Here’s why corporate innovation fails and what that may lead to. And oh yeah, what to do about it.

Why does corporate innovation fail?

In our previous blog, we touched upon five key reasons of failing innovation. As in that blog we did not further elaborate on those reasons, we felt we still needed to.

1. Innovation theatre

Many organizations play ‘innovation theater’: they don’t walk the talk on true innovation practices. They perform innovation activities but don’t make them part of their core process of continuous innovation.

2. Strategy dis-connect

Innovation programs should be part of the organizational strategy. They should be tied into all strategy horizons: short, medium and long term. Disconnected innovation will not deliver long term value.

3. Not invented here syndrome

Siloed organizations suffer from the ‘not invented here’ syndrome. Successful innovation is based on cross-functional collaboration. This requires an open attitudes towards other business units.

4. Low risk appetite and failure acceptance

Innovation is often seen as synonymous with high risk. Industries will low risk appetite and failure acceptance miss out on the opportunity. Innovation done right de-risks the process and learns from failure.

5. Lack of data culture

Smart decision making is a key aspect of successful innovation. Too often decision making is based on gut feel or opinions. Smart decision making is based on data and insights. A data culture is a prerequisite for value.

data analysis

What may be the ultimate results of failing innovation?

Many executives feel that innovation is a nice to have for the future, and because of the difficulty to forecast future results of innovation have great difficulties in sufficiently investing in it. However, innovation is not just a nice to have for the future, it is nothing less than a must have for today. There are three key reasons for this:

1. Customer needs are changing, and have probably already changed without you knowing

Customer needs are changing all the time. This holds true in a consumer context as well as in a business-to-business context. Our job is stay relevant for our customers. This requires a process of constant adaptation. Continuous innovation is key in that.

2. Being innovative builds resilience, resilience is needed NOW!

We are living in challenging times. Crises are following each other in rapid succession. COVID-19 is proving to be the greatest disruptor of our time. We must build resilient business models to keep our businesses afloat amid this turmoil. Business model innovation is a key competence.

3. Disruption is always closer than you think, someone may already be disrupting you

Disruptors are around the corner. You might not be aware of them yet. As businesses mature and markets develop, incumbent organizations tend to be focused on extending current offerings for current customers. Make it a habit of building your own disruptor frequently to prevent getting caught by an external one.

So, what can we do to make innovation work?

Making innovation work is not easy. The whole problem can definitely not be solved in a blogpost. However, we can give you most essential lesson there is to give when it comes to becoming a successful corporate innovator, and that is to structure the process. Structure the process into three main challenges that we find intertwined (but should not be) in too many cases. Leading to innovation failure after failure.

1. The ideation challenge

Spotting and creating innovation opportunities

Balancing the long- and short-term perspective

Selecting the most promising innovations

At VanderLande the ideation challenge led to a whole new breakthrough product (called Fleet), a conveyor system without conveyers (watch the vide here). The idea of Fleet was conceived in one of our DisruptR.

2. The validation challenge

Assessing the true potential of new ideas

Avoiding unjustified investments in bad ideas or hobby horses

Beating the competition on time-to-market

In the ASML LightHouse project (later migrated to the Belgian IRE Smart project) we helped validating the idea by numerous in depth client interviews that confirmed they would be interested in using a new production method for radio-isotopes.

3. The scale-up challenge

Turning on the right growth engines

Creating the right conditions for growth

Balancing management of core business and innovations

At Technical Trading company Imbema we helped scaling up a validated innovation by actually working with launching customers to roll out a new service from a pilot plant to international scale. Imbema staff was trained in selling the new service, organization structure and processes were scaled up and the new technology was ‘given’ its own BU, with equal status and importance as the BU that were in the company.

Now what?

Should you want to read more on this topic, or start improving your innovation performance, we recommend the following:

Of course, you can always give us a call to discuss any innovation challenges you may have.

Our colleague Eric de Groot will be more than happy to share insights and experience. or +31655196508