By: Anthony Ferrier
There are plenty of examples of innovation program failure at large organizations. In this article, I examine the key markers that I have observed, that indicate a program may be in trouble and at risk of failure.
After working with a wide variety of companies I have (unfortunately) seen plenty of examples of failed innovation programs. Over time I have begun to recognize some consistencies of when the tide is turning south. So I prepared a list, that will hopefully help you avoid some of the traps that I have seen in the past.
This list is not exhaustive, and I would love you to provide your own thoughts and opinions as you see fit.
1) Focus is on activity, rather than results
I place this as numero uno, as it drives me crazy! Too often I hear both innovation program leads and, quite frankly vendors in the marketplace, talk up the success they are generating, based on the number of activities developed. Examples might include the number of employees who participate in a challenge, people in an incubator, size of innovation communities, etc. While these stats are good starting points (generally for the first couple of years), more concrete, business oriented metrics need to be quickly generated. Examples may include the number of ideas in production, number of ideas launched, net present value of ideas, revenue impact, etc. The fact is, if you focus on activity as a metric for success for too long, the value of your program will be questioned by leadership.
The fact is, if you focus on activity as a metric for success for too long, the value of your program will be questioned by leadership.
2) Executive sponsorship is wavering
The goal of any innovation program should be to secure sponsorship from at least one senior executive. I say at least one, as there is so much movement these days amongst senior leaders, co-sponsorship makes sense from a continuity perspective. Sponsorship lends credibility to your efforts, and if positioned correctly, helps divert more resources towards your efforts. It is fine if a program doesn’t get executive sponsorship right from the start, as you may have to prove your worth before this is secured. What is important is that it is secured relatively quickly, generally within 12 months from launch. If you can’t secure this within the first 12 months, or your existing sponsor is not actively supporting your efforts, it is a sure sign that your program is not being taken seriously.
3) Efforts are not owned by Business Units
I often see innovation programs that are operated, owned and positioned as a corporate function. Big mistake. In most organizations the power resides within the Business Units that drive value. For any innovation program it is essential that they secure ownership and support from Business Units, in order for them to be taken seriously and be in a position to drive and align with business value over time. Without this, your program will struggle to create any business impact and your efforts will eventually wither away.
4) Not introducing new activities
I often see innovation programs that are operated, owned and positioned as a corporate function. Big mistake.
While it is all well and good to repeat innovative activities with a focus on improved efficiency, coming up with new activities creates a perception of growth and further success. Too often I see programs repeating the same innovation activities, with an expectation that leadership is impressed with continued improvements and efficiencies. In my experience this just isn’t the case. By adding in new activities, often with limited resources, your program will be seen to be driving new ways to add value. Using approaches that are largely outsourced can be a way to get around the headcount issues that every program faces.
5) Funding /resources are being squeezed
Every innovation leader that I talk with faces resource constraints. What is important is that your overall levels of resources are not diminished, especially in proportion to other similar initiatives. It is important to note that I am talking here about total resource allocation, which can come from a variety of sources. While resourcing from specific sources may ebb and flow over time, total program allocations need to continue to grow, or at the very least remain stable. If you feel that sources are drying up, especially in comparison to other initiatives from across the organization, it may be seen as a sign that you are in trouble.
6) Idea’s aren’t being built
In line with the first point, a mistake that I often see is for innovation programs to focus too tightly on the front-end of innovation (ideation) rather than the actual execution of ideas. Anyone can generate lots of ideas. Honestly, that isn’t hard. It is a hell of a lot tougher to get ideas built and driving value to the organization. Leadership will be looking at the ideas that you are developing, so be sure to keep the flow moving and leadership aware of the successes you are generating.
Anyone can generate lots of ideas. It is a hell of a lot tougher to get ideas built and driving value to the organization.
7) Unbalanced Innovation Pipeline
I have written in the past about how Innovation Program leaders and managers are often optimists, and I think that this sometimes pushes them to build innovation pipelines that are unbalanced, often with too much of a focus on delivering large impact ideas. I have run a program in the past, so understand this desire, especially when resources are limited and the expectation from leadership is that big is what counts. Putting your eggs in a big impact basket increases your risk profile and often leads to failure. Also, those big bets push out your delivery timelines, further exposing you to risk, especially when a program is relatively new. When I see these unbalanced portfolios of ideas, my instant reaction is to check in with leadership on their perceptions of the program, which is often best described as “frustrated”. Leadership generally want a balance of instant gratification and a promise of larger successes over time.
I have previously written about recommendations that focus on actions that Chief Innovation Officers (CInO’s) should take to ensure their success. That article has some parallels with the above listed thoughts and may also be of interest to readers.
As mentioned, this is not designed as an exhaustive list, and I welcome your own thoughts on the signs that programs are in trouble. So have a think about it, and let me know your thoughts?
About the Author
Anthony Ferrier is a well-regarded executive, entrepreneur, advisor and thought leader on corporate innovation. He has worked with organisations in the US, Europe, Asia and Australia to develop effective innovation strategies that guide organizational change and build cultures that encourage the development of new products and solutions. Anthony has worked with organizations such as Transport for NSW (Australia), Department of Defence (Australia), Bristol-Myers Squibb (US), Fidelity Investments (US), Pfizer (US), Volkswagen (Sweden), Ergo Insurance (Germany), etc.. He currently leads innovation and commercialisation efforts at Swinburne University, and previously led The BNY Mellon global innovation program, as well as co-founding two successful tech-driven consultancies. He has a Master of Commerce (University of Sydney) and Bachelor of Economics (University of Newcastle).
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