Change Implementation Techniques for Forming Transitional Team, Creating Alignment, Maximizing Connectedness and Creativity

Technique 6.8 Reasons for Innovative Failures

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(when new ideas are not inspiring the market place)

Do you suffer from any of the following 16 reasons innovations fail? Answer "yes" or "no".

Reasons*i

Yes

No

1. Management ineptitude

   

2. Traditional template of "find a need & fill it" dominates thinking

   

3. Customers/clients are not involved

   

4. Yesterday's solutions, strategies, patterns & systems being applied to today's problems

   

5. Fear of ridicule, rejection, being branded as odd.

   

6. Strong desire to maintain usual habits, routines, status quo thinking

   

7. Too much caution

   

8. The human brain loves rejecting new stuff

   

9. Ideas are not accepted on their own merit but on emotional bias

   

10. Rules & regulations stifle innovation

   

11. Peer group pressure works against new ideas

   

12. Repeated rejection results in fewer innovative suggestions

   

13. People who feel stressed cling to the status quo

   

14. Inability to distinguish between innovative ideas and risky ideas

   

15. Focus on operational, rather than strategic, efficiency

   

16. Not allowing a creative idea time to come to fruition

   

NB The more "yes" answers, the greater the chance of innovative failure

Notes on answers

1 Management ineptitude accounts for 25% of reasons for innovative failure (USA data)

2 Traditional template of "find a need and fill it" (via market research to determine costumers' needs and then R & D to develop products to satisfy these needs) has had very limited success. It is claimed by Eric von Hippel of the MIT Sloan School of Management (2005) that some 75% of all commercial innovations fail. Research has shown that some users or consumers of the products and services were ahead of the trend and developed the really new products and services. These users have 3 distinct characteristics:

i. they innovate because they have a strong need for a new or modified product or service that does not exist in the market

ii. they push a product to the tipping point before the mass-market picks up on it

iii. they reveal their innovation freely

Some examples are

i. mountain bikes - some very passionate bike riders invented the sport of mountain biking. They modified the available bikes as they were too fragile for their sport. They made lots of innovations which, several years later, manufacturers started to copy and are standard in commercial mountain bikes today. They added brakes from little motorbikes so that they could go downhill faster, and built better suspension so they could make high jumps without injury. They developed and built their own bikes in their own workshops.

ii. Apache browser software - has 60 percent of the market and was developed by users

iii. semi-conductor industry - every year custom chips worth around $US 15 billion are designed by users

3 Not involving the customers/clients, ie

"...Innovation isn't what innovators do, it's what customers and clients adopt..."

Michael Schrage as quoted by Mike Hanley, 2006

Need to get the customer actively involved, ie co-opting them in the innovation process rather than asking people what they might want and/or their requirements. This co-option process reduces the development risks and increases the learning from the process of development more than design. Furthermore, prototyping and testing can provide immensely valuable subsidies for the new product from customers and develops strong customer loyalty

Some examples

i. testing on-line. As a result, it has reduced its cost and time of product testing by a factor of 100

ii. Proctor & Gamble (global consumer products conglomerate) does all of its concept Microsoft with its Windows 95

"...Microsoft had some 400,000 customers beta test the product..estimates that the time and intellectual capital those beta testers contributed were equivalent to a billion dollar subsidy for what became Microsoft's flagship product. That meant Microsoft's customers paid more towards the development of the product than the company itself..."

Michael Schrage as quoted by Mike Hanley, 2006

4 Experience, assumptions and dominant ideas can be major obstacles to innovation, ie be careful of using yesterday's solutions, strategies, pattterns and systems for today's problems.

"...so much management is premised by using the past to predict the future..."

David Snowdon as quoted by Helen Trinca, 2003

Furthermore,

"...the more expert we are, the less objective we can be. Limited objectivity leads us to the doorstep of bias - an unconscious belief that governs our thoughts and behaviors. Subject matter expertise is the mother of all biases, and no matter how......focused we may profess to be, it can inhibit our ability to render the optimum solution..."

Mathew May, 2005

 

For example, Xbox development in Microsoft..The original DirectXbox name was shortened to Xbox. However, Microsoft's marketing department did not like this name and recommended many alternatives. During market testing, the Xbox name was left on the possible names list to demonstrate its unpopularity with consumers. However, this testing revealed that Xbox was the preferred name and thus became the official name of the product.

