Innovation can be understood as the process of creating value from ideas. Creating this value involves making certain changes on products, services or processes. These changes are then formulated into valuable propositions.
Innovations, in general, are not always a guaranteed success, and in fact, they usually fail. Distinguishing failures from mistakes is crucial before continuing. Failures are natural outcome of experimentation process and should be quite useful. Mistakes are similar but too poorly designed to yield any new learning.
Contrary to popular beliefs, it is important not to fear failure, but instead, learn from it. Then, being able to make use of the experience can be highly valuable.
How do you prevent failure?
Coming up with ideas is easy, but what comes next is not. At least, if the innovation is intended to succeed, it requires a lot of effort to be able to create value for others.
A successful innovation consist of four key objectives innovators have to achieve in order for them to survive and grow. They have to be able to recognise the right opportunities and then find and secure the necessary resources for it. As well, they have to plan the venture and find ways to capture value. Finally they should be able to repeat it.
Some say, that innovators should put all their focus into the planning process in general. This is because failing to plan is seen as equivalent to planning to fail; it’s simply vital.
Innovators can then increase the odds of being successful in their work by better understanding the manner of consumer behaviour, that the innovation requires. For instance, they can minimise the behaviour change consumers make when switching to a new product or service. In other words, consumers should not have to change much to make the new product or service useful to them.
Why do innovations fail?
Highly innovative products or services have the potential of becoming viral, and even lead to a breakthrough. However, highly innovative products or services also fail at a much greater rate than less innovative products/services. Thus, the more innovative the product/service is, the higher the risk of failure is.
Here are a few main reasons why innovations end up as failure:
Either the market greatly undervalue the innovation proposition, or innovators greatly overvalue it. In other words, those who innovate fail to either deliver or capture value from their innovations. As well, the innovation itself is likely to lead to failure.
Market-based cause of failure
The innovation diffusion tells us how far on the market the innovation reaches and is, more or less, what makes or breaks the innovation’s potential for success. First, the innovation is explored by early adopters, but often it fails to reach the majority, and instead, falls into the gap in between. Timing is also important, for instance, when it comes to completely new technology. Even though it’s great and has all the potentials to go viral, the majority of the market might simply not be ready for it.
Innovator-based cause of failure
Innovators tend to become too committed to their ideas, too caught up falling in love with their novelties and ignore the needs of the market. They tend to forget to ask themselves all the important questions such as; how does the innovation help consumers, how much do they care, and how much are they willing to pay?
Innovation-based cause of failure
The innovation itself can easily cause problems if it’s not thought through. The innovation has to be better than what’s already out there. It should be compatible with existing values, experience and needs. It should not be too complex for consumers to use and understand. It should instantly be visible for potential users to see the benefits of using it. Finally, it should be triable before consumers commit to it, particularly if the commitment price is high.
Kristófer Páll Lentz is a business marketing enthusiast, currently working for Market-Inspector.co.uk, a B2B marketplace for businesses and institutions in Europe. He is currently a post-graduate candidate at Copenhagen Business School.