Why does corporate innovation fail?
Originally written for Black Marketing, Singapore.
In recent years, ingenious leaders such as Jeff Bezos, Elon Musk or Larry Page have taken the stage and are constantly breaking new ground in the technology industry. Since then, the business sphere has been beset with a new and fundamental concept: Innovation. Although, what is innovation? How does it work, and ultimately, how does it fail?
As innovation has proved profitable for certain organisations, it has been equally unsuccessful for others. In fact, corporations such as Apple, IBM and Samsung have benefited immensely from innovating; while other enterprises like Blockbuster Video, Kodak and Toys “R” Us failed to innovate, which subsequently resulted in business decline.
It is rare that a company makes one big mistake that causes everything to fall apart. It is rather the compilation of a multitude of minor faults that sooner or later leads a business to fail. The inability to innovate is for instance an essential component in the recipe for failure. While the increasing importance of technology has driven innovation to the top of priority lists, “innovation” is ever so often reduced to a buzzword when the right environment isn’t in place.
Everything starts with corporate culture: without the right setting, it can be difficult to submit new ideas; never mind kick-starting and undertaking innovation. Moulding an innovative culture is therefore essential and requires adequate leadership that supports growth and innovation, along with employees who are willing to think outside the box.
In addition to hiring the right people, it is equally important for a company to build a reward system that can drive innovative behaviour and incentivise exploring without the fear of being penalised in the case of failure. In fact, failure should not be addressed as so, but should be considered as one out of several possible outcomes after an experiment.
Failure to implement innovation
While creating a safe space for new ideas to foster is a good way to promote innovation culture within a company, it is only the first step towards actually innovating. Figuring out what to do with good ideas once one has them presents the real difficulty.
Companies therefore often invest in labs and incubators where they can test prototypes. Whilst trying out potential projects this way makes sense for several reasons – both preventing them from disrupting business in case the ideas are, in fact, bad; it also prevents ideas that are still in their developing stage from getting lost into existing business policies and being tucked away into oblivion. The biggest risk with this procedure however is that by not experimenting directly within the mother company, the prototype might work well in theory but later on prove disappointing in practice.
Once an innovation project has been put into motion, there are many subsequent issues that might occur. This for example includes launching a product too early, not scaling in time, not allowing enough human and capital resources for marketing support, neglecting consumer needs or user experience, and so on. Thus, although opening one’s business to innovation seems easy on paper, it is a long and intricate process. If done well however, it has a high reward possibility.
In order to increase one’s chances of innovating successfully, the safest bet is to put in place a whole worked-out strategy. So whether it is through forming a dedicated innovation team, acquiring necessary funds, producing pertinent marketing, structuring conceivable business objectives and KPIs or forging a vision for the future, there is a long list of things to do; which is perplexing even for innovation-savvy businesses.
In fact, neither fostering an innovation culture nor implementing innovation is an easy task. Every company has its specialties and it so happens that some will naturally be better in one sector rather than another – and every company will not necessarily be good at innovating. This should however not mean that innovation is out of the picture.
In a world dominated by technology, innovation is essential for a company to grow, and it can be outsourced. AGILE by ZomWork for instance helps companies develop customised innovation strategies and execute them. We offer a 4-month programme during which we help organisations with everything from the discovery stage to the execution of a tailor-made innovation plan.