This document provides an overview of key reasons for failure to innovate within organizations. It identifies the top ten causes of failure to innovate as: confusing the role of innovation, failing to clarify innovation goals, not recognizing innovation barriers, failing to engage the entire organization, lack of recognition of the importance of communication, underestimating the need for innovation resources, having an unclear process for selecting innovation projects, failure to create an innovation culture, and treating innovation as a destination rather than a journey. The document stresses that innovation is essential for success and provides frameworks to help organizations better foster innovation.
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Top 10 causes of failure to innovate
1. Innovate to succeed Innovate to fail Introduction to Foundations of Business Innovation September 8, 2011 It’s about balancing the risk of innovating against the risk of not innovating
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3. Ten key causes of failure: Confuse the role of innovation Fail to clarify innovation goals Don’t recognize innovation barriers Fail to engage entire organization Lack of recognition of importance of communication Underestimate need for innovation resources Unclear process for selecting innovation projects Recognize the importance of change management Failure to create an innovation culture Recognize innovation is a journey not a destination
4. 1. Confuse the role of innovation Innovation is: Introduction of a new good, or a new quality of a good Introduction of a new method of production (need not need include new technologies) The opening of a new market The securing of a new source of supply The creation of a new organization Joseph Schumpeter
5. Identify Innovation Drivers Internal drivers Unexpected event Contradiction Change of work process Change in industry structure External Drivers Socio-economic changes Political changes Technology changes Drucker‘sInnovation Framework
9. Business model Innovation……….. Greatest opportunities seen in business model innovation. Can be applied to both private and public organizations If your organization doesn’t innovate, someone else will..
28. Improve shareholder/stakeholder perceived value "Would you tell me, please, which way I ought to go from here?""That depends a good deal on where you want to get to," said the Cat."I don’t much care where--" said Alice."Then it doesn’t matter which way you go," said the Cat."--so long as I get SOMEWHERE," Alice added as an explanation."Oh, you’re sure to do that," said the Cat, "if you only walk long enough." Lewis Carroll
29. Organic Renewal Acquisition Renewal Renewal Innovation Recognize different types of innovation Enhancement Innovation Experiential Innovation Marketing Innovation Line Extension Innovation Platform Innovation Product Innovation Harvest & Exit Disruptive Innovation Application Innovation Integration Innovation Process Innovation Value Migration Innovation Value Engineering Innovation Geoffrey Moore Dealing with Darwin
34. Compensation and recruitment policies“Organizations, by their very nature are designed to promote order and routine. They are inhospitable environments for innovation” Ted Levitt
63. Create a feedback loop that updates status of innovation projects and encourages accountability“The greatest barrier to communication is believing that it has occurred” Oscar Wilde
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65. Many ideas are not implemented without clarity or feedback as to why not
82. Ideation Evaluation Realization Implement process in organization’s context Innovation Outputs Resources Strategy Innovation Inputs Product Innovation Service Innovation Process Innovation Business Model Innovation Employees Suppliers & Partners Customers Competitors Processes Culture Creating the environment and processes to support innovation
83. 8. Recognize the importance of change management Change through Leadership Create a Shared Need Shape a Vision Mobilize Commitment Make Change Last Monitor Progress Change Systems and Structures Change Culture from Control to Trust Communicate Incentivize ”If you always do what you always did, you will always get what you always got” Albert Einstein
94. Common Causes of Innovation Failure Organizational Causes Process Causes Poor leadership Poor organization Poor communication Lack of empowerment of stakeholders Poor knowledge management Resource limitations Poor goal definition Poor alignments of goals and actions Poor team effort Poor monitoring of results Poor communication and access to information Inappropriate decision making
102. See You in SCS 2539 Foundations of Business Innovation Starts Monday 19th in Mississauga and Tuesday 20th in Toronto http://innovationcentre.ca/learning-centre/education-partners/ “Well, in our country," said Alice, still panting a little, "you'd generally get to somewhere else — if you run very fast for a long time, as we've been doing.” “A slow sort of country!" said the Queen. "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” Lewis Carroll
Editor's Notes
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man” George Bernard Shaw
Identification and targeting of key processes that have considerable impact on the organization’s ability to: Achieve its short, medium and long term Strategic Goals and ObjectivesIf improved, enable the organization to realize a high Return on the Investment (ROI) Identification of target processes for which complaints have been received from customers, trading partners or internal staff and which can result in productivity improvement Achieving initial success with BPM projects in one area of the organization, will create enthusiasm and buy-in from other groups.
Improving Performance: The ultimate reason for a firm to innovate is to improve its performance, for example by increasing demand or reducing costs. Market Advantage: A new product or process can be a source of market advantage for the firm. Productivity Enhancement: The firm gains a cost advantage over its competitors, allowing a higher mark-up at the prevailing market price or, depending on the elasticity of demand, the use of a combination of lower price and higher mark-up than its competitors to gain market share and increase profits. Product Innovation: the firm can gain a competitive advantage by introducing a new product, which allows it to increase demand and mark-ups.Product Differentiation: Firms can also increase demand through product differentiation, by targeting new markets and by influencing demand for existing products.Changes in Organizational Methods: Firms can improve the efficiency and quality of their operations, thereby increasing demand or reducing costs.Improving Production Processes: Innovation can also improve performance by increasing the firm’s ability to innovate. Improving the capabilities of production processes can make it possible to develop a new range of products, and new organisational practices can improve the firm’s ability to gain and create new knowledge that can be used to develop other innovations.
Recreated from Peter Skarzynski and Rowan Gibson,Building A Systemic Innovation Capability , Harvard Business Review, 2008. Fig 11.1