5 business leaders on how to balance innovation with risk - and turn your ideas into action

Richard Drury/DigitalVision/Getty Images Follow ZDNET: Add us as a preferred source on Google. ZDNET's key takeaways Bridging the gap between aspiration and achievement isn't easy. Smart business leaders focus on projects that deliver top-line growth. They support staff, work with peers, and encourage experimentation. For business leaders who want to embrace technological innovation, there are many potential risks, from wasting money on failed projects to falling behind faster-moving rivals. Harvard Business Review suggests that bridging the gap between aspiration and achievement requires a systematic approach to transformation. So what might that approach include? Five business leaders explain how to balance innovation with risk. 1. Encourage people to generate value David Walmsley, chief digital and technology officer at jewellery specialist Pandora, said he's less interested in back-end optimization projects than initiatives that drive the top line. "That's my fundamental stance on risk and innovation," he told ZDNET. "Come along with an innovative idea that is going to help us sell more jewellery and make our customers happier, and we're going to lean into it." Walmsley also referred to the company's values, two of which are "we deliver" and "we dream." He said these values work side by side. "We're good at execution and try hard to deliver, but we dream alongside that work," he said. "So, just doing the basics isn't good enough. I want leaders who always consider how they push the agenda, both in terms of their stakeholders and also technology." Also: 5 ways to fill the AI skills gap in your business Walmsley told ZDNET that, in an area like AI, he expects his senior team members to put their ideas into action. "A phrase I've used a lot over the years is, 'We prove by doing,' which is a fancy way of saying, 'Just get on with it, within sensible boundaries,'" he said. "I'd rather people say, 'Look, I thought this might work, and some parts didn't work, but this is OK.' I like people to get on with things rather than overanalyse. And I think that's an approach that's central to our DNA." 2. Get involved in operational discussions Steve Riley, head of IT operations and service management at Mercedes-AMG PETRONAS F1 Team, recognized that motor-racing teams aren't as cutting-edge in their technology deployments as some people might think. Above all else, F1 teams need high-performing, reliable systems. However, marginal improvements can be gained by using new technology -- and Riley said that's why an effective balance between risk and innovation is critical to his organization. "The value add comes with all the new things we can do and the way we can keep pushing the team forward, and they're the things that we should be working on, not necessarily just keeping the lights on," he said. Also: New LinkedIn study reveals the secret that a third of professionals are hiding at work Riley gave ZDNET the example of the team's operations director looking to buy new equipment, such as autoclaves, which are large oven-like structures used to cure composite parts in F1 cars. "On the face of it, that's not necessarily an IT project, but there are definitely IT elements in there, and they're examples of the types of things that are far more valuable for the organization as a whole for us to be getting involved in as an IT team than spending our time just maintaining our infrastructure that we currently run." He said autoclaves are connected to the internet and can be controlled by TeamViewer's remote technology. The prevalence of technology can also be seen in other areas. "We have manufacturing functions that are heavily reliant on IT systems and services, whereas 10 or 20 years ago, that might not have been the case," he said. "So, as technology continues to develop, more functions around our organization continue to leverage it, and that's why we need to be involved in those conversations." 3. Create a safe environment Kirsty Roth, chief operations and technology officer at business information services specialist Thomson Reuters, said business leaders balancing innovation and risk must understand the intricacies of that equilibrium, and that's something she experienced in her organization. "The risk profile at Thomson Reuters was not as good five years ago as it is today," said Roth, who joined the firm in August 2020. "We've put a lot of effort into cyber and security programs and privacy, and all the data stuff around that area. We have a strong AI ethics program. So, those things are cornerstones." Also: Gen AI disillusionment looms, according to Gartner's 2025 Hype Cycle report Roth told ZDNET that she's learned through this process that the more you're on top of risk, the more you can innovate. "You can then create the sort of safe environment where you understand the parameters of where you are taking risks and where you're not, and you're able to move forward," she said. "You can get people who are hampered because they worry too much about risk, or they're too big on innovation, but don't understand the risks of what they're doing. You need a good sense of both so you consciously make decisions about where you're pushing the envelope and what you're doing." 4. Stress-test your new ideas Ed Fidoe, CEO & co-founder of the London Interdisciplinary School (LIS), a new university in London, said innovation always involves risk, and the aim should not be to eliminate risk but to understand and manage it. "At LIS, we teach students to draw from multiple disciplines when approaching this challenge," he said. Biology, for example, highlights the different strategies for survival; some species thrive by spreading risk widely, such as frogs, while others succeed by concentrating resources carefully, like elephants. Fidoe told ZDNET that senior executives must also adopt an endurance strategy: "The key for leaders is to understand which approach suits their context, resources, and long-term goals." Also: I retested GPT-5's coding skills using OpenAI's guidance - and now I trust it even less His institution also encourages systems thinking, recognizing how innovations ripple through supply chains, customers, regulators, and even cultural norms. "This perspective allows leaders to anticipate unintended consequences and stress-test their ideas before scaling them. Importantly, innovation should be framed as a learning process," he said. Fidoe said small, iterative experiments allow organisations to fail fast and cheaply, gathering data that makes future bets smarter. "In this way, risk becomes not something to fear but a source of resilience," he said. "Businesses that embrace innovation responsibly are those that see risk not as a threat to be avoided, but as information that can guide sustainable growth." 5. Embrace a culture where innovation is prized Bev White, CEO at technology and talent solutions provider Nash Squared, said executives must recognize that nothing ever comes with zero risk: "Risk is part of being in business." Her organization's Digital Leadership Report found that 19% of AI investments at companies are now considered mainstream or large-scale, which she suggested can't be without risk, especially given the high failure rate of gen AI projects. However, White also told ZDNET that the risk of failure is no excuse for swerving innovative initiatives. "In our world of constant change, not innovating is in many ways the biggest risk of all. So embrace a culture where innovation is prized and new ideas are encouraged," she said. "Make sure there are parameters so that you're not betting absolutely everything on a new idea -- clear governance processes and controls are needed. If these are well-designed, that approach should mitigate most of the risk." Also: These CFOs are devoting 25% of their AI budgets to agentic AI With those parameters in place, business leaders should encourage innovative thinking. If a project fails, you will learn from it; if it succeeds, you'll gain. "I sometimes say that failing is an incredible gift because it enables us to learn. The greatest inventors failed multiple times before they got their eureka moment. The key thing is not to keep making the same mistakes over and over again," she said. "Use failure as a catalyst to change something else. Experiment and try again. It's also important that there isn't a blame culture around not succeeding. Stand back, discuss things openly, and look for another way." Want to follow my work? Add ZDNET as a trusted source on Google.