failure of innovations

8/9/2019 Failure of Innovations

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80% of innovations fail at the marketplace. Explain the causes for the high rate of innovation

failures. Explain how organizations can reduce the number of failures and manage their

innovation management.

Innovation is defined as process to develop truly innovative products means goingbeyond the current industry boundaries in product and package design. Inventions refer to

new concepts or products that derive from individual’s ideas or from scientific research.

Innovation, on the other hand, is the commercialization of the invention itself. Innovation has

occurred when any aspects of a product, process or service provides an improved solution

to a market’s need.

The reasons for high rate of innovation failures are as follows:

1. Organization is not conducive to innovation

We often see that innovation is a totally new idea in an organization. There are many

interdepartmental borders prevent communication of innovation ideas. Communication

breakdown when innovation ideas are not convey and communicate from top management

to the bottom. There are no proper processes clearly defined for innovation and too many

incorrect measures hinder the advance of innovative products and services. Lack of

information and knowledge on markets and technologies, not understanding the needs and

wants of consumers and inability to handle uncertainties about risks, results and timing of

innovation are some of the factors shown the organization are not well-prepared for

innovation process.

2. Environment is not conducive to innovation

Over-regulated market always prevents introduction of innovation and introduction of

new products. There is no competitive pressure and lack of competition opportunity in the

marketplace to encourage for continuous innovation. Some factors have given negative

impacts to innovation such as lack of opportunity for partnership to conduct innovation and

also no opportunity for an organization to see how similar companies and industries are

innovating. In many cases, government rules and regulations have make innovation difficult

to introduce new products and services.

3. Insufficient resources

Resources such as innovation funds, good facilities and capable people are not

available in the organization. Those factors are crucial & critical to ensure a successful

innovation.



4. Traditional management behavior

Traditional management desire to be in control prevents people being creative and

innovative. They are maintaining traditional ways of thinking that makes them feel

comfortable with existing winning formula. Excessive rules, constraints, bureaucracy and

red-tape are hindering the organization being innovative. Poor leadership in the organizationhas made wastage of resources and times thus create resistance for the organization to

change.

5. Group behavior

Poor management and communication breakdown has given a negative impression

to the employee to conduct innovation. Interdepartmental warfare with no trust and close

working relationship between departments has made innovation difficult to be implemented.

Different departments are working within their peer group which the intention is to protect

their own interest. Negative influence of peer group such as negative thinking about

innovation, fear of offending and fear of being excluded from peer group tend to reduce the

efficiency to implement innovation.

6. Individual behavior

People always feel scare to make mistakes. They worry on the failures could have

negative impacts in their career advancement in the organization. The employee tend to

avoid appearing stupid by proposing or doing something that is looks funny or not possible.

Lack of self-confidence has made them stay away from innovation. Some people are holding

to past successes and reluctant to change in order to maintain their competitive edge in the

organization.

7. Traditional accounting practices

Organizations tend to focus on short term objectives which could generate cash flow,

instead of invest money in innovation that may have to a long payback period before it is

successfully been promoted in the marketplace. Conventional accounting methods do not

value innovation and see it as a high cost activities.

From the points above, we know that innovation is not an easy task to implement and

complete. In fact, innovation is a process, not a single event, and needs to be managed and

monitored properly until it has successfully been promoted in the market place. Some factors

are essential to create a successful innovation as describe below:



1. Great idea that is marketable

Innovation usually starts with a good idea, be it a simple improvement or a great

invention. Yet, it needs more than merely a good idea for being successful innovation; the

realisation of the idea and transforming it into a commercial, practical use – that what makes

innovation a successful one.

2. Continuous encouragement and empowerment from the management

A visible and constant commitment from the management is essential to emphasis

on the importance of innovation. A clear focus, well-defined job scope and mechanism is

needed to ensure every employee contribute to the success of innovation.

3. Positive reinforcement of innovative behavior

Encouragement from the management and peer group would help to encourage the

staff to contribute in innovation. Recognition and rewards in monetary forms, Key

Performance Index (KPI), promotion and/ or special bonus are some form of incentives to

reinforce positive attitude and behavior towards innovation.

4. A culture for cooperation and networking

Mutual understanding and working relationship at interdepartmental level would help

to encourage a culture for cooperation and networking within and outside the organization. It

must combine with a sincere curiosity towards everything that is new must be found for

innovation. All parties are setting the innovation objectives as the first priority and put aside

their personal interest. They must ready to share knowledge and skills that could help to

increase efficiency.

5. Clear understanding of the business drivers and constraint

To make an innovation successful, the organization must have a clear understanding

of the business driver and constraint in the marketplace, such as target users for the product,

potential benefits for the end-users, market constraints and potential problems that might

prevent the success of innovation. A new innovative product cannot be simply launch unless

the organization has really understood extensively about the market’s business drivers and

the needs of end-users.

6. Effective Innovation Management

Effective innovation management requires the implementation of a number of

processes and the employ of a number of tools. An effective innovation management helps

to create and foster the right culture by allowing employees time to experiment and to

develop their own ideas. Meanwhile, this would provide an infrastructure to support



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failure of innovations

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