Why Innovation Fails!

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Unfortunately, it is the stark reality. Most company’s attempts at Innovation not only fail, they fail miserably! As a result, many CEO’s have given up on innovation as the primary means by which they seek to ensure ‘Achieving Sustainable Growth & Profitability’ into the future, which is the title of my latest book, released this summer (2016).

But why? Why does innovation fail in far more companies than it succeeds? The answer is both simple and yet also more involved than it first appears.


Innovation is, first and foremost, viral. It spreads from one employee to the next as the excitement which innovation creates permeates the organization. As such, it is dependent upon the organization’s culture for success. Innovation, by its very nature, involves risk. Risk, bespeaks the possibility of failure. Such failure could negatively impact the organization, its employees, its investors, its customers and its management. Risk is naturally a part of any business, however, businesses go to great lengths to minimize risk.

What employee in their right mind would take risks unless the culture of the organization strongly supports such risk-taking as part of the company’s commitment to achieving breakthrough innovation? Organizations in which reasonable and prudent risk-taking is not supported will quickly develop a culture wherein no one will take risks and therefore, no real innovation will occur. This is precisely why innovation fails in most organizations.

However, organizations that understand the truly exponential opportunities for growth and profitability which innovation presents, also understand the need for reasonable risk-taking and the reward of employees who do so. Such organizations grasp that failure is part of the innovation process. I tell my clients that fully 80% of their innovation efforts should fail! Otherwise they are not stretching far enough and will never see the types of true leap-ahead, breakthrough results which are within their grasp.

That specter of risk frightens some CEO’s, but it shouldn’t. Why not? Because I’m speaking of taking ‘prudent’ and ‘reasonable’ risks, not betting the farm on each new innovation initiative. By starting small, failing quickly, investing incrementally,…and learning from failures, risk Is effectively mitigated. The flip side, however, is that those breakthrough innovations that do succeed result in returns which not only make up for the failures, but far exceeds them many times over and in some instances, truly exponentially.

Every organization’s culture is determined by its leadership. And leadership is top-down. Those at the top of the organization determine its culture, either positively or negatively, whether they intend to do so or not. Leaders who ignore their organization’s culture establish that culture just as surely as those who seek to do so overtly and with clear intent.

Each time I visit a new company, I find it to be a fascinating experience, especially in those cases where the organization proudly displays a plaque on the reception area wall that states “Our Employees are Our Greatest Asset.” When I see this, I become keenly interested in learning whether or not it is actually true. It usually takes me just a few minutes of walking through the facility and observing to know the answer.
Happy employees, people engaged in active collaboration, smiling and frequently laughing are a good indicator of the culture. If your employees are having fun, then they must be your greatest asset, as happy people are by far the most productive and highly productive people should be highly valued by you.

People who are enjoying what they do want to do it better. They want to make a real difference and they move the company forward to realize breakthroughs that will benefit the organization as a whole. Happy employees care, in fact they more than care, they REALLY CARE! And because they care so much they are willing to take reasonable risks to push the envelope, to challenge the existing and accepted paradigms. They focus on creating the best ways to pursue new opportunities for the organization.

People pursue innovation when they feel appreciated, secure and valued for who they are and not merely for what they can produce. If you want innovation to succeed and open the doors of opportunity for your company, then you as a C-Level leader must set the example. You must establish a culture of trust wherein each person feels free to contribute in every way they can.

Doing so will create an atmosphere and culture where people are eager to come to work each morning, are highly motivated to do their best and are fully committed to contributing to making innovation the driving force of your company. When this occurs, innovation simply cannot fail!

by John Di Frances

Strategic Innovation Consultant StrategicInnovation.Consulting

Strategy & Open Innovation Keynote Speaker www.difrances.com


Office: 262.278.6250 / Mobile: 262.844.0605



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