• Why The Pursuit Of Innovation Usually Fails

    • few businesses are any good at innovation. For all their brainstorming exercises and “open innovation” programs, they mostly just come up with reformulations of existing products, new pricing plans and basic updates–the same old things just a little cheaper, faster or better.

    • When companies launch innovation programs, management invariably wants to make sure they are carried out “effectively” and “efficiently.”

    • The core business isn’t usually doing so well, but it gets first call on resources because management feels it needs to defend what already exists. In tough times that leaves little if any investment money for innovation. Any money that can be spared must get a return within a year or two. No manager wants to put his bonus at risk by investing in something that could hurt profit performance.

    • Most managers don’t feel effective unless they obey the old 80-20 rule, which states that in almost any activity 80% of the results come from 20% of the causes. That is, they feel compelled to kill four out of five ideas. Do that through three layers of evaluation and you’ve eliminated 99 out of 100 ideas. Now, that is efficient. Of course, it also means the survivor is highly unlikely to offer much of anything in the way of real innovation.

    • Even the famous Jim Collins, author of Good to Great, wants to rein in innovation. He says the most important thing for management to do is make sure innovation management is efficient. Be sure only the right things get funded, and there’s a robust system for killing funding quickly when projects don’t achieve immediate results.

    • Many failed companies have constantly sought excellence. Their managers weren’t incompetent or lazy, yet their approach failed them. More of the same couldn’t help.

    • Defending and extending your past can’t be good enough when market shifts mean you have to do new and different things.

    • We all know we need to innovate. But we just can’t help ourselves. Everything we’ve been trained to do as business leaders is about staying on course–even when headed straight for disaster. Rather than do something different, we batten down the hatches and sail into calamity like Captain Ahab.

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