Linked with this is tethering, ie because this equals that; polarizing tendencies, ie black and white, no shades of grey, "yes or no" answers; too many boundaries, ie set limitations to discussions. Furthermore,

"...It's easy - too easy, in fact - to relinquish your responsibility for your idea to experts. This is almost always a mistake, because experts are only experts in their field. They are not experts in your idea.....ask them (experts) for their opinion, and they'll give you something back that's generic, predictable and fairly useless......You need to flesh out your own ideas. You need to do your own research. You need to take responsibility on how you plan to turn an idea into action. That way, when you approach the experts - the accountants, legal brains - you have something to get their teeth into...... experts who are demons at cutting through the verbiage to the relevant details. An expert who makes things more complicated isn't doing the job right...... an expert should make things simpler..."

Richard Branson, 2008

It is commonly thought that experience is a foundation of wisdom but sometimes experience trades on the illusion of knowledge as it is based on the past, ie experts in the old paradigms, eg

- in mid 1970s Sony was advised that Walkmans would not be a success

- Xerox was advised against going into small copier business

- in 1938, the New York Times predicted the end of the pencil with the development of more sophisticated type writers

- in 1975, Business Week predicted that the paperless office was just around the corner

- in 1919, a society of engineers in the U.S. dismissed the refrigerator as not suitable for household use

- at the dawn of the TV age, the New York Times wrote

"...The problem with television is that people must sit and keep their eyes glued to a screen; the average American family hasn't time for it..."

as quoted by Fortune, 2005

- around a year before Nelson Mandela was released from jail in South Africa, a conservative American think tank made a study that predicted that there would be civil war and around 1 million people would die after his release

- one of the world's greatest physicists, Lord Kelvin, President of the Royal Society, stated around 10 years before the flight of the Wright brothers that heavier-than-air flying machines are impossible. He made other pronouncements, such as radio has no future and X-rays will prove to be a hoax!!!!!!

- Tom Peter's "In Search of Excellence" (1982) described some successful companies in USA. Yet 5 years later, 2/3 had "gone backwards financially" and a couple had disappeared.

- Gary Hamel published "Leading the Revolution" (2000) and was full of praise for what Enron was doing. Soon afterward Enron was one of the worst business collapses in USA history with jail sentences for some of the main players and the demise of one of the world's largest accountancy firms (Arthur Anderson).

- Bill Gates nearly missed the Internet. In April 1995, he wrote a memo entitled "The Internet Tidal Wave" in which he did a u-turn and admitted that Mircosoft was being disadvantaged by ignoring the Internet.

- In 1898 the head of the US patent office resigned because he deemed that there was nothing left to discover!!!!!!!!!

- In 1960s it was stated that people would always need hats!!!!!!

- Many record firms in the 1960s stated that people would always need music albums in "long playing records" format!!!!!!

- In the 1950s, most experts in the airline industry (including the American aviator Charles Lindbergh) didn't think that jet engines had a future in commercial aviation

Even our greatest experts and innovators (Rachel Botsman, 2015) get it wrong when trying to predict the future, eg

- Bill Gates (2004), ie 
"...two years from now, spam will be solved..."
- Steven Jobs (2003), ie
"...the subscription model of buying music is bankrupt. I think you could make available the Second Coming in a subscription model and might not be successful..."
- Paul Krugman, Nobel prize-winning economist (1998), ie
"...by 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine......10 years from now, the phrase "information economy" will sound silly..." This is based on the traditional economic view that there is a diminishing return to technological progress over time 

Some of the reasons we get incorrect predictions are "...viewing new technologies through the lens of the dominant existing technologies can lead to undervaluing new solutions as they are often regarded as merely incremental substitutions for what we have......we appreciate the aspects of an innovation that has immediately apparent benefits and miss its long-term benefits or unintended consequences that might emerge like new markets......predictions related to doomsdays and calamities often underestimate the inherent resilience of systems, especially the capacity to successfully adapt to threats and improve their capacity as a result of coping with extremes..."
Rachel Botsman, 2015

