Why do innovation efforts so often fail? We might expect individual innovations to fail – innovation is risky, after all – but that does not explain why companies often pull the plug on broad campaigns to accelerate innovation, sometimes after only short periods of time. While the business press hectors firms to try to become the next Google, many companies struggle with simply getting innovation initiatives off the ground.
The folks interviewed tons of people and firms and asked them about the following:
• Revenue growth normalized by R&D spend
• Average time to market for new products/services in days
• Average time to profitability/payback for new products/services in months
• Percentage of revenue from new products and/or services launched in the past year
• Cost of goods sold as a percentage of revenue
• SG&A as a percentage of revenue
• Average days in inventory
• Percentage product and/or service sales orders delivered on time
• Fixed assets utilization rate
Business model metrics
• Number of new businesses launched in past three years
• Percentage of revenue by fulfillment channels
• Customer retention rate
• Employment of cross-functional teams
• Collaboration practices
• Mobilization capabilities (e.g., percentage of employees tasked with innovation goals)
• Innovation agenda (e.g., formal process for fostering and vetting new ideas)
• Customer satisfaction
Then they come up with 4 archetypes:
- The marketplace of ideas
- The visionary leader
- Innovation through vigour
- Innovation through collaboration
I will let you read about the archetypes in the document itself as they go more into detail into each of these archetypes, talking about the Leadership, Staff, Process and Environment.
Well, I suppose it is interesting to classify innovation processes and organisation structures. I can also see the sense in trying to do this for simple firms (single product, single country, etc.). But me sitting inside a financial institution, that too a global, multi product, matrixed managed firm, I cant see this happening at all. If I had to execute something like this into the firm, it would simply not work at all because the sheer amount of bureacracy, regulatory oversight, huge technology and operations tail, very high reputational risk, sensitivity of products, all go to make sure that innovation happens like mutation. While I do think that we are the market leaders in managing innovation with out outsourced and offshored partners, to try to build something like this into an overall firm will be a bit of a challenge.
Also, do we really need to work on innovation? Isnt it something like trying to teach entrepreneurship? you can manage the process and give tools/techniques to help manage the process, but you cant make it happen.
All this to be taken with a grain of piquant salt!!!