The two reasons why corporate innovation fails
Corporations are constantly putting resources towards innovation management and fostering a culture of innovation. But, more often than not, these efforts fail to produce results.
Why does corporate innovation fail? Well, the answer is thanks to two reasons: culture and process.
Culture has always been an unwritten rule of business: you’re rewarded for taking risks if it produces new ideas that turn into revenue-generating products. However, this mentality encourages shortsightedness; corporations focus on quick wins that don’t equate to long-term growth or sustainability. Making money doesn’t mean that a company has innovative thinking behind its product’s development or commercialization. Innovation management can solve some issues with corporate culture but its success depends on your company’s ability to sustain and scale innovative thinking.
Some corporations have sought to tackle this issue by building long-term innovation capabilities, but they’ve struggled to implement these practices and see results. Innovation management is not difficult; it simply becomes a Herculean task to manage an ecosystem of risk-taking within a company culture that doesn’t reward failure. Even yet, a company culture (and processes) that is purposefully designed to eliminate all risk and failure in favor of predictability. Successful innovation can be attributed to one crucial factor: they’re designed to allow risk-taking in a managed environment.
What are the best ways for corporations to build innovation? First, you need people who are both creative AND effective managers, which is almost always easier said than done. Second, companies must incentivize employees — financially or otherwise — to keep them motivated while sustaining their creativity across projects while mitigating burnout. Third, organizations need effective communication channels between departments in order to share ideas. This last point is critical since innovation doesn’t happen in a vacuum. And, last but not least, a well-defined process for any individual to bring an idea from conception to full-scale production. Even it is likely that it will fail, it will give employees a sense of accomplishment along with the safeguard to take risks. And it is exactly this Modus Operandi that truly builds innovation.
Companies are working on these challenges for the long-term, which explains why there are more corporate innovation programs at this time than any other. PwC’s recent study of 1,500 CEOs revealed that the number one priority for business leaders is building an innovative culture. Are you amongst them?
Learn how to create and instill an innovation culture from the ground up, and build the necessary capabilities company-wide. With classes from the best corporate innovation leaders in the most renowned corporations in the world. Sign up now at The Corporate Innovation Academy.
