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Wednesday, April 14, 2010

Don't Believe the 98% Innovation Failure Rate

It Is Just A Myth. Here Are My Top Five Innovation Tips.


by Idris Mootee

Don't Believe the 98% Innovation Failure RateInnovation is hard in many ways. What is hard about innovation? Finding new ideas is not hard. Building an innovative culture is hard. Turning ideas into product/services that people love is hard. It all begins with a piece of paper and a pencil. Innovation is hard because there are so many myths about innovation and consultants are selling snake oil. Innovation is not something that is taught in MBAs and not part of any MFA curriculum.

You can look at it from a process view, a strategy view, an organizational view and a toolkit view. Everyone's journey is a little different and what works for one organization may not work for another. There is no one size fits all solution. Creating an innovation culture is easier said than done. There is no magic bullet for creating innovations, but there are many ways to develop a culture that encourages innovation. Developing an innovation culture takes a lot time and many companies have the will but not the time, you need to look for help externally. What will bring the organization together overnight to translate product and service initiatives into sustained results? The process one is a tricky one and here are some quick tips:


1. Challenging Orthodoxies And Overcoming Dogmas.

This is an important starting point and no good ideas will be seriously looked at without overcoming thee orthodoxies. There are orthodoxies in service such banking, healthcare and hospitality as much as in products such as CPGs, consumer electronics and personal care products. You can start with challenging your own orthodoxies or look at industry level dogmas. Think media, music, computing, beverages, travel etc. Forget the value chain for a second and start playing Lego. Challenge everything!


2. Participative Design and Co-Creation.

The customer is King, Queen and Jack. Any innovation efforts will fail eventually if the end user is not driven to use your new product or service. Most consumers are intelligent and can contribute so much to the process. It is true that people can not always voice their needs and desires in a way that makes sense, but our job is find creative ways to understand their attitudes, values and behaviors and figure out how to include them in your innovation process.


3. Innovation Sponsor and SWOT Team.

The majority of innovation teams start when a mandate from the CEO and followed by the appointment of an executive sponsor. Without top level support, you may never get the resources needed to get things done.

Even a CEO have challenges finding the resources to invest in innovation, if there are multiple established businesses, the P&L owners of each of those businesses are going to fight for resources. The CEO often must take dollars away from yesterday's businesses and give them to future's businesses and untested ones. That takes guts. Innovation is not for everyone. Majority of people are not ready or motivated to make innovation happen.

When putting together your innovation team, pick people from across different functions and business units, find people who have nothing to lose in their careers and willing and ready for some risks. People who have imagination and who have always been acting as the voice of the customers. Start with a small team and gradually expand to add more people. At some point, you will be ready to make this an organization-wide undertaking and ready to harness the collective creative energy of people from all parts of the organization.


4. Demonstrate Progress Often and Show Them the Prizes.

Any innovation efforts cannot be done in a black box, these activities should be tracked and measured. The quality and quantity of foresights and insights, the number of unique idea contributors, the total number of ideas generated and total number of ideas that have been prototyped, etc. And when you do get a big or small win, make sure you communicate them across the company. Innovation needs publicity.


5. Defy The 98% Failure Rate Myth.

A client of mine once told me that their success rate of innovation was 90%. I immediately felt off the chair and responded that it was probably because there weren't any real innovation at all. People in the room laughed as I explained that they were most likely talking about some incremental improvements and called them innovation. On the other side, when people say their failure rate is 98%, I would think that they're simply not doing it right and probably lack a systemic approach of scanning, visualizing, imagining and early commercialization of ideas. If you do it right, your failure should fall below 70%. Yes, failure is part of any innovation process, but improving the chances of success is also part of an innovation strategy.


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Idris MooteeIdris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

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2 Comments:

Blogger Dee Gardner - Management Heretic said...

I believe there is at least a 98% failure rate with innovation. Many times the failures are small. Look at Thomas Edison with his 10,000 things he tried before he came up with his filament for the incandescent lightbulb. People can not be afraid to fail. Failure is where learning and experience comes from. The real important issue is not how much failure, or what is the percentage is failure. The real issue I find is to get back up, dust my self off, and get ready to try again. The only real failure to worry about is not getting back, not trying again, or even worse never starting the journey because of fear.

6:19 AM  
Blogger David said...

SWOT kills the innovations with the highest payoff.

What would an innovation sponsor be good for? Christensen recommended separation. If pipelined Moore's technology adoption lifecycle as a collection of phase specific companies, you wouldn't need an innovation sponsor. An innovation sponsor would be needed if you were going for economies of scale, a sure sign of impending failure.

Skip these orthodoxies. Get a client, develop that client's product visualization.

9:47 AM  

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