The Top Five Reasons Innovations Fail

Vandy Van Wagener gives us his top 5 reasons innovations fail.

Various studies peg the failure rate of innovations in the 50‐90% range. The exact number isn’t so important. The magnitude is huge in any event. Translated to out of pocket losses, opportunity losses, and morale losses, the impact is staggering. So why, with so many smart and determined people pounding away on innovations year after year, do we continue to see such an abysmal track record? As I think back over my long experience – both successful and unsuccessful – I will cite five key issues (and will likely go into some of them in more depth in later weeks).

First is lousy objective setting. An innovation can only be as fruitful as the objective is clear and stretching. Remember the saying “If you don’t know where you’re going, all roads will get your there”? It can be difficult to set clear goals, and to articulate associated constraints. That requires sharp thinking and making hard decisions. That takes time and will often be controversial. Defining objectives for truly innovative directions often won’t be found in mountains of customer research – it’s more likely to require someone with the insight and courage to “look around corners”. Unfortunately, it’s typically much easier to punt on some of the specifics and play the “I’ll know it when I see it” game. Management needs to set the standard here.

Second is setting the bar too low in terms of meaningfulness. Most companies are pretty good at working on innovations that are different. But meaningfulness is the other half of the equation. A potential innovation may be different, but would the customer really care if we pulled it off? Regardless of your actual pricing intent, would the customer pay more than they would for current offerings? That’s a high bar to scale. But it makes a huge difference in your likelihood of success in the market. Metrics such as price elasticity, likelihood of recommending to others, and intensity of preference can shed light here.

Third is poor alignment. We’ve all seen it. Too often, in fact. My good friend and colleague, Doug Hall (‐doug‐hall.html), has researched this area and concluded that there are actually three types of alignment that can go awry – strategic alignment, customer alignment, and department alignment. His current research indicates that department alignment is almost twice as likely to be the culprit as either of the other two. It requires well designed innovation organizations and processes to keep everyone working toward the same goal.

Fourth is waiting WAY too long to run the experiment with the customer. Big companies are even better than small companies at delaying this stage while they research, think, research and think. This is devastating to innovation success and productivity for a number of reasons. The key one is that until the customer has spoken, it’s only a hypothesis. And, all the time, the meter is running. Another reason is that learning almost always occurs by getting in front of the customer. An agile, iterative, systemic approach will get you farther, faster and cheaper than Study, Study, Aim, Aim, Shoot. Relatedly, that cost of delay starts to increase exponentially as the project rolls down the tracks, whereas an early whiff wastes few resources, informs the next ideas, and frees up resources to design fresh experiments. Fortunately, there are more and more ways these days to generate and test “works like” experiences with customers. Get creative! 

Finally, innovation is treated like alchemy in most organizations. It’s seen as a bit of a guru art, and is practiced without any defined system. Each innovation undertaking is pretty much of a new random exercise. In that model, how can an organization possibly reduce failure rates and consistently improve its ability to innovate? Hands down, the best systemic approach to innovation I’ve seen is the Innovation Engineering model being driven by my friend, Doug Hall. I personally spent a week going through their immersion training recently and was really impressed at how powerful it is. Check it out at or message me.

Well, that’s my top five. What are yours?

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