Failure to Innovate is the Greatest Risk of all, According to Willis’s
London, UK, April 28, 2014 – The goal to minimise risk opens up one of the riskiest
paths in management: a failure to innovate. This is according to Gerard Tellis,
director of the Center for Global Innovation and Neely Chair of American Enterprise
at the University of Southern California, writing in the fourth edition of Resilience, the
risk management publication from Willis Group Holdings plc (NYSE: WSH), the
global risk adviser, insurance and reinsurance broker.
Firms often fail when they are at the peak of success, noted Tellis. “Success leads to
complacency, arrogance and lack of change. Market leaders often think that the
future is secure and assume a false sense of security and assurance against risk.”
He calls this phenomenon the ‘incumbent’s curse’.
Market leading firms often shun risky innovations because of their high failure rate,
while entrepreneurs embrace them because they have little to lose, explained Tellis.
A focus on the future will enhance a firm’s ability to embrace risk, he continued, and
the best system to help individuals embrace risk is “asymmetric incentives” for
enterprise. Such a system provides strong rewards for successful innovation but
weak penalties for failure.
Other risk management and insurance insights in the latest issue of Resilience
An exchange of big ideas. With private healthcare exchanges cropping up
all over the U.S., interest is high among employers looking to curtail costs,
transfer risk and give employees more control and flexibility. The private
exchange model will prove particularly appealing for employers with high
concentrations of seasonal workforces and those in the retail and hospitality
sectors, according to James Blaney, CEO of Willis’s Human Capital practice.
Big data = big risks? Companies need to ask tough questions about what
data they collect, as governments around the world develop legislation
designed to protect consumers’ rights and privacy. The global legislative
picture is complex and inconsistent, increasing the risk profile dramatically for
those with a multinational footprint. “There is a growing sense around the
world that something must be done, following recent scandals and growing
media scrutiny of companies’ data management,” warned Karl Pedersen,
Senior Vice-President for Willis’s Cyber and Errors & Omissions (E&O) team.
Captives in Asia are taking off. “As Asian companies expand, acquire more
assets overseas and become increasingly sophisticated, they are looking for
alternative ways to manage their risks,” according to Paul Owens, CEO of
Willis’s Global Captive Management practice. “We therefore anticipate Asia’s
share of worldwide captives to grow over the next five to ten years.”
Brazil’s moment. As the eyes of the world turn to Brazil in anticipation of this
year’s World Cup, more fundamental questions are being asked about its
economic, political and social future. But despite recent economic slowdown
and street protests, the long-term future remains bright. “Brazil’s strong
domestic market, fast-growing middle class, natural resources, strong
industrial sector and need for long-term infrastructure investment mean that
the country continues to present an opportunity,” says Jose Otavio, Chief
Executive of Willis Brazil.
Willis Group Holdings plc is a leading global risk adviser, insurance and reinsurance
broker. With roots dating to 1828, Willis operates today on every continent with more
than 18,000 employees in over 400 offices. Willis offers its clients superior expertise,
teamwork, innovation and market-leading products and professional services in risk
management and transfer. Our experts rank among the world’s leading authorities on
analytics, modelling and mitigation strategies at the intersection of global commerce
and extreme events. Find more information at our website, www.willis.com, our
leadership journal, Resilience, or our up-to-the-minute blog on breaking news,
WillisWire. Across geographies, industries and specialisms, Willis provides its local
and multinational clients with resilience for a risky world.
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