How do you go from $11 billion in revenue and 76,000+ patents to filing for Chapter 11? Sadly, this was the case of The Eastman Kodak Company. As painful as it is to watch a much-loved brand vanish, this example is a testament to the fact that there is no safe play when it comes to business.
What would cause such a colossal failure and make an industry giant disappear off the radar? It is definitely not a failure of a single product, acquisition, or bad campaign. Kodak had almost 10 years to respond to the trend of cameras becoming digital and eventually merging with phones. In fact, there are companies that came later and captured a much bigger market share. It is the failure to innovate that led to its ‘demise’.
In other words, it is because sometimes innovation strategies fail to produce products/ services that the customers want. And as the saying goes, ‘disrupt or get disrupted’, which brings us to the question – ‘Why do innovation programs fail?’ Below are six reasons why innovation programs can fail:
Waiting for Anomalies: Leaving innovation to chance is more often a gamble, where odds are not always in your favor. Studies show firms that treat innovation as a science and manage and measure it like any other business function are more successful. Choose an innovation process and continuously measure and manage it. Similarly, you will need a robust process to collect and evaluate ideas in the ideation phase. And a systematic process for creating proof of concepts and take the product to market.
At each stage, there are metrics that need to be tracked. A few such metrics are number of ideas generated, number of ideas shortlisted, number of proofs of concepts or prototypes built, number of ideas funded, number of products launched, and ROI. By creating a strong framework, you create an environment that will enable innovation.
Banking on a Single Program: Banking on just your innovation center or R&D is like having one customer who contributes 100% of your revenue. It is way too risky (unlikely as well) and when it fails, the magnitude of the loss is big.
There are at least 10 different types of corporate innovation programs that can be leveraged. Open innovation, internal and external accelerators etc. are a few examples. There are various ways in which one can structure multiple innovation programs:
● While one program focuses on short-term results, another program might focus on a long-term strategy.
● One can focus on tapping innovation internally, another can capitalize on external innovation through accelerators, incubators, acquisitions, etc.
● Or one can focus on incremental innovation, another program strives for breakthrough and radical innovations.
The key is that you can’t afford to keep all your eggs in the same basket.
Absence of an Exclusive Team
Being wholly dependent on your product managers and vertical heads to come up with up innovative products is not a good approach. Although innovation should not be confined to one section of the company, a