Tuesday, June 8, 2021

Innovation Failures

The more dramatic and powerful the innovation is, the greater the risk would be.


Change is coming at seemingly much faster paces, and there are more potential disruptions, with a broader scope, scale, and impact on the business’s long term surviving and thriving. Thus, innovation is not “nice to have,” but must have unique business competency. 

However, in many organizations, innovation is either a lip service or a serendipity. The point is that innovation is risky and statistically, there is a very low success rate. Innovations fail because there are too many disconnects that occur between the birth of a vision/concept and the process of turning it into a reality.

Failure should not be an offence and actually, if there are not a few failures, then you are not trying hard enough. Some say each successful innovation needs at least nine failures. The more dramatic and powerful the innovation is, the greater the risk in the following business factors such as leadership, communication, change management, strategy, process, culture, investment, novices, performance, etc, would be. The job of management is to help when a failure happens to turn it around as a team to achieve higher than expected business results.

Command and control leadership: Innovation fails usually because that innovation invariably has not had top executives’ guidance and sponsorship, or there is very little empowerment and so limited delegation. Most of the time, the company executives’ nervousness stems from the fear of failure and to some extent loss of control. Leadership is a humbling experience. When business leaders try to desperately cling to the conventional norms of "command and control" leadership that they are actually stifling the very creativity that their company depends upon for success and ultimately corporate survival.

Managing innovation requires you as a leader, formal or informal, to shepherd an idea through several phases of development, knowing when to move forward and when to return to an earlier phase. Innovative leaders require the strength to see the old problems from every direction, review a recommendation to a problem or decisions and find different solutions. Innovation leadership concerns the driving forces, visions, strategy, and processes that fuel breakthrough innovation or encourage incremental innovation, providing leadership skills like delegation, decision-making, and monitoring.

Miscommunication: Nowadays, innovation is complex, communication is the glue to integrate all critical ingredients into unique innovation competency. There are different business dialects, communication styles, and business contexts can shift frequently. Silo causes slowness and small-thinking, and generates multiple gaps caused by cognitive difference, internal politics, ambiguous process, mistrust culture or other management bottlenecks, etc, at the different levels of the organization. Miscommunication further leads to misinformation, pre-conceptual judgment, misunderstanding, or mistrust, and causes innovation failures.

Incremental innovation is often facilitated from top-down; and breakthrough innovation sometimes happens from bottom up. People down the organization need to be encouraged to speak up and tell the truth to the upper level. Creativity is encouraged and great suggestions are adopted. However, people have different knowledge bases and cognitive understanding to articulate things, communication has different content, context, and style, and there are differences in goals and contexts. Continuous engagement through formal and informal methods, as well as clarity and transparency in communications thereby nipping uncertainty, ambiguity, and doubt help to spark creativity and build organizational strength to improve innovation competency.

Strategy defect:
Innovation is not serendipity, but a managed process with a strategy as a constraint, to stay focused on building the innovation capacity of the business and unlocking a new market or revenue stream. All strategies are intents. Some of them become actionable with plans. A good strategy enables the organization to build a comprehensive innovation portfolio in a structural way; a bad strategy perhaps misleads the business in the wrong direction or distracts the management from achieving their business efficiency. Some common innovation strategy defects include such as, misdiagnosing crucial problems, unclear goals, ignoring business interconnections and interdependencies, lack of prioritization, poor judgment of business trends or risks, lack of choices, etc. Due to the increasing pace of changes, many strategies lose viability during their expected window of opportunity and become shelfware without action plans.

Companies of all sizes, especially large corporations, are designed to suck at innovation. Efficiency and short-term goal orientation often divert focus from innovation. To be truly creative means challenging conventional wisdom and beliefs, and making progress intellectually and psychologically. A comprehensive innovation strategy is a requirement to value-driven innovation by creating a clear line of sight between the enterprise vision and how to build a balanced portfolio, as well as provide a viable pathway into process optimization and dynamic competency.

Ineffective process: Innovation is a managed process and the mechanism through which you grow and evolve something to something better, higher value-add, or something new, mostly based on a combination or modification of previous attributes/approaches. Innovation does take systematic processes from idea management to innovation implementation. On the other hand, an obsession with the rigidity of efficiency stunts innovation creation. Overly rigid innovation management processes cause innovation failure because such management is about bureaucracy and innovation is about creativity. Innovation does take systematic processes from idea management to innovation implementation. Also, the term innovation process implies an openness to innovative ideas, with an accepted interface into the organization to actually develop and exploit the ideas as they come about.

Unlike many other types of business initiatives, the process of planned innovation shouldn’t be too rigid, the chaos to some extent is necessary for sparking fresh ideas and flexibility is important to make proper adjustments for improving innovation performance. Logically, break down silos and be intentional about developing nonlinear business processes that encourage cross-functional communication and collaboration, and amplify creativity. If Innovation Management also provides a mechanism for the organization to freely express ideas and for these to be built upon, then this model can greatly enhance idea generation within the business. An innovation support process or system can be seen in companies which clearly indicate innovation as required competency for managers, and it's tied to performance management and total reward system.

