If we want to profit from innovation we still need to reward risk
As organisations still count the reputational and financial costs of a free-wheeling approach to risk in both the private and public sector, you might say that KPMG’s HR practice could have chosen a better time to put out a report calling for organisations to encourage risk and experimentation.
But with its focus on the link between innovation and risk the report is a timely one.
Of course we all must learn from the high profile failures in banks and organisations where the blind pursuit of profit led to corrosive short term risk-taking with little thought for the consequences.
Equally we can’t forget the virtue of risk: it is people who think beyond existing rules, have new ideas and are prepared to experiment that provide the oxygen of innovation. Without finding new and better ways of doing things organisations atrophy, people go stale and customers desert us.
But to achieve this we have to approach risk in the right way.
If there is anything we learning from the banking failures – and notably Barclays’ recent attempts to recover from them – it is that risk taking has to take place in full view of peers and managers in an organisation.
We also have to define what a healthy approach to risk looks like so every individual knows what’s on and off-limit for themselves and others. Only then can we work towards building and sustaining the right behaviours.
It is here that culture, performance management and reward must to go hand in hand in creating the right environment to attract, retain and recognise the right employees.
Coming at a time when Engage for Success is banging the drum around the importance of values in organisational performance and the CIPD’s Peter Cheese talks their role in rehabilitating the fortunes of the financial services sector, you could say that KPMG are doing no more than riffing on a theme that others have played already.
To a certain extent this is true. But by highlighting the link between culture, HR and innovation the KPMG report makes a pointed reminder for us all be clear about what will drive a successful commercial future rather than have a judgement overly clouded by the mistakes of the past.
This article was written by Andy Philpott
Author: Andy Philpott
| Category: Blog
| 19/08/2013 |