The top 5 reasons for innovation failure and their countermeasures

God Translation Bureau is a translation team under 36Kr, focusing on fields such as technology, business, the workplace, and life, with an emphasis on introducing new foreign technologies, new ideas, and new trends.

Editor's note: Innovation is not accomplished in an ivory tower. From warehouse administrators to senior design engineers, every employee can contribute to new solutions as long as they believe it is valuable. This article is from a compilation, hoping to inspire you.

[Image source: imagedb.com/Adobe Stock]

Top leaders of every company are well aware that successful innovation is crucial for future development. However, few of them truly understand how to foster innovation at all levels of the organization.

Innovation is not the product of a few smart people working in isolation in an ivory tower. From warehouse administrators to senior design engineers, every employee can contribute to innovation as long as they believe in its value. Moreover, innovation doesn't have to be as disruptive as the iPhone or generative AI. Even incremental innovation can bring significant value.

Companies should not limit innovation to projects aiming for the next big breakthrough but should expand their innovation vision to a series of ideas, big and small. Here are five reasons why innovation initiatives fail and their countermeasures.

1. Lack of commitment from top leaders

Stimulating innovation requires more effort than just top leaders giving speeches to employees or emphasizing innovation in annual reports. Employees need time, resources, and support to explore ideas beyond their daily responsibilities.

During my tenure as the general manager of the communication hardware department of a technology company, I allocated 5% of the organization's total time to "blue-sky innovation," which is the stage where ideas are initially explored.

I didn't expect employees to use this time for secret activities but rather hoped that employees would reach a consensus with their managers to jointly promote a certain idea. At the same time, I was also aware that not every idea would succeed.

When an idea failed, I didn't punish the employees but regarded it as a learning experience to improve our ability to innovate in the future. I knew that if employees thought their careers would be damaged due to the failure of an innovative idea, it would quickly kill the spirit of innovation.

2. Employees don't understand your goals

Innovation thrives when employees understand the company's business, mission, priorities, and core values and believe they can make a difference. Without such a background, any useful innovative ideas put forward by employees are merely a matter of luck.

Some top leaders hesitate to share the company's vision, fearing that if employees leave and join competitors, they will share what they have learned with their new employers. But actually, you don't need to share trade secrets. You can refer to the content that might be shared in the annual reports of listed companies and share information that can help employees connect their work with a broader mission.

This is especially important for those who are not involved in strategic planning. Front-line production employees or administrative staff may have valuable innovative ideas, but they usually only share these ideas with their managers, and only if they think these ideas will be supported.

For example, an assembly line worker may have ideas on how to improve the manufacturing process, while the engineer in charge of the same production line may not have these ideas. If the manager responds with "You just need to focus on producing products, and we'll take care of innovation," then he is killing innovation, just like an executive who doesn't support innovation from the start.

3. Innovation is not incorporated into the company's plan

Although this can be a problem in any company, it is particularly common in large multinational enterprises.

Investors expect companies to achieve continuous and predictable growth and profits. However, investing in unproven ideas that take months or even years to yield results contradicts this need for predictability. Therefore, many corporate managers are reluctant to take risks, especially when the corporate culture often punishes failure severely and rewards innovation lightly.

This doesn't mean that large companies can't innovate. It just means that innovation must be incorporated into the plan. Even if specific innovation projects are not yet clear when formulating the company's annual budget, the commitment to innovation still needs to be included in the budget.

How much? It depends on the industry. For companies operating in mature mainstream markets, allocating 10% of the R & D budget to innovation projects usually won't attract too much attention from investors. In emerging or high-growth markets, investors can even accept a higher proportion.

4. Innovators don't understand the actual market demand

Some people say that innovation should be carried out in isolation, away from the influence of customers. They quote Henry Ford's famous words: "If I had asked people what they wanted, they would have said a faster horse."

But this misses the point. Innovation can only succeed if it meets real customer needs. Customers can tell you their problems, but don't expect them to tell you the solutions. "A faster horse" doesn't describe the customer's problem; it's just an idea for a solution. The job of innovators is not to simply accept suggestions but to go beyond the surface and understand the real problem.

If Ford had delved deeper, he might have heard that the speed of the horse was okay when moving, but it had to stop every few miles to rest. And the horse needed food and water every day, even if it didn't travel. With this insight, he could truly understand the real problem of the customers and thus achieve real innovation.

Ford's lack of attention to customer needs when launching the Model T wasn't a problem because there were few other options at that time. But continuing to ignore customers was the reason why Ford lost its market leadership in the 1920s, and the company never recovered.

5. Poor management of innovation projects

Innovation projects cannot be managed in the same way as revenue-generating business departments. True disruptive innovation may take months or even years to bring economic returns.

A better approach is to structure innovation projects as "internal startups," which are not measured by monthly financial results but by the indicators that the team commits to achieving within a given time frame.

In the initial stage, the focus should be on answering basic technical and market questions, so the indicators may only cover the next month or quarter. As confidence increases and the probability of success rises, the company can establish a more long-term plan.

Translator: Teresa