Is Risk Aversion Stifling Innovation?


According to the Harvard Business Review, business leaders are risk averse. I would bet that CEOs have become more risk averse since the great recession began. Before that, a company could recover from a bad gamble in the environment of a growing economy. Since then, the penalty for failure is much more severe.

How can CEO’s encourage innovation within their own companies? In pretty much the same way as before. There are thousands or great articles and books on creating a culture of innovation. The only difference now is that before investing in an innovative new product or service launch, the financial forecast for the launch must include an additional risk factor for economic uncertainty.