Adapting to Innovation Risks

Caroline McDonald


June 1, 2018

innovation risk managementAs business evolves globally, organizations are facing an unprecedented rate of change, which in turn brings pressure to innovate. While innovation is necessary to move companies forward, it also presents another set of risks.

PwC’s 2018 Risk in Review Study found that 60% of risk executives consider their risk management program’s ability to manage technology risks including artificial intelligence, IoT and robotics to be very or somewhat effective.

These individuals, which PwC labeled “adapters,” exhibit five key characteristics: They are twice as likely as non-adapters to advise on innovative activities before the planning stage and, using risk assessments, are more likely to halt initiatives and suggest alternatives; they take more actions to manage innovation risk exposure, including revisiting objectives and strategy and sharing the risk with other partners; they are able to adjust risk appetite and tolerances more frequently; they are more likely to strengthen their risk management capabilities to support innovation strategy by adding new skills and using new tools; and they use multiple methods to assess their risk management effectiveness.