Promoting Innovation and Accountability

The two key qualities to promoting innovation and accountability: risk acceptance and corporate governance.

Businesses are naturally determined to do everything in their power to safeguard their profit margins and protect their market shares. They must not, however, fall into the trap of letting risk aversion get in the way of unlocking the potential for even greater earnings and market value.

We often see companies labouring under a false sense of control, safety, and stability. They cling to reason as a mechanism of risk-aversion and as a result, they curb their innovation and initiative and shut themselves off from new opportunities. This, in turn, exposes their inherent weaknesses and relegates them into a position of following rather than leading.

On the other hand, companies that push the envelope with innovation and pioneer uncharted territories end up controlling the future direction of their commodity. And apart from making headlines and earning the respect of their peers, they eventually enjoy higher profits for longer periods.

To avoid looking at the business from a very narrow perspective, ultra-cautious companies need to introduce broader measures of success and move beyond mere financial outcomes such as shareholder value and net margins. They need to transform their current business practices, cultures, and styles. This is possible through a systemic change in the two key areas of risk acceptance and corporate governance.

Both risk acceptance and governance are essential to encouraging innovation and accountability and reward on both individual and corporate levels. We believe risk management and good governance should not just be limited to their respective corporate functions. They are in fact human qualities that can be deployed and trained assuming there’s enough willpower.

Businesses need to assume a higher degree of uncertainty and promote a culture that welcomes risks as potential opportunities in disguise in order to unleash their creative innovation. Creating such an adventurous culture requires a focus on life-long learning and reskilling in the workplace while taking advantage of emerging technologies and fostering initiatives at all levels.

At the same time, and at all times, businesses need to exercise good governance and retain control of their strategic direction. From a culture standpoint, companies need to encourage a good sense of judgment and establish a common ground between micro-level thinking and corporate goals on the macro-level.