Everyone knows that constant innovation is a necessity to keep up with ever-changing consumer demand, yet most innovation initiatives deliver lackluster results or fail outright. How can it be that the need for innovation is widely recognized and sought-after, yet so poorly done? In all my experience investigating, implementing, and reviewing the remains of former corporate innovation programs, the same things tend to pop up time and time again. I’ve collected a list of these factors, and below I’ll share the 5 most common causes for new initiatives to fizzle out before they can produce any outsized results. Without further ado:
The Top 5 Killers of Corporate Innovation
- Incorrect Management – This is by far the top and most obvious reason for a failure to innovate. Basically, mistaken management is responsible for all the following reasons and more. Bad management can be blamed for anything ailing an organization, but that’s not what I’m talking about here. Incorrect management is the behavior of well-meaning leaders who either have no experience leading innovative products and/or have misguided ideas about how these projects should be led. The only strategy for combating an ineffective but good-hearted manager is education and patience.
- Misaligned Incentives – There is a common misconception that intrapreneurs will demand 50+% of the upside of any idea they bring to the company. This is rarely true. A human being that is most concerned with being the next Elon will not give their employer any ideas, while an employee that comes to you with a new concept has shown that they are deeply invested in furthering their career and staying with your firm. Study after study have shown that monetary compensation is not enough to keep employees happy; they need growth and recognition. Career outlook is key here. By aligning your incentives with intrapreneur desires, by having personal and professional growth opportunities, you ensure that all good ideas are bubbling up through the organization, not just the billion dollar ones.
- Unsupportive Culture – Toxic environments for innovation generally fall into two extremes – those that wish to destroy new ideas and those that want to pile everyone on. It is the so called sniping or team creep problem. Either your colleagues are convinced you are going to fail, or they are convinced your idea can be their next win too. A healthy corporate culture roots for you without attempting to jump on your train. These toxic environments are difficult to navigate for even the most astute corporate politician. Many firms create Labs or Accelerators just to ensconce new projects in a safe environment.
- Fear of Failure – If your organization is built around the conceit that it is unacceptable to be wrong, then it is no wonder that no new ideas are emerging. New concepts are risky, change is unpredictable by definition, and failure is an integral part of the learning process. Often when people fixate on the negatives of failure, they are concentrating on the “wasted” resources. This isn’t about money, because properly funded idea should be inexpensive and lightweight. The trick to avoid this is to keep your resource spend light and as-needed as the project progresses. If time and resources are spent wisely and judiciously, and institutional learning is achieved, then it is difficult to make the case for a failed new project as an absolute negative.
- Inadequate Incubation Process – Often times, once a new project gains even a little bit of traction there is pressure to scale and aggressively monetize immediately. New ideas need time and room to grow naturally. Mistakes will still happen and glitches will pop up. Better to have these natural pieces of growth come out when a project isn’t so large that an error will crush it. Resist the urge to spin up 100MM users immediately just because you’ve “finished” building the project. Grow steadily but surely. Work out the kinks while you’re small enough to get a pass, then leverage your parent organizations might to shoot for the stars.
While this list certainly is not the end-all-be-all, these are the most common factors for a failure to innovate. If it was easy, everyone would be doing it. That said, it doesn’t have to be hard. Manage smartly, make sure incentives are in order, get buy-in from your culture, embrace failures, and grow slowly but steadily. Do these things and you might just have a innovation on your hands.
Photo Source: Rachel Yurkovich
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