Why Innovation Fails
It is not only about the product but also about the people in the new story
by Victor Gorbina
Do you remember your first digital camera? Probably it was not a Kodak, even though they were one of the founders of digital camera technology back in the 70’s. Being the first, does not guarantee success.
Innovation is a key process in any company, but failure is a real and inevitable part of this process. In reality most products, projects and startup ventures fail. The reason for this is that innovation is not isolated. Being innovative in what a company can offer to its customer is not the only thing that a company needs in order to keep afloat.
During innovation, companies will have to deal with working in two modes that often are viewed as incompatible. While one mode focuses on the past, the other focuses on the future. Trying to integrate these two competing ways of thinking mostly leads to failure. This inability to integrate these two ways of thinking is caused mainly by the personnel’s resistance to change. When a process of innovation is underway, normal routines in the organization need to innovate as well. This means that managers and employees will have to change their way of working; however, this may not always be straightforward and could raise some serious resistance.
Established businesses are great at maintaining value through greater efficiency and effectiveness, but over time these businesses need a new injection of innovation. Start-ups are full of innovation and they only need to find that they have a sustainable business model. But at some point in the future both type of business will be looking to innovate. In order to have an effective adaptation, innovation should be tattooed in the organizational culture.
Innovation is not only about the future; it involves integrating the past and future. When a company can integrate these two modes, and not rely too heavily on either of them, innovation succeeds. Intrapreneurs and entrepreneurs as leaders have to put the time and effort in to provide a level of certainty about future events that can balance the natural focus on the reliable past. When focusing on the product or service the Innovator’s Dilemma absolutely describes the circumstances or context in which these two modes create market adversaries.
Let us go back to the example I mentioned in the beginning of this article. Kodak was one of the founders of digital camera technology back in the early 1970s. This would lead us to think that Kodak is still a key player in the digital camera market. However, as most of you may know this is not the case anymore. How did this iconic brand almost vanish? How does a company that develops a new technology fail to remain a key player and end into bankruptcy?
It is easy to question the leadership of an organization that fails to seize an opportunity, but failing also comes when a company is unable to adapt to the change that a new product development brings with it. In Kodak’s case they did try to focus on the correct market, nevertheless, because they focused too much on the product and, hence, they did not pay attention to what was happening within the organization. Workers at Kodak were not prepared for launching a new product due to the fact that it was not clear what impact this could bring to the sales of other products and the way they were doing business. What is clear, however, is that a culture of innovation in Kodak was virtually non-existent.
Kodak spent millions on R&D trying to reinvent their business, but they forgot to work in the change that a new technology could bring within the organization. Innovation is not only about selling but also about all the people that are behind this process. A firm with a genuine culture of innovation goes far beyond that – they look at the horizon for opportunities and threats. They reward creativity and embrace challenges. They do not consider change as a threat to their business, but instead they see it as an opportunity to become more competitive.
This article made an attempt to demonstrate that innovation also includes the implementation of measures to mitigate the change that new products bring. In order to have an effective innovation process, intrapreneurs and entrepreneurs need to help in the process of taking away the fear of change. Once the fear is taken away, change can inspire and help to drive the culture of the company towards innovation.