Why Innovation Programs Fail
We write often on this blog about the actions that lead to long-term success with your innovation program, but this time we thought we'd share some of the common reasons we've seen that can contribute to failure.
Reason 1: Missing Feedback Loop
A lack of a feedback loop from decision-makers to participants is the most common contributor to the failure of an innovation program. Ensuring a feedback loop is therefore the best action you can take to sustain the program over months and years.
There’s a universal truth about people and their workday—they are tremendously busy. We see this consistently across all of our customers and prospects. And busy people full of ideas are willing to give a new innovation program a try. But then time passes. If decisions are not being made, and participants see that nobody is listening on the other end, people can sniff this out and determine that further participation is a waste of their time.
Busy people don’t have time to speak into the void, so they don’t. And as much as momentum drives participation on launch of the program, it can drag it down when there is no feedback loop from decision-makers.
The bottom line: if you’re going through the energy to launch an innovation program, follow through on the commitment you’re creating for your team and make sure to make decisions. No feedback loop means no sustainable innovation program.
Reason 2: Incompatible Culture
More than anything else, management has to create an environment that values feedback from their employees. How many times have you been part of an employee satisfaction survey and simply had no idea whether anyone even looked at your suggestions? It’s imperative to establish a culture of openness, an environment where it’s safe to share and one where participants trust that their ideas are being honestly considered.
In How to Invigorate Innovation in a Stagnant Organization, Professor Don Mroz writes "Innovation simply cannot exist without an environment that is receptive to idea sharing, professional development, and discussion that allows idea generation to naturally take place.” He continues, “Organizations that become stagnant have most often fallen victim to a resistance to change, a siloed structure, and a lack of emphasis on continuous learning."
When speaking with potential customers, one of the first things we want to understand is how they view the contributions of their employees—what type of culture is present. Does the sponsor seeking innovation technology feel their people are a source of knowledge and ideas? Is the environment open, conversational and fluid, or will people resist sharing? Without a conducive environment, no technology solution or process change has a chance to succeed on its own.
Without an open, collaborative, and trusting culture that rewards idea sharing and discussion, the innovation program will struggle to succeed.
Reason 3: Lack of Process
We hear a lot of companies talk about how they want to be more innovative. Companies are hiring Chief Innovation Officers, building Innovation Labs and launching technology solutions to help drive these efforts. It’s one thing to say you want to be more innovative, it’s another to commit to this goal and identify and implement the necessary infrastructure in supporting this objective.
Having a defined and tested process acts as a guide for how the organization will evaluate ideas and take them towards action. The process should also take into consideration who needs to be involved in making these decisions, and who the broader group of stakeholders is. Without this roadmap, ideas are likely to stagnate, and in many cases never see the light of day (see above: Feedback Loop).
The process also needs to be one that supports your business goals and desired outcomes. We see time and time again organizations that have implemented some type of idea system or employee suggestion program, but don’t have a clearly defined view of what success looks like.
Our favorite example is of a bike company that is seeking a lighter bike frame, while maintaining the current cost to the consumer. This is a very clear desired outcome, and introduces constraints that will help in the selection of the submitted ideas. An idea emerges to move to a new type of carbon fiber, but as they advance the idea through the vetting process, researching cost in materials, manufacturing, and market analysis, they come to the conclusion that the increase in cost of materials will require they to raise their prices by 20% to maintain the same margins as they currently make. This clearly breaks the goals of the challenge, and isn't in support of the business outcome. Evaluating ideas, in this case, was made easy by the introduction of goals and constraints. Importantly, it also helped the decision-maker in articulating why the idea was ultimately rejected—it raise the price to the customer too much.
Process is not always your friend, but it will be for an innovation program running at scale.
Reason 4: Lack of Key Stakeholders
There are two key stakeholders who will keep your innovation program sustainable: executive sponsors and moderators. They will push the program forward, inspire broad participation, and overcome obstacles as they arise, and without them it’s hard to close the feedback loop or follow a defined process.
The executive sponsor provides backing from the top level, enabling initiatives to get the support (and possibly funding) they need. This person should be someone who is invested in the innovation program, motivated to keep it on track, and senior enough to get around any interference. Specifically, the executive sponsor is able to allocate the resources necessary for the innovation program - funding, time, etc. The executive sponsor may not be as involved in the day-to-day activities of the innovation program, but will help set its direction and ensure it has the resources it needs over time.
Moderators are the secret sauce of the program, as they keep ideas moving towards decisions and maintain transparency to the community. Moderators are essentially facilitators of the innovation program who provide the feedback loop (above), and without them ideas may not move forward, participation may dry up, and the community may not stay engaged.
Moderators can have several roles in an organization, and selecting the right moderators is an important step. Usually the best moderators are the ones who will benefit from the outcome of the innovation program, or are already working toward its goals. For these individuals, becoming a moderator is seen as another way to achieve their goals, not additional work.
Selecting the right stakeholders will impact every part of the innovation program, from participation to engagement, and of course by managing the feedback loop.
Reason 5: The Status Quo Wins
The primary reason most companies consider an innovation program is to drive change. Innovation, by definition, means something new. And change can be incredibly disruptive to the organization.
Most companies don’t invest time, resources, and people into an innovation program to maintain the status quo - they want to see real, measurable change. The company’s culture must support change, and key stakeholders must remain involved in implementation to keep everyone on board. In large corporations or organizations with strict hierarchical management style, transitioning from the status quo can be even more challenging.
Significant organizational change may require commitment from several departments, adequate employee education, budget from outside of the innovation program, or additional work from employees. According to PwC’s change management experts, about 75% of organizational change fails because employees are not included in the process or prepared to adopt new processes. Your innovation program is centered on engaging your employees and providing transparent feedback about their ideas. It’s critical to keep them engaged in the change process as well—it’s a key component of the success of the innovation program as a whole.
New systems, more efficient processes, and technological advancement may be confusing at the beginning. It is often easier in the short term to stay the course than to veer into a new and different way of doing things. The challenge is remembering why the innovation program was implemented in the first place, calling back to the goals (new products, new markets, etc.). The executive sponsor and moderators bear some of the responsibility for reminding the organization of these goal, progress to date, and successes along the way. But the entire organization must be on board in order to support real change and realize the benefits of the Program.
Program managers who don’t establish clear goals, identify key stakeholders, keep their employees engaged, and allow the feedback loop to deteriorate will find it very difficult to call their innovation program a long-term success.