9/11/2022
Innovation starts with de-risking
Every good innovation begins with the removal of risks. Huh? But isn't innovation about taking risks? That's correct. However, to make innovation succeed, it's wise to employ 'de-risking.' With de-risking, you efficiently eliminate the major risks of an innovation in a short amount of time. This prevents you from investing a lot of money and time into a project that yields nothing.
At MakerLab, we work a lot with the lean method. This means that we efficiently validate, optimize, and bring innovations to the market more swiftly. Risk management is also a part of this. We test the most crucial assumptions that determine the success or failure of a proposition.
De-risking at start-ups and corporates
De-risking is employed in all types of organizations, from small to large. Risk management can be useful in both corporates and startups, for example. In startups, in fact, even before the company takes off. Does the product or service actually solve a problem? If there's no problem: why do customers want to spend money on it?
In larger organizations, you can use de-risking to assess the feasibility of a (new) product or service. For example, suppose a department has an idea for an innovative product, but the operational departments do not have the manpower for it. There's a high chance that the product will end up being a failure. De-risking can help prevent this. We examine potential internal and external obstacles to innovation and make adjustments accordingly.
De-risking with qualitative and quantitative research
In both a large and small organization, de-risking begins with qualitative research. For example, we organize interviews with the target audience and stakeholders. If these interviews validate our innovation, we also want to test it quantitatively. We test whether potential customers are willing to pay for a product or service. If so, how much?
Next, we assess what hardware or software is required to bring that product to the market. Can the company provide all of this? And how much will it cost? The most crucial aspect of this process is asking the right questions.
At MakerLab, we work closely with the companies that hire us. They are, after all, the experts in their field. They know what already exists, how their market has behaved so far, and how their current products have been developed. Often, there is a wealth of knowledge within the company, which has led to a desire to innovate. We are here to assist with this innovation journey. That is also where our strength lies.
We achieve this, among other things, by investigating where the major risks lie, by asking the right questions, and thereby exposing risky assumptions. We can then test these risky assumptions for the company. Depending on the testing objective, we select the appropriate method. For example, think of questionnaires, simple prototypes, or landing pages.
With risk management, we not only mitigate risks, but we also enhance the product or service. During the de-risking process, we gain insights that can further advance innovation, making it even better. This way, product development goes hand in hand with de-risking.
De-risking within a large organization
A good example of the importance of de-risking can be seen in a large corporate with which we collaborate extensively. In this organization, the need for an additional service had already been validated.
But in order to implement this service, you must consider all stakeholders. From IT to customer service, and from the legal department to data processing. Each department has its own KPIs and a unique approach. If you want to successfully implement innovation, it's important that it aligns with the existing skills and methods of the involved departments.
The first step is to understand how the current process works and what interests each department has. This should be well documented before implementation. This way, you will know which interests are conflicting. Departments need to be aligned, or else your innovation will come to a standstill during the implementation process.
By having these kinds of things in order beforehand, the chances of your innovation entering the market and being consistently successful are much greater. And that is the goal of MakerLab.
De-risking at smaller organizations
MakerLab also supports smaller organizations and projects, such as Hacking Health. This is a hackathon in which participants and healthcare professionals brainstorm, develop, and present an innovation to healthcare institutions over three days. De-risking is a significant part of this, which is why MakerLab coaches the groups participating in this hackathon.
How does this work? First and foremost, we identify a target audience and the pain points that this target audience experiences. After the hackathon, we also conducted a 'Stakeholder Mapping Workshop' for the winning teams to delve deeper into the selected innovations.
Who are the stakeholders? What are the value and cash flows? And where do the most risky assumptions lie? There are often far more stakeholders involved than you initially anticipate. The patient doesn't always pay for healthcare, as other organizations are often involved as well.
We look at where the money comes from, who the key stakeholders are, what KPIs the stakeholders have, and what the budget for innovation is. These are crucial points in the de-risking process. By mapping out the risks, you can systematically validate and mitigate them. Hacking Health has yielded many promising outcomes, such as startups or innovations being adopted by larger organizations.
Risk management within MakerLab
It's nice that at MakerLab, we can always brainstorm with colleagues. We also share experiences with each other, so that everyone learns from it. On one hand, that's an enriching experience, but on the other hand, it's a challenge. We can't simply rely on validation methods that worked in the past. Each project is different, and it's important to realize that. In that regard, we help each other stay sharp.
