Even after 20 years as an Innovation Management Consultant, I continue to be amazed at the failure rate of innovation. In fact, some studies suggest that as much as 80 percent of new product introductions fail.
Maybe even more shocking is the fact that less than two percent of the 3,000 patents that are issued each week will ever reach market success. What’s interesting about all this is that most of the mistakes that cause these failures come from five basic screw-ups. The result is wasted time, wasted money, and, in some cases, wasted brand equity.
So, what are these five mistakes?
1. The Bright Shiny Object Syndrome
Many organizations are technocentric. This internalized focus is wholly on the functionality and/or the technology of a given product or service. And this is the genesis of most innovation failure. Why? Great innovators know that technologies and innovations are nothing more than a means to deliver meaningful and layered customer value. So take your focus off the product and place it squarely on understanding the needs, problems and opportunities of your valued customers.
2. Risky Business
The overwhelming majority of organizations create cultures that punish the internal entrepreneur while rewarding the do-nothing sycophant. I’ve got some bad news: Creating insanely cool customer value is extremely risky … so lean into it. Remember, organizational culture is nothing more than the collective focus of the people who come into your building every day. Encourage them to take intelligent risks, driven by an insane level of customer connectivity, and, trust me, you will rule your market.
3. ‘Big Hat, No Cattle’
Most organizations attempt to drive innovation through what we in the innovation space call incremental innovation. In other words, they “paint it blue and call it new.” In a digitally connected world, customers are constantly talking — and more importantly, they’re talking about you. Tiny improvements in your products and service won’t fly. Your customers are demanding significant, meaningful value, and this requires breakthrough innovations that are truly worth talking about.
4. The Black Hole
In researching my last book, The Digital Innovation Playbook, I found that one of the biggest characteristics of “innovation superstars” is speed. Many organizations have become so bureaucratic and so risk adverse that by the time they’ve launched their product it’s irrelevant. Market success in a digitally connected world requires real-time connectivity to customers in order to identify value propositions. And those value propositions need to quickly convert to deliverable innovations. In the current market, being first out is the ultimate competitive advantage.
5. The Digital Disconnect
Unfortunately, many organizations have assumed that the Internet is only useful as a way of propagating sales and promotional information. These digitally disconnected companies have failed to recognize the true significance of the World Wide Web. Take, for example, companies like Kodak, which have recently begun to hire Chief Listening Officers (CLO). Sound crazy? Turns out that the best innovators on the planet have recognized that digital innovation that incorporates the powerful listening functions of Netnography and Gamification are creating the best products on the planet. Eliminate your digital disconnect to drive world-class innovation.
So there you have it: Focus on the customer, not the product. Stop managing risk and start managing customer value. Develop breakthrough innovations, not incremental improvements. Use fast-track methods to drive speed to market, and lastly drive customer connectivity through digital innovation. Manage your ability to handle these important factors and your chances of success when launching a new product or service will increase dramatically.
Nicholas J. Webb is a Partner at Lassen Innovation, an innovation and business growth-consulting firm. He is also the author of The Innovation Playbook and The Digital Innovation Playbook. Visit his website at www.nickwebb.com.