Top 10 Reasons Why Innovation Fails

24/02/2013

In periods of less economic stability and less certainty, a lot of companies and organisations seek refuge in the magic word “innovation”. Or even better, sustainable innovation succes.

They want to create new markets or new products, hoping to find the ultimate idea in order to win over increased competition. Well, they’re absolutely right in doing so, but in most cases it won’t help them in the short term. Innovation has a long-term impact.

Creating ideas and bringing them to life

A lot of companies that try to develop innovation fail. The reason for this is that they are confusing “creativity” with “innovation”. Innovation is not just about inventing or creating ideas for new products or services.

Real innovation is a comprehensive company-wide process. Innovation is about “Creating ideas and bringing them to life”.

Unfortunately, there are far too many companies with tons of ideas which are covered in dust and filed somewhere in a cupboard, worth millions, but never implemented. If you don’t implement the idea, your idea is worthless.

Innovation is NOT a marketing discipline. A lot of companies that are starting out with innovation tend to place this discipline into the marketing department.

They push the innovation role into the roles & responsibility of marketing experts. This is a mistake. Innovation is a completely different process, nothing like marketing. If you want to be a really innovative organisation, with sustainable success then set up a separate innovation department.

Marketing experts have different goals. Marketing goals are often too short or middle-term. Innovation goals are always long-term. Typical innovation goals are:

“within 5 years, 20% of the revenue should come from ideas that don’t exist yet”, or
“implement at least X new ideas per year”

The innovation playing field

Innovating is stretching your company’s future by creating new value in several ways: in potentially new markets, with potentially new core competences, through new processes, or based on new (industry-wide) strategies. In general I distinguish 3 categories of innovation:

strategic innovation,
product innovation and
process innovation.

Strategic innovation is about creating new business models, new value chains or a new way of creating value. Product innovation is about creating new products, new services or just new innovative value-added services.

Process innovation is about optimising processes, e.g. a new production process leading to a drastic decrease in the production cost, or a new customer service process leading to increased customer satisfaction.

Not all innovations will have the same impact on the company. For a real breakthrough innovation, you’ll need 3,000 ideas; some of the innovations will be incremental or substantial but unfortunately most of them won’t create any value whatsoever. Some examples:

Sustainable innovation success

If you want to get involved in innovation in your company, or if you want to improve your company’s innovation practises then create an Innovation department, alongside the other departments, with its own objectives.

Don’t even begin if you haven’t got top management support. This is really essential. If you haven’t got this support, don’t do a thing. It would be a waste of time because top management will close it down, as soon as there is short term pressure on results.

Consider innovation as a process. To keep it simple, I distinguish 4 steps in the process: (1) ideation, (2) valuation, (3) sensing and (4) implementing. Some companies have an ISO Certified innovation process.

The ideation phase

The ideation phase is the phase of creating new ideas. To create ideas you will need a separate process, an idea engine. Putting an idea box at the reception desk simply won’t be enough.

You need a permanent process of idea creation through creativity workshops, brainstorming sessions etc. An idea box at the reception desk might be one way of gathering ideas.

Trend analysis, benchmarking and in-depth customer insight will be necessary to feed the idea engine. Challenge dogmas.

Involve the whole company in the idea creation process. Stimulate – financially or otherwise – everybody in the company to participate in the process. Not only the management. Everybody!

Also involve suppliers in innovation and seek ideas from customer groups. A great recent example of customer involvement in innovation is Bicky Crisps by Lays.

Developed by their customers and … the inventors get 1% of the turnover too. Involve customers in new ways. Social media makes it easy for you.

Focus on creation value, not on competition. Focus on benefits, not features. Will your new product or service save the customer time, improve his/her social standing or solve a problem better than existing solutions? This makes your innovation valuable.

In order to obtain success, your core innovation team needs to be a heterogeneous unit. You will need experienced people that understand the business thoroughly, with the ability to be creative and with an intrinsic motivation to innovate.

The selection of the driving people is key to the long-term success.

The valuation phase

Once you’ve collected ideas, you will have to manage them. If you have a smooth running ideation process, with lots of ideas, you will need an idea management system to keep track of them and to assess the ideas.

Every idea needs to be assessed in terms of relevance, customer value, feasibility, sustainability, effort and contribution to the objectives.

If you want to keep on motivating the people who contribute ideas, you will have to communicate about the ideas’ status, the output of the assessment and the next steps. If you don’t do this, the ideation engine will fail to create ideas fast enough.

Sensing and implementing

Once you’ve collected and assessed the ideas, you will have some valuable concepts, with a sound business case, validated by top management. Before implementing these ideas they need to be tested in real life, with customers and/or partners.

This is what we call the sensing phase. This phase is important because customers won’t always be as enthusiastic about all ideas as you’d expect. Some ideas that passed the assessment and that have a sound business case will fail in the sensing phase and won’t be implemented.