Innovation is a risky business. There’s no guarantees whenever trying something new, particularly if you’re trying to do something that has never been done before. However, history teaches us that we must adapt or die. So don’t be a business dodo. Read our ‘5 Reasons Innovation Fails’ and sustain business success into the future.
1) Inactively pursuing innovation
Once upon a time, BlackBerry was the producer of the world’s first widely adopted smartphone brand. At its peak, BlackBerry owned over 50% of the US and 20% of the global smartphone market, selling over 50 million devices a year. One day, a new smartphone with a touchscreen, the Apple iPhone, was released.
BlackBerry’s leadership initially dismissed Apple’s touchscreen iPhone, insisting that users preferred their physical keyboard. But the iPhone sold well. Really well! BlackBerry hastily released a touchscreen device (BlackBerry Storm), which didn’t work well and was met with some unpleasant reviews. BlackBerry then attempted to reintroduced its keyboard in a combo touchscreen-keyboard setup (e.g., BlackBerry Bold), which momentarily stemmed the tide, but eventually proved misguided as the market continued moving toward larger screen real-estate.
Slow market reactions by BlackBerry and a lack of internal incentives to continually innovate ultimately led to BlackBerry’s demise and the rise of Apple. It’s a reminder that innovation doesn’t happen by accident. Those businesses that stand the test of time are constantly and actively pursuing innovation, with structure and with process.
2) The wrong leadership and company culture
Leadership and company culture go hand in hand. Successful innovation requires its leaders to create a culture of innovation in order to change the business and sustain the creative production of new products, services and process development.
Leadership and management are also needed to develop strategies which get buy-in at every level of the business. To get all your people working towards the same company vision and goals, one must clearly communicate them with your employees and empower them to be part of the change process. Change is hard and often takes more effort than to follow the status quo, as demonstrated by the Blackberry example – so it’s integral to rally the troops, get people excited and get everyone making decisions which help the company achieve well-defined visions and goals.
3) Lack of research
Our Innovation Champion (aka. Researcher) is constantly banging on about the importance of research – and she’s not wrong. Misunderstanding your market is one of the main (and worst) reasons leading to innovation failure, because it’s completely avoidable.
When fielding new ideas, you need to constantly ask:
- What problem am I solving?
- Is this really a problem that needs solving?
- Is there any market data that supports the answers to the previous questions?
- Is anyone else doing this and who are my closest competitors?
- Does the intended customer like my solution?
- Can my solution be profitable?
Even after you come up with an innovative idea which meets all the right criteria, it’s still important to keep rechecking your assumptions by testing the idea and the market, to ensure you capture and account for any changes and market shifts. This is particularly important now with innovation and change increasing in pace – what’s new now won’t necessarily be new tomorrow – keep scanning that horizon!
4) Recognising short-term and long-term innovation
Innovation takes time, people and money, therefore, not all innovative ideas can be taken forward straight away. For small-to-medium sized enterprises which don’t have the monumental budget nor the research and development capacity of Apple, innovation must be strategically prioritised and planned for.
Ideas that can be turned around pretty quickly and with little budget can be seen as ‘quick fixes’, and as long as these create value for the customer then they are great in the short-term. After all, these incremental innovations are fundamental to staying competitive and adaptable.
However, the danger of simply focusing on short-term innovation does leave businesses vulnerable in the long-term. As soon as market disruption strikes, it may be too late to adapt and the business runs the risk of becoming obsolete. The video streaming sector is a prime example of this, with the likes of Amazon, Netflix and NowTV having wiped out the once popular movie rental chain Blockbuster, and later Lovefilm.
Having a long-term innovation pipeline is key to maintaining long-term business success. It’s wise to make an innovation timeline, plan to budget for long-term innovations (which require more resources) and take advantage of new and disruptive technologies once they become affordable for your size of business.
5) Not tracking or measuring business innovation
Once you have an innovation plan, it’s easier to track and measure performance. Investing in research and development is a cost to the business, so it makes sense to ensure you are meeting the deadlines on your innovation timeline and calculating the commercial profitably of the innovation. For example:
- If you have changed a process, what are the efficiency savings for the business?
- If you have created a new product or service, what are the projected sales figures?
There may be other outputs of innovation, such as increased customer satisfaction and loyalty or improving employee retention rates, and it’s important to capture those key performance indicators. Likewise, it’s important to identify when an innovation hasn’t been successful in order to reflect and learn from that experience.
Now you know the five innovation fails to avoid – go forth into the future, adapt and innovate!