Lack of change management: Innovation always means change, but not all change is innovative. Not every innovation includes "technology in all its scope," but every innovation includes change processes, and successful management of this change process is vital for the successful creation of innovations. Change management needs to be an integral part of innovation management. You can't do innovation management successfully without grounding in change management. There is the strategic understanding of change management, technique know-how of change management, and here are the psychological factors behind change.

In the phases of innovation, where the idea is evaluated, applied, adapted, and optimized, change management is essential, so that individuals and organizations can benefit from the value of the innovation. When change management is aligned with innovation effort, internally and externally, that change can be part of innovation dynamics. Innovation is the most desired change. It’s important to establish a cross-functional change team to involve the multifunctional management, space and time are made to scope, plan, and execute in a structural way.

Under-investment or over-investment: Innovation, especially radical innovation will benefit in the long range return on investment. It’s important to have a long-term roadmap that shows where you want to be and why it is needed. Under-investment or over-investment could both cause pains as you need to ensure you’re investing in the right initiatives. Often innovation fails because many organizations lack real support by senior management; lack the balls to invest in risks, or lack investment to nurture talented innovators, negation of where budget, talent, and other resources & assets are focused vs.neglected, fail to move ideas through their lifecycle to achieve first to market.

Investments had a marked positive effect on building a healthy innovation portfolio to revenue growth. To make continuous innovation investment, it’s important to tell the data-supported story about how innovation can bring tangible value for the top-line business growth. A few keys to presenting the value of investment are financial returns, return timeline and risk. But some innovation efforts take more time to reap than other business initiatives. Wise investment practices along with a good innovation portfolio strategy with intended objectives, financials, and risk profiles in the portfolio can build innovation capacity of the business and significantly improve business advantage. The success of innovation investment is usually based on how they enable business growth and support the business objectives by delivering innovative solutions in time to the market perspective.

Culture inertia: If creativity is the seed, culture is the soil to nurture innovation. Without the culture of learning and change, risk taking, the organization’s innovation efforts cannot blossom. Culture inertia, silo, bureaucracy, or risk avoidance, etc, stifle innovation and decelerate business speed. An innovative leader will spend more time on contemplating the new possibilities, increasing the firm’s pro-activeness and willingness to take risks, pursuing innovation opportunities, pioneering the development of new products, processes, and services through enriching its competitiveness,

A culture of innovation means to encourage learning and discovery, challenge the “we always do things like that” mindset, cultivate the new generations of innovators, and have risk intelligence to manage both opportunity and risk accordingly. Technically, cultivating a culture which inspires creativity starts with personal awareness and change of mindset, instills openness and inclusiveness, enforces the “reward success and failure" logic that you reward people for trying new actions, and doubly reward them for successes. If you punish failure, you shut down innovation immediately.

Lack of innovators: Creativity becomes significantly important in the age of advanced technologies and abundant information, frequent disruptions and fierce competitions. The opposites of creativity include outdated concepts, traditions, mediocrity, old habits, dogmatism, social conformity, stereotypical thinking or preconceived ideas about how things should happen. Lack of innovators, or more precisely, lack of the wise eyes to recognize innovators cause innovation to fail. Too much emphasis on control, not on enabling.

Are you intending to evaluate the capacity/potential to innovate, or the level of past innovation based on performance measure. Spotting and scoring individuals as an innovator needs to focus on individual capabilities and potential to innovate, continue to discover, explore, and improve their surroundings. Collectively, the heterogeneous team with the cognitive difference is more innovative than the homogeneous group setting. Focus on individual capabilities and potential to innovate. The indicators to assess the intrinsic capacity of individuals such as: interdisciplinary skills and knowledge, learning agility, cognitive ability, creative problem-solving, etc.

Ineffective performance measurement:
In many companies, a pervasive obsession for purely numerical success indicators sweeps aside much of the softer, more qualitative information that is crucial in understanding the health and well being of the firm's innovation efforts. Many say that monitoring or measuring is the "philosopher's stone" of innovation. The change in the value of innovation projects portfolio and distribution of your portfolio in terms of incremental vs disruptive, local vs global, core vs far from core industry, small vs big investment, offering- production- delivery- customer experience, competitive vs. collaborative etc., depending on your strategy.

You choose innovation KPIs by deciding which are seen as critical to making progress in order to deliver more innovations. The fewer the better, but they have to be credible and relevant also in the eyes of the stakeholders. The goal is to show how the pieces of measurement data directly or indirectly affect business productivity, performance, and profitability. Failure is part of innovation. Measure failures as well. If the organization allows reasonable failures, not repetitive mistakes, it will be more successful in innovation for the long run.

Innovation for the sake of innovating is exhaustive because what would be the purpose? Environment either encourages or discourages innovation, the ease or difficulties inherent in surviving: Too easy? Too difficult? What elements did past civilizations possess that added to innovation? Failure is inevitable for innovation, the fact is “fail fast and fail forward.” That said, sometimes more is learned and gained from failing. The key is to fail fast. Opening up a spirit and opportunity for people to stretch and try new things will in the end generate many more returns than were ever thought possible!


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