Risk management and innovation management: How risks are turned into opportunities

One of the most common pieces of advice in crisis situations is “You have to look on the bright side and seize the opportunities.” But how does that actually work? How can companies identify and evaluate risks? And how can opportunities for innovation, greater customer orientation or digital transformation be developed from them?

By linking two management systems in the company: Risk management and innovation management. In this article you will learn how to do this.

The risk management of companies: Identifying, analyzing, and overcoming risks

The shutdown in spring 2020 will have long-term effects on economic growth. In the coming months, the introduction of a risk management system will become important for companies. Because a number of new risks are currently emerging:

• market risks due to a change in customer behavior and a change in willingness to buy,
• financial risks due to the loss of important revenue streams,
• risks to the company’s operations from infection risks that still exist,
• risks in the supply chain due to the possible loss of suppliers or other serious changes,

Risk management helps companies to identify and assess these risks and to take measures to counteract dangers.

The “Risk Management Software” module of the Innolytics^® Software Suite makes it possible to collect risks and evaluate them according to criteria such as probability of occurrence and amount of damage.

By using risk management software, risks can be assigned to different keywords such as market risks, financial risks or technological risks. Companies can develop measures and define responsibilities, as well as define tasks and milestones.

The Innovation Management: Recognize and use chances

Most companies forget to change perspective when considering risks. And to put themselves in the role of a person who consistently looks at the opportunities side.

• If the demand from customers changes, what opportunities would an innovative start-up develop from it?
• If you were the competitor of companies in your current supply chain, what would you do to take their place?
• Assuming there is a regular shutdown, what digital solutions could you easily use to keep the business running? What organizational innovations would support you in doing this?

The change from the risk side to the opportunity side is above all a mental attitude. In our article on ideation you will learn more about the principle of changing perspectives.

The module Innovation Management Software of the Innolytics^® Software-Suite supports you in developing opportunities. Employees at different locations can enter and evaluate ideas and implement them successfully with the help of a structured innovation management process.

Connect your risk management and your innovation management!

In many companies, risk management and innovation management are two separate management systems. Both are – as just explained – sides of the same coin.

• Risks hold opportunities for innovation.
• Innovation, in turn, involves risks.

In practice, it makes sense to establish interfaces between the two management systems. This is one reason why both ISO 9001:2015 (quality management) and ISO 56002 (innovation management) have risk analysis as a central component.

The link between risk and innovation management can be achieved, for example, by designating responsibilities that oversee both quality management (which includes risk management) and innovation management.

Link risk management and innovation management with the Innolytics^® software

With Innolytics^® Innovation Management Software, you can map your risk and innovation management on one software platform. Use the software in the free basic version up to 15 users permanently free of charge. Two modules are included in the free basic version. You can create the platform in less than a minute and start immediately.

When creating the software, first select the “Risk Management” or “Innovation” module.

• Set up your free platform.
• Add the second module.

The Innolytics^® software has a modular structure and can be combined with other modules such as “Knowledge Management Software” or the “Complaint Management” module.

How does a risk become an opportunity? In the Innolytics^® software, quite simply: With just one click, entries can be copied or moved from one module to another. The entries are automatically linked to each other.

• If you see a risk as an opportunity, drag the entry into the innovation process with the mouse
• If you see a particular risk in an innovation, drag or copy the contribution from the innovation process into the risk management process.

With the Innolytics^® software you have all the modules you need for corporate and organizational development clearly arranged in one place.