Monday, August 31, 2015

The most common innovation project failures

I had the opportunity to speak to a leadership team that is considering building an innovation capability in their business.  I was asked a question I get infrequently, but one I enjoy answering.  The question is:  what keeps businesses from innovating effectively?  The answer that I think most leadership teams want is:  good ideas.  After all, it's easier to explain away the lack of innovation if you can say that most teams lack good ideas. But a lack of good ideas is almost never the appropriate response to the question. Most companies teem with reasonably good ideas, and in some cases great ideas.  No, the reasons that corporate innovation fails are many and varied, almost as differentiated as the number of industries and business models and management styles that are in evidence.

But there are a number of factors I can describe which severely curtain innovation success when corporations decide to do more innovation.  Those factors include:
  • Failure to adequately define a customer need or business opportunity before deciding to innovate
  • Failure to place the right people on an innovation task and providing them the tools and skills to succeed
  • Failure to define what the word "innovation" means, and what type of outcome they expect:  incremental or disruptive, product or service or business model
  • Failure to encourage any divergent thinking, allowing the innovation teams to quickly converge around ideas that resemble existing products and services
  • Failure to allow time for discovery and exploration, allowing innovation teams to worry about the amount of time they invest in learning new things, always pushing for an answer as quickly as possible
  • Failure to understand the customers' needs and expectations, substituting what internal employees believe that customers want
  • Failure to provide the innovation teams with the appropriate compensation and reward models, and dividing their time between an important innovation activity and urgent everyday business
  • Failure to think through how to transition a good idea (if one can emerge from such a poorly defined process) to product or service development and commercial launch
These factors occur and recur in almost every innovation activity I've ever been a part of.  Note that they have very little to do with "good ideas" and almost everything to do with management commitment, definition, resource allocation and other things that executives and managers are supposed to do well, regardless of the setting.

Most innovation is far too poorly defined and scoped, faces far too much pressure to move quickly and narrow its focus, rarely engages with markets or customers to discover new needs or expectations and actually encourages a divisive setting for team members, where people with passion for new ideas fight for oxygen and momentum with people who are on the team because they were assigned to it, and have no comfort doing work they aren't prepared to do and aren't compensated or rewarded to do well.

Oh, you'll say, what if we actually do all of these things well, and the ideas aren't all that good after all?  What if it really is an issue of bad ideas rather than culture and definition and management.  My response is that most companies have tried innovation without addressing any or most of the items I've identified.  I suspect (in fact I know) that if we can engage good people in the right setting with the right context, good ideas will flow.  We've just established such a negative petri dish for innovation and ideas that only poor ideas can possible dribble out.
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posted by Jeffrey Phillips at 7:53 AM


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