5 strategies to reveal the invisible risks of the status quo

All innovation has to deal with the mind’s bias to overemphasize the risks from change, but ignore the dangers of things as they are.

It’s frustrating when colleagues and employees cling to the past while you’re trying to introduce original new ideas or strategies. But it’s natural. Your colleagues are probably caught in the cognitive bias in favor of the status quo, and consider it more secure and stable.

Desicion-makers carefully explore the risk of taking each course of action, and all new developments are analyzed and considered before being implemented. But they often forget to make a similar assessment for the risk of keeping things as they are. If we only see the risks of changing, the natural result is that we avoid taking decisive action. But dismissing the risk of the status quo doesn’t mean that problems won’t materialize; it just means that you won’t be prepared when they do.

If you are a member of a leadership team that faces a critical strategic decision, you need to address these biases before inaction makes your business irrelevant. In a changing world, staying the same is never a safe option.

There are several strategies you can use to make sure you don’t underestimate the status quo risk:

Address the risk. Like with all bad habits, the first step in dealing with a bias is to identify it. At any strategic meeting, be sure to assess the risks not only of new projects, but also of doing nothing. Cognitive bias makes the status quo feel well-known and safe, but change can take us by surprise.

Identify trends. Change happens systemically. To motivate your organization to change, identify social, economic, political, regulatory and technological trends in the next 5 years, and ask yourself how they will affect your business. These changes at the macro level will affect what customers and users need or want.

Measure the risk. Develop a risk profile for your current strategy using the same framework you use to evaluate your new strategic options. If you measure the risk of your strategic options in terms of brand risk, operational risk, market risk, etc., do the same for your current strategy. Having comparable metrics will allow you evaluate your options clearly and with balance.

Manage the risk. Everything new goes through a process of a trial and error, and innovation without risk does not exist. This is why risk aversion is poison for innovation. The only way to eliminate it is by focusing innovations on underserved human needs and running many rounds of inexpensive tests. Being comfortable with uncertainty is useful, but you should not invest resources without having refined your initiatives. To increase your certainty and limit risk, use methods like design thinking, and practices such as rapid prototyping and minimum viable product.

Balance exploration and exploitation. Organizations prioritize exploitation of current business models because they feel it’s well-trod ground that will give them short-term results. But by focusing only on the present, they neglect the future. You can dedicate 20 percent of your time to develop and implement exploration initiatives, and use the rest of your time to maintain your operations. Or you can seek the advice and support of outside experts whose time and expertise are 100 percent focused on helping you build the future.

It is common — and sensible — to manage risks with awareness, disciplined processes and due diligence. Unfortunately, we are more likely to apply these tools to assess the risk of a change than to assess the risk of remaining the same. If the status quo is anchoring your business in the past, now you have tools to understand and evaluate it.