How to defeat "Loss Aversion" - the #1 reason why middle managers kill innovation

Loss aversion is a psychological bias where people prefer avoiding losses to acquiring equivalent gains. The fear of losing what a person already has coupled with the tendency to avoid risk, especially pronounced in middle managers, inhibits support for new ideas within established companies despite CEOs repeatedly stating the importance of creativity. Loss aversion causes managers to be risk averse, demanding more evidence of project viability before investing and ending innovation projects early if they are not initially successful. A portfolio approach to innovation management, where a dedicated team manages a budget for innovation and assigns it as they best see fit, lowering the cost of failure and focusing on the overall net impact, reduces risk and better supports innovative and experimental projects and programs. Other strategies include using lean innovation management, understanding the effect of loss aversion and other biases on decision making, and increasing the likelihood and payoff of success.