In business, innovation is a must. If you want to remain relevant and profitable, you need to make innovation a habit.
Case in point, famous innovators such as Apple, Samsung, and even Uber, have become leaders in their respective industries because of their remarkable innovations.
However, there are also giant businesses and corporations that fell because of their failure to adapt to the changes that their market required over time.
Hence, in this article, you will learn why corporate innovations fail and how you can avoid potential repercussions in the future.
What is success in innovation?
To different people in the corporate world, success in innovation appears to mean at least a few different things.
Success in innovation may signify new technology, products, or services as well as new methods for developing and delivering them that meet market needs.
However, success in innovation anchors on three things:
While it is true that failure is an inherent part of innovation, it may cost your company’s overall success when left unmitigated.
That’s why you need to understand the reasons why this may happen.
Why do corporate innovations fail?
Here are some reasons why corporate innovation fail:
1. Misalignment of the innovation focus and the business
Paradoxically, the reasons for failure for many innovation efforts occur after they succeed.
This often occurs when there is a failure to integrate or incorporate innovative projects into basic company operations.
It’s not that the industries or organizations that are most vulnerable to or have already been disrupted can’t or don’t have smart individuals who can come up with ideas…
It’s their inability to develop and incorporate such ideas into their operations that do them harm.
To avoid this, you can align three things:
- Innovation strategy. Operating executives having a vested interest in innovation strategy should create robust teamwork between operating executives and innovation teams to ultimately meet demanding financial objectives and market needs.
- Customer focus. This happens when the focal point of your innovation strategies is a market or a customer need.
- Technology. There must be systems and technologies robust enough, mature enough, and scalable enough to support your idea.
2. Lack of innovation culture in the company
Innovation culture has been discussed for a long time, yet it has remained a difficult and frequently disputed subject among different business and innovation leaders.
But considering the significance of innovation for business and the fact that company culture has been shown to be the most potent and elusive barrier to inventive performance, innovation culture is pointed to be a primary concern for many.
Here are six proven ways of developing an innovative culture:
- Implementing an innovative culture begins with leadership that stresses transparent communication and cooperation above a centralized team structure
- Cooperating with your company’s present cultural model while gradually implementing new adjustments
- Clearly defining the end objective and expected outputs without micromanaging the process
- Supporting employees who are expected to contribute to an innovative workplace by ongoing education and training in their field
- Focusing on long-term ROI for companies committed to creativity and development
- Acknowledging and compensating marketable ideas when encouraging innovation to the business
3. No one is tracking success indicators
Too frequently, innovative ideas fail because entrepreneurs do not understand how their company works.
They fail to record any departmental measurements of their performance and operations throughout the year, resulting in a stagnated business with no idea what is causing the problem.
A key performance indicator (KPI) should motivate you to attain corporate or organizational goals, which will eventually push you to achieve growth or advancement. You need to identify and track these KPIs for the health and success of your business.
- Financial metrics. Examples of these are your revenue, profit margins, and net profit.
- Metrics for customers. These include per-customer efficiency, the satisfaction of the end-user group, and customer retention.
- Process performance metrics. Process performance metrics are used to track and assess operational performance across the company. These metrics show that tracking success indicators do not have to be primarily based on financial data.
While profits, debts, and the overall cash flow of your business are crucial indicators of growth, a company’s commitment to excellent performance and relationship with its workers and customers is vital in establishing its overall health.
4. Weak leadership at the head of corporate innovation
Leaders play a major part in establishing an innovative mindset within the company.
Granted that major decisions are made by top executives, their decisions influence a lot of things that may make or break innovation success.
Hence, an organization needs a strong-willed leader who can stand his ground and implement innovative practices that enhance creativity — someone who fosters, promotes, and rewards innovation culture.
Not to mention, a leader who is:
- Not afraid to take risks. Challenges concerning innovation will always be present, but if you want to thrive, you need somebody who is capable of measuring the pros and cons of every business endeavor — a leader who takes calculated risks.
- Resourceful. Companies need resources to execute projects and other innovation-related activities. Hence, a leader should know how and where to get them.
