Many articles and books have been published on how to make innovation happen, how to overcome innovation barriers, and how to develop an innovation competency within an organization. One area that requires more exploration is to understand why ideas and new business concepts never make it to the market, and how the new ideas that do make it to market often fail.
One of the likely main reasons is the desire to prove the future and make sure that a return on investment is provable when launching something new. Unfortunately, mere mortals have not yet developed a way to predict the future, so we must rely on our ability to create the future.
Business people want to reduce their investment risk as much as possible, so much so that they require the success of new concepts to be proven in a spreadsheet. New ideas are vetted, messaged, pruned, winnowed, and bonsai-ed to fit investment parameters, and the result is that companies deliver boring, dull, useless new offerings to their customers. Financial people want proof of future success but don’t trust the evidence of a customer need that is the basis of an innovation success.
The result is that many people are charged with proving that a new concept is going to succeed. They execute focus groups, conjoint analysis, linear regression analysis, segmentation studies, etc. to create data that supports the hypothesis that the new creation will be a hit. It is much safer to implement incremental changes, because after all, the customer said they wanted the new feature/function/speed/feed. So customers continue to get small changes, or they receive a ho-hum new offering that doesn’t meet the main human factors of desire (social, cultural, emotional, physical or cognitive drivers). Generating an innovation (something new delivering economic value) requires creating something that does not yet exist, and relying on interactions with potential customers regarding the desirability of the new creation.
However, there are companies in the market who are hungry and willing to shake things up. Samsung is an excellent example. Their tolerance for risk and ambiguity is higher, or their understanding of the customer makes them more confident in the things they are creating. Competitors are going to come after your customers whether you like it or not. Of the original S&P 500 companies in 1957, 75% are no longer independent companies, or even in existence. Innovate or die.
To assuage the fears of spreadsheet jockeys, a new way of looking at proof or evidence is needed. The proof-machine inside an organization may be more effectively managed by using a series of different types of evidence. Perhaps smaller, less complex but more impactful product iterations should be developed in smaller pieces, and with a longer time horizon. Perhaps less money should be spent on big launch efforts and more effort focused on launching in smaller, more controlled environments. Perhaps a more streamlined approval process needs to be developed to avoid the “a camel is a horse designed by a committee” syndrome.
The thought-nugget here is to look at your current practices and see if they are really helping your company deploy compelling new platforms or customer experiences. Experiment with new ways of discovering evidence to give more inspirational new customer solutions a better chance to survive and thrive. Understand that you can only create a new future for your customers and your business, but you can’t prove it. Proof of success or failure only comes in the rear view mirror.
Roy Luebke is an innovation expert focused on discovering new, customer-driven opportunity areas to help define the future of a company. He is inspired by knowledge and learning, and applying structured tools and methods at the crossroads of strategy and innovation to achieve business growth.