence showing that people will pay your prices? Can you reach your target market? At scale?
- Do you have evidence you can build it? At the scale you need? At the price you need to hit your profit goals?
Use this risk-based project planning approach to identify the riskiest areas of the project then tackle the risks systematically.
Build experiments that enable you to understand the risk better, then mitigate it or embrace it.
Build. Measure. Learn.
Go to it!