Six Innovation Failures That Can Destroy Your Organization

Innovation is Directly Tied to Business Success & Longevity

Lately there is a lot of talk about innovation. Market leadership is only temporary absent regular innovation. Those companies that either fail to attain a position of market leadership or surrender market leadership to rivals are generally either failing to innovate or innovating to fail. We know that organizations that are failing to innovate or innovating to fail are even more exposed in times of crisis or market disruption as our current situation shows. Over time, these organizations will lose value and are likely to suffer traumatic internal disruption.

Failing to Innovate VS. Innovating to Fail: What’s the Difference?

Failing to innovate is self-evident. A company, either through hubris or lack of urgency, does not see the need to innovate. Either they believe themselves to be the unassailable leader or they view innovation as a risky and expensive endeavor not fundamental to their business success. For some businesses, good enough is good enough. There is neither an appetite to grow the business significantly, nor a willingness to risk resources on uncertain returns in the future when current opportunities abound with existing products and services. Those businesses are unlikely to grow significantly or reap high returns over time and expose themselves to significant risks of failure during unforeseen market disruptions like our current COVID-19 pandemic.

Failing to innovate is a conscious choice made by the business leadership. It is an active choice to not pursue future growth and focus instead on the present business. Periodically, there may be merit to focusing exclusively on the present, but in general, this is not a sustainable path to long-term growth. 

We have all seen examples of companies innovating to fail. Companies that are innovating to fail throw large sums of money at innovation programs with little or nothing to show for it. In the end, they are late to market with their product, remain industry followers and have in turn burned precious resources in the process.

Of the Two, Innovating to Fail is Far More Destructive. 

Often companies that are innovating to fail are deluded in their efforts; believing that they have a robust innovation program and competent development processes. Often these companies have deep innovation funnels, sophisticated stage-gate review processes, product councils and extensive reporting metrics regarding their innovation pipelines. In reality, there are poorly developed or misguided product ideas clogging the funnel, pet projects championed by business leaders with powerful personal presence, inadequate stage gate reviews that perpetuate underperforming projects, poorly coordinated launches and institutional barriers that can deny good projects resources and turn market leaders into “me too” products. Innovating to fail is more destructive because you reach the same endpoint as failing to innovate but expend considerably greater resources getting there.

Innovating to Fail is NOT a Talent Issue, but a Leadership Issue.

Usually, these companies have very capable individuals in place and do not lack talent or resources. They are simply being constrained by inadequate leadership and incapable internal processes.

Here’s the 6 ways innovation failures can be your downfall:

[1]         Failure to innovate at all.             

[2]         Failure to understand what your customer values.

[3]         Failure to adequately resource innovation.

[4]         Failure to execute innovation.

[5]         Failures of discipline in bringing innovation to market.

[6]         Failing to embrace innovation across the entire business. 

Truly innovative companies innovate at all levels of their organization – innovation is not exclusively an R&D function. And there’s a lot more to innovation that just lists of things NOT to do. In the coming weeks, look for more articles from me exploring each of these innovation failures in greater depth.