The One Word Answer to Why Innovation Fails

By: Hans Balmaekers

Innovation sounds easy, but it is not. The majority of enterprises report dissatisfaction with innovation performance. Three quarters of the CEOs of multinationals view external collaborative innovation as vitally important, but only half do it, and those only rate themselves as doing it ‘moderately well’. And remember – two thirds of organizational ‘change’ efforts fail. In case you are now asking yourself, why are these odds that low – we have a straightforward answer. It’s just one word.

In a recent commencement speech, Steve Blank concluded that “interestingly, in spite of all their resources, large companies are responsible for very, very few disruptive innovations.”

How come?

Leading an existing firm to innovate like a startup seems like a ‘mission impossible’ at first

Existing companies have created metrics to control, measure and reward execution unintentionally leading a culture of fear, power and politics.

Remember those beautiful org charts? The org chart allowed companies to visually show command and control hierarchies – who’s responsible, what they are responsible for and who they manage underneath them, and report to above.

Workers weren’t supposed to think freely, come up with ideas for improvements or even dare to try something new.

In times when it seemed safe to assume that the direction of a big company could be set by a few very smart people at the top, the org chart worked. The underlying principle is that of dis-trust. Workers weren’t supposed to think freely, come up with ideas for improvements or even dare to try something new.

The world is completely different now compared to then. For most companies today, it’s either disrupt or be disrupted. 21st century corporate survival requires companies to continually create a new set of businesses.

Many companies refer to implementing programs aimed at stimulating innovation from within – intrapreneurship

David Butler is responsible for finding breakthrough innovation and building an entrepreneurial culture at Coca Cola. Recently he shared twelve main learnings, one year after starting the movement to become more intrapreneurial.

While all of his insights are useful and valid, he saves the best for last– in learning number 12, he touches upon the fundamental underlying root cause for all failure in innovation efforts:

Forming informal networks, both internally and externally, is key. It’s really important for the co-founders of the internal startups to build relationships across the company. And in the same way it’s equally important for the company to authentically connect with the startup community. Being very open and honest with what they’re trying to do is key. And we’ve found that once we built this bridge, we’ve been able to count on a lot of help from the startup community (and visa versa). And as the relationship grows, so does the trust.

The low success rate for innovation has nothing to do with how corporations or other types of organizations (governmental or social enterprises) are structured.

According to Dr. Dave Richards, the reason why most innovation efforts fail to achieve the desired return on investment, is the human condition and in particular, difficulties relating.

The one word answer to why most innovation initiatives fail is ‘relationships’

The following table summarizes key factors underlying the failure of innovation efforts. These are based on learning shared within the MIT Innovation Lab, other research and experience at the cutting, or ‘bleeding’ edge of innovation leadership:

Which of these factors do you recognize as innovation stoppers in your organization?

• Inadequate customer focus – or even innovation rejected by customers
• Employees not engaged in strategy, and organised in silos
• A disempowering culture of blame, with ineffectual communication prevalent and tolerated
• Ineffective teamwork, communication & collaboration
• Suppliers not engaged or fail to deliver on requirements

Failure to understand the customer’s needs and values, failure to communicate effectively, failures of leadership… Whatever the exact symptom is, the underlying common theme is failure to relate effectively.

Recognizing The Greatest Obstacle to Innovation

Driven to understand why the vast majority of innovation efforts fail to deliver the desired results, and particularly return on investment, Dr. Dave Richards discovered the 7 sins of innovation.

If any aspect of our psychology or organizational culture is ineffective, our ability to innovate is seriously compromised.

They are related to seven core aspects of the human psyche. If any aspect of our psychology or organizational culture is ineffective, our ability to innovate is seriously compromised.

The seven sins are pointless purpose, impaired vision, apathetic miscommunication, ambivalent disengagement, frightfully disempowered followership, painfully boring uncreativity, and last but not least, comfortable complacency.

For each sin, there is a corresponding entrepreneurial virtue that must be developed to successfully, consistently and sustainably innovate. The seven virtues are spirited purpose, insightful goals, integrous influence, collaborative partnering, responsible empowerment, creative ideation and last but not least, driven mindset.

The virtues are the same for intrapreneurs and entrepreneurs, though some of the specific challenges for achieving them are very different for people working to champion innovation within organizations.

Dr. Dave Richards’ advice to leaders attempting to foster entrepreneurial, innovative cultures is to counteract these seven sins as outlined in his upcoming book, The Seven Sins of Innovation.

By Hans Balmaekers

Photo : Group of Business People by Shutterstock.com