- Open to suggestions. The best leaders are those who know and acknowledge the significance of their employees’ insights, which can eventually turn into breakthroughs for the company.
- Ready to adapt to trends and other future changes. Businesses need executives who understand that adapting to changes is key in remaining relevant in the industry.
5. Choosing the wrong problems to solve
Some businesses struggle to identify the right issues to address, which means that they end up creating concepts without real value.
In innovation, most ideas fail because they did not go deep enough in the beginning phases of the process, which includes identifying an issue and finding its most appropriate solutions.
In the end, they end up developing insignificant outputs, which can sometimes mean costly alterations later on.
To avoid this, you can connect with your customers and end-users in mind. You can ask them what issues they encounter when using your products and services.
On the other hand, when you’re an aspiring entrepreneur who is still in the process of looking for a viable concept to pursue, you can begin asking your family and friends for the common problems they face with a theme or product of your choice that’s available in the market today.
You can find out what your future competitors lack and start your way there. Or you can also start various surveys and idea boxes if you already have an industry in mind.
6. Too much push instead of pull innovation
Innovation can be classified as either push or pull.
When a business first recognizes a genuine consumer problem or need and then searches for a solution, the innovation is labeled as “pull”.
On the other hand, a “push” innovation occurs when an organization creates new technology capabilities first and then looks for issues to fix with them.
The problem with “push” innovation is this:
Businesses spend money, time, energy, and manpower on them without creating real business value. Hence, resources end up wasted as the product remains unprofitable.
7. No uniform way of working
Without a united way of working, leaders and people cannot combine their strengths, talents, knowledge, and expertise.
As a result, their approach to innovation differs, which results in difficulty towards collaboration as well as innovation failure.
On the opposite, when an organization presents a united face in addressing issues, employees feel more linked to the company’s values and objectives.
They become anchored on a culture where everyone works with a single objective in mind — success.
Despite the lack of a one-size-fits-all strategy, companies that establish a clear innovation route that defines each employee’s position in the innovation process create progress, growth, and success.
As a consequence, expectations are clearly defined and met.
8. Fuzziness of innovation
There are various stages to an innovation project.
The first three components (problem finding, solution finding, experimenting) comprise the fuzzy front end of the creative process.
These are the most critical phases in which innovation teams must get stakeholder permission before moving forward with the next innovation steps.
Because it serves as the foundation for the innovation initiatives, the quality of the work in the front end defines the degree of innovation and the success of innovation in the subsequent phases.
As one does not always know what to look for in the front end, it is sometimes referred to as “fuzzy.”
Once overlooked, the entire innovation process ends up lacking in structure, openness, and flexibility.
As a result, ideas are not managed properly, and innovation projects obtain a high risk of failing.
9. Fear of innovation failure resulting in paralysis
As an innovator, you must be able to deal with change, unpredictability, and failure. If you’re not prepared to fail, you will never succeed unless luck kicks in.
This is why when it comes to innovation, experimenting is essential. Small-scale failures help entrepreneurs understand what works and what doesn’t.
As a business leader, your fear of failure will impair your decision-making abilities. Not only that — it will also hinder your personal (as well as that of the organization’s) potential to succeed.
To help combat your fear of innovation failure, make sure to establish a clear innovation route before starting an innovation project.
Align your innovation endeavors with your business plans and strategies, and allocate sufficient resources for your innovation activities.
Moreover, build a culture of innovation for solid organizational support.
The Price of Innovation Success
Innovation helps businesses thrive. This is the reason why every entrepreneur should know what innovation is and why this process is crucial for the success of the business.
When a company innovates, it can enhance its present products, processes, procedures or even create whole new ones with business value.
However, it comes with a price as it does not happen overnight.
It requires hard work, perseverance, energy, resources, effort, and time that its very concept must be established within the organization’s culture.
It requires alignment with business plans, determined leaders, lots of ideas, the right issues to solve, and even determined leaders that can strongly implement practices that foster innovation within the organization.
True enough, the price of innovation success may be high, but its benefits are definitely worth it.
Grab a free copy of our innovation ebook today to learn more about implementing innovation within your company, or book a free demo with us now.