When a business is impatient for profit, managers are forced to validate their assumptions and demonstrate that customers are fundamentally willing to pay an acceptable price for the company’s offering. 

Clayton Christensen

90+% of innovations fail. That is reasonably well known.

But why do they fail? There are many scholarly views (also about how they can succeed). But if these were anything to go by, this failure rate should have gone down by now. ‘Innovation,’ after all, has been around in the business lexicon long enough!

There are three broad areas that cut across:

They do not answer user needs; or/ and

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Here’s a shorter answer. More often than not, innovations fail because we do not give enough importance to those who would pay for it.

While business cases can well be built around these (and MBA’s are usually good at this!), they do not offer new benefits for users.

Incidentally, all successful innovations do not necessarily create greater societal or environmental value either (oft times the opposite!).

I was once conducting an innovation journey with Unilever in India. And Unilever is as consumer-centric as they come! We went out on the rural consumer immersion. On the way back, the Marketing Manager said to me, “Why am I wasting time on this. This is not my job. We should leave it to the experts.”

Here are my questions: (1) Who’s job is it then? (2) What is your job exactly? (3) Who are the ‘experts?’ (4) If you are unwilling or unable to connect with consumers 1-to-1, how do you expect to connect with them 1-to-million, which is what you seek to achieve through the innovations and communications you create?

Is it any wonder then that 90% of innovations fail?

I was once conducting an innovation journey with Unilever in India. And Unilever is as consumer-centric as they come! We went out on the rural consumer immersion. On the way back, the Marketing Manager said to me, “Why am I wasting time on this. This is not my job. We should leave it to the experts.”

Here are my questions: (1) Who’s job is it then? (2) What is your job exactly? (3) Who are the ‘experts?’ (4) If you are unwilling or unable to connect with consumers 1-to-1, how do you expect to connect with them 1-to-million, which is what you seek to achieve through the innovations and communications you create?

Paradox 1: Innovation is crucial, yet a vast majority fails

80% of executives believed their business models were at risk of disruption1. 84% considered innovation important to their growth strategy1 and a key determinant of their future success3, and only 4% had not defined it as a strategic priority2. More innovative organizations had +11% revenue and +22% EBITDA4. But, 95% of all product innovations5 and 92% of startups6 fail, and only 6% of executives were satisfied with their innovation performance1!

Sources: 1 McKinsey Global Innovation Survey; 2 McKinsey Global Survey 2010; 3 Accenture 2015 US Innovation Survey; 4 Booz & Co. 2011 Global Innovation 1000 report; 5 HBS professor Clayton Christensen; 6 Startup Genome report

Paradox 2: Innovation is widely practiced, but is often not understood

82% of organizations ran innovation similar to their regular operations3. 72% admitted to missing crucial growth opportunities3 and 60% struggled to learn from past mistakes3. 60% of the top 10 global innovators were “Need Seekers” – focused on engaging customers – rather than “Market Readers” and “Tech Drivers” – focused on external trends4.

Sources: 3 Accenture 2015 US Innovation Survey; 4 Booz & Co. 2011 Global Innovation 1000 report

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Paradox 3: Even when innovation succeeds, it’s not necessarily ‘good’

Today’s world is defined by Capitalism (and, increasingly, its alter-egos Philanthropy and CSR), and whilst it is justified on grounds of fulfilling needs most efficiently and creating employment, it is criticized for prioritizing profit over social good, natural resources, and the environment; and creating inequality and economic instabilities.

Capitalism’s victory in recent times has come at a price – an unequal world with mounting strife, increasing populations with significant impacts on the environment and wildlife and, ironically, less happiness and the risk of extinction.

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