In today’s fast market, it’s those companies that can innovate, that are going to be the most successful, that will be able to adapt rapidly to new opportunities and gain market share.
Having worked in senior IT leadership position in large multinational companies for the last 25 years I have often been involved in either supporting business innovation, or delivering IT innovation to benefit the business.
Innovation is not easy, but many of the failures that I witnessed or was involved in, were often self inflicted. Here are the top five mistakes companies make that prevented innovation from being a success.
Lack of clear focus
Too many companies look to become more innovative but lack understanding as to what that means, how it will happen, or in which areas they are looking to innovate. You need to have clarity on which areas you are going to focus, and what problems you are going to address. At one company where I worked, we were told that this year was going to be the year of innovation for our company and that we all needed to be more innovative.
That’s a great idea, but it’s never going to work.
After a year of struggling the plan changed, partly due to the financial crisis, and the company targeted cash flow and debt as the key area where they wanted people to become creative and innovative.
They established a specific program called Cash is King, which looked at every aspect of financial management: assets; vendor payment terms; loans; leases, etc., to find opportunities for improving the cash position.
Over the next two years, the company reduced net debt by over 1bilion euros.
Involve too many people too soon.
At one client they looked to get as many people involved as innovation as possible, and they set up a program where everyone was invited to send in their innovate ideas.
The response was outstanding, and in just over six months they received 90,000 ideas.
The problem was if just they were to spend just 15 minutes reviewing and assessing each proposal it would have taken around ten man-years to review them all. And let’s be honest 15 minutes is never going to be enough to assess an idea properly.
The company became swamped in admin and bureaucracy, which led to much being wasted time and frustration in those who had submitted ideas.
It’s much better to start out with a small team, achieve some early successes, celebrate and use that momentum to involve more people. You also need to ensure that you have the right processes in place to be able to handle the administration.
See Innovation as an add-on rather embedded into an organization
Too often I see innovation set up as a separate department, something that is done to an organization, rather than by an organization. Just appointing a Head of Innovation isn’t necessarily going to give you the results you are looking for. Innovation needs to be incorporated into the culture, that way it can become part of everyone’s job.
Aim too high, too quickly
The majority of change initiatives fail, and the larger and more complex the initiative, the higher the chance of failure. The same is true of innovation, especially when people target large disruptive changes.
Yes, these can be massively beneficial, but that shouldn’t necessarily be the start point. Start with some small changes, develop an understanding of how innovation happens, and build from there.
Intolerant of mistakes
For innovations to really become part of a companies culture, there needs to be an understanding that failure is part of the journey. Thomas Eddison failed thousands of times when inventing the light bulb, James Dyson had over 5000 attempts at creating the cyclone vacuum cleaner. Most companies are risk averse and failure intolerant, which is counter to a culture of innovation. Organizations need to promote smart risk taking and become tolerant of smart failures. That’s not to say that organizations need to be happy to accept any and all mistakes and failures. But they do need to create an environment where people feel comfortable pushing the envelope, and have a clear understanding of what smart risks and failures are acceptable.
When undertaking an innovation initiative you need to make sure that you can avoid all of these traps, which can be so easy to fall into.
To create a culture of innovation, you need to have clear focus where people know what success looks like, you need to start small and build momentum, and be comfortable with a defined level of risk and failure.