A couple of years ago, business correspondent Paul R. La Monica (@LaMonicaBuzz) reported, “Innovative companies are trouncing the rest of the market.”[1] He explained, “Innovative companies are supposed to be better long-term investments than firms mired in complacency and stagnation — that’s obvious. But just how much better innovative companies perform may surprise you. Companies that invest heavily in research and development made more than a 25% return over the past year [2018], nearly double that of the S&P 500, according to an index compiled by a strategist at Nomura’s Instinet subsidiary. The group of companies also beat the 19% gain for the tech-heavy Nasdaq 100 index.” Results like that are why you often hear the business mantra: Innovate or die. Without consciously trying to kill innovation efforts, many companies nevertheless adopt policies or promote cultures that do just that. Author and innovation guru Kumar Mehta (@mehtakumar) writes, “Innovation efforts at many companies suffocate as they stumble along, thinking they are on the right path but not really knowing where they are headed.”[2] Below is a list of things a few subject matters experts have identified as innovation killing activities.
Seven Surefire Ways to Kill Innovation Efforts
1. Failure to foster a culture of innovation. Mehta asserts the most important thing a company can do to be innovative is to “build an environment where innovation happens consistently.” He notes, however, “Few companies have built such an environment, what I call an innovation biome. The companies that have built this environment are the ones we admire as they are the ones that bring the most innovative offerings to the world.” Building a culture of innovation begins at the top. Enrique Ramirez (@ennomotive), a business consultant at Accenture Management Consulting, asserts, “The management of the company needs to play an active role in communication and change management. Get people excited. Show your company vision and goals. Explain how the world is changing and how technology entry barriers are getting lower. Encourage the organization to work together and build knowledge networks to scale up your innovation capabilities.”[3] Innovation author and speaker Sunnie Giles (@sunnie_giles) adds, “In the VUCA era, doing the right things (creating a culture of innovation) is more important than doing things right (improving efficiency).”[4] Although creating a culture of innovation is crucial, Scott Arpajian (@sarpajian), CEO of Softonic International, cautions that it isn’t easy. He explains, “Creating a culture of innovation is essential if you want to really change your business and maintain momentum in creative product development. And it’s not something you can do overnight.”[5]
2. Low Risk Tolerance. Giles insists, “Failure is a necessary input to radical innovation. … Instead of driving for perfection, leaders must encourage fast, safe failures, facilitate learning from those failures, and disseminate the learning quickly.” Steven L. Blue (@StevenLBlue), President and CEO of Miller Ingenuity, agrees with Giles. He writes, “Without risk, there can be no innovation. The world of innovation is murky and uncertain. You must give people your permission to fail. Otherwise, they won’t even try.”[6]
3. Innovation is not an “all hands” top priority. Blue asserts, “Many CEO’s want innovation, but only after ‘the real work’ gets done. Here is a new flash: if you want to survive, you better make innovation ‘the real work’. Make it a top priority for everyone in the company, not just the engineering department.”
4. Misaligned incentives. Arpajian insists, “As your business grows, it’s important for leaders to link career advancement to ongoing innovation activities. Create incentives that encourage employees to continue to think outside of the box instead of following the status quo.”[6] Blue suggests a few ways you can align innovation incentives: “By writing it into every job description. By rewarding and recognizing people who innovate. And yes, by asking people to leave if they don’t.”
5. You place all your bets on one type of innovation. Ramirez observes, “If you only bet on disruptive innovation, you are taking the risk of getting no results, even in the long term. If you decide to only go for incremental innovation, you can end up being the king of a big obsolete business. … A good option would be to create an innovation portfolio that aims for short and long-term goals. A balanced portfolio enables a regular delivery of business results while also betting on long-term or disruptive innovation. Regular successful milestones are also important and create trustworthiness. Therefore, do not forget about incremental innovation, which is fundamental to stay competitive and also builds adaptability.”
6. Inability to identify and solve customer challenges. One of the late Harvard Business School professor Clayton Christensen’s last books was entitled Competing Against Luck: The Story of Innovation and Customer Choice, coauthored by Karen Dillon (@KarDillon), Taddy Hall (@taddyhall), and David S. Duncan. In the book, they discuss the Theory of Jobs to Be Done. According the book’s introduction, that theory helps companies understand their “customers’ struggle for progress and then [creates] the right solution and attendant set of experiences to ensure [they] solve [their] customers’ jobs well, every time.” If you can’t do that, you can’t be innovative. Occasionally, technologies are developed that turn out to be solutions looking for a problem. Arpajian writes, “Adopting new technologies is necessary if you want to develop new innovation processes or even new kinds of products. But often, new technology is prioritized over the real goals behind using it.” He suggests asking three questions when fielding new innovative ideas: What is this innovative idea a solution for? Is this really a problem that needs solving? Is there market data that backs up the answers to the previous questions? Mehta agrees. He writes, “One way to judge the value of an idea is to demand a clear articulation of how the customer experience will change. In other words, what is the experience delta. What is the difference in a customer experience between how something is done today versus how it will be done with the proposed innovation?”
7. A reliance on serendipity. Sometimes you get lucky. William Daniel “Danny” Hillis (@dannyhillis), an American inventor, engineer, mathematician, entrepreneur, and author, once stated, “Everyone knows that innovation is risky, and it’s rare that you arrive at your expected destination. But maybe that destination isn’t so important. Maybe what you should be paying attention to are the little detours you take along the way: It’s down those back roads and byways that the real payoff usually is found. Maybe, in fact, the biggest risk in innovation lies in sticking too closely to your plans.” On the other hand, Ramirez asserts, “Business results … should be somewhat predictable and not accidental. I learned from the founder of a consulting company how some companies innovate by accident and, for it to happen again, you have to keep pushing them constantly. The reason for this situation is a poor innovation management. In order to achieve an efficient innovation, you need to actively manage it. This management is responsible for setting up a process, devote resources and monitor results. Progressive companies combine a solid innovation management, which brings recurrence, with effective execution capabilities, which bring results.”
Concluding Thoughts
Some companies seem to think that coming up with a lot of ideas, or securing a significant number of patents, is a sure sign of being innovative. To be innovative, however, no part of the innovation formula (innovation = new x valuable x realized) can be “zero”. As Ramirez notes, “Patents cannot be considered as an innovation result, at least not until they bring some income.” With so many ways to kill innovation challenging organizations at every turn, it’s not surprising that most organizations find innovation difficult. When you foster the right culture, however, many of the other challenges noted above dissipate. As Arpajian concludes, “Successful innovation isn’t a strategic business decision — it’s an ongoing state of mind that you and your teams must have if you want to build a culture of innovation and succeed.”
Footnotes
[1] Paul R. La Monica, “Innovative companies are trouncing the rest of the market,” CNN, 20 may 2019.
[2] Kumar Mehta, “The #1 Reason Innovation Efforts Fail,” Forbes, 18 February 2019.
[3] Enrique Ramirez, “5 Reasons Why Innovation Fails,” Disruptor League, 10 March 2019.
[4] Sunnie Giles, “Five Conventionally Accepted Wisdoms That Destroy Innovation,” Forbes, 26 April 2018.
[5] Scott Arpajian, “Five Reasons Why Innovation Fails,” Forbes, 4 June 2019.
[6] Steven L. Blue, “5 Surefire Ways to Kill Your Company’s Innovation,” IndustryWeek, 16 November 2018.
