Innovation has become a hot topic in the current climate as businesses seek new ways to achieve growth against a challenging economic backdrop.

However, according to new findings from the consultancy firm liveinnovation, the risk of failure is the key factor holding businesses back. In a recent survey by the firm, 70 per cent of respondents said the main factor that prevented them from being more innovative was the perception that it was too risky.

Martin Jones, principal of liveinnovation, believes firms need to develop strategies to minimise risk. He has this advice:

1. Start inside the box rather than outside - build confidence by taking smaller steps. Begin by applying innovation to an existing process or service and see what improvements can be achieved rather than leaping ahead with a bigger, more radical change.

2. Develop a prototype - prototyping is seen as a way to trial new products but it can be equally useful for services. Testing ideas in a controlled environment will help to highlight any problems and allow you to adapt them before full implementation.

It can also save a lot of time and energy in situations where different parties are unsure as to whether a new idea should be introduced or not. A successful trial will help build consensus and win backing to put your innovation into practice.

3. Get your culture right - it's easy to recognise success, but ensure you positively learn from disappointments and encourage people to try again.

4. Have a framework in place - introducing a formal process will not only ensure innovation is firmly on your agenda but also that it is managed in a controlled way and therefore business risk is minimised. Martin uses the 5i process - identify, investigate, inspire, incubate and implement - which outlines all the major steps.

"Innovation terms have become part of business speak and phrases such as 'continued focus on innovation' crop up regularly in company reports, he says. "Businesses do need to be looking at opportunities for growth, considering how they can do things differently and exploit their capabilities in different ways."

"However the results of our recent research has shown that without a framework in place, innovation will either slip off the agenda or companies will play safe and shun new ideas because they think them too risky to pursue. It may seem a contradiction in terms, but there is nothing as structured as good innovation."