Some other examples of incorrect predictions (Rachel Botsman, 2015)
i) "...the horse is here to stay for the automobile is only a novelty, a fad..."
The president of the Michigan Savings Bank giving advice to Henry Ford lawyer about investing in the Ford Motor Co.. Luckily the lawyer purchased 50 shares for US $ 5,000 and sold his investment 30 years later for US $ 12.5 m.. When cars first appeared they were called horseless carriages and look remarkably similar to horse carriages
ii) "...the coming of the wireless era will make war impossible, because it will make war ridiculous..."
Guglielmo Marconi (inventor of the wireless telegram) based his forecast (1912) on the assumption that telephonic connection would make it easier than ever before to share information across even distant borders, thus allowing a greater understanding between possible combatants. Two years later, World War I, in which 37 m. people died, started
iii) "...the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse..."
Robert Metcalfe, inventor of Ethernet technology, made this prediction (1995) which is spectacularly wrong with billions of people and thousands of organisations using the Internet for both private and business uses. He thought that the Internet was growing far too quickly for the technology to be able keep it stable and secure
iv) "...the Americans have need of the telephone, but we do not. We have plenty of messenger boys..."
Sir William Preece, British Post Office, Chief Engineer (1876)
v) "...the telephone has too many shortcomings to be seriously considered as a means of communications..."
William Orton (1876)
vi) "...who the hell wants to hear actors talk?..."
H. M. Warner, Warner Brothers (1927)
vii) "...I'm dubious that Amazon and many other Internet retailers will ever generate huge profits that their stock prices suggest..."
Thomas Friedman (1999)
viii) "...before man reaches the moon, your mail will be delivered within hours from New York to Australia by guided missiles. We stand on the threshold of rocket mail..."
Arthur Summerfield (1958), US Postmaster General ordering the first and only successful flight of a guided missile stuffed with 3,000 letters from a navy submarine
NB it is very hard to make predictions of highly improbable events
"...the problem with most......predictions is they focus on what already exists and failed to avoid current biases and uncover the real potential of a breakthrough, even it is not yet quantifiable or even fathomable..."
Rachel Botsman, 2015

All too often experts are

"...inclined to argue why you can't do something while our emphasis has been to make something out of nothing..."

Masura Ibuka (founder of Sony) as quoted by Robert Kriegel et al, 1996

Narrow-paradigms thinking of experts is linked with fragmentation that is reflected in rigid academic divisions between disciplines, such as chemistry, physics, biology, psychology, astronomy, geology, zoology, physiology, economics, sociology, etc.

"...in fact, the further one advances in any scientific discipline, the more narrow it tends to become. This carries over into all fields in modern society, to the extent that what it means to be an expert today is knowing a lot about little..."

Peter Senge et al, 2005

More important than experience is the attitude to experience, ie

- Are we willing to examine our experiences?

- Do we have the humility?

"...of being attentive to what is taken for granted in our own opinions and perspectives. Indeed, it is the humility to treat our perspectives as opinions, as views open to doubt and not as knowledge that is beyond doubt..."

Steven Segal, 2001

5 A major suppressant of novel ideas is fear of

- ridicule (laughed at, thought silly, made to feel embarrassed)

- being rejected

- being branded odd

- looking a fool

Fear can be a response to real or imagined attitudes

6 Habit or comfort zone (status quo) or routines‐ unthinking habitual behaviour is ingenuity's worst enemy, ie get into ruts, doing the same thing in the same way at the same time, and thus our approach to people, problems and opportunities becomes predictable

To stimulate creativity in order to foster innovations, one needs to consciously break routine by

- traveling to work a different way

- going to a different cafe or restaurant for a meal

- inviting people from other departments to your meetings and involving them, etc

Too cautious, ie

- "test it to death"

- "do only what the customer asks for" conservatism

- "failure is penalised"

- "no mistakes", ie frightened to make a mistake and/or fail. Striving to avoid mistakes leads to rehashing old ideas. When you cannot afford to be wrong, you rely on what worked in the past. Yesterday's thinking and action created the problems of the past and not necessarily their solutions.

If you are taking risks, you will make mistakes, and it is how you handle and learn from the mistakes that is important. As Bill Gates states

"...it is the way people deal with things that go wrong that is an indicator of how they deal with change..." as quoted by Robert Kriegel et al, 1996

"...Failure is not a crime; failure to learn from failure is a crime..."

Robert Kriegel et al, 1996

"...There is something worse than failure, it is regret..." for not trying

The Dish (film), 2001

"...We learnt that mistakes are learning, unless you repeat the same mistake. If you don't allow people to make mistakes, how can you expect people to innovate..."

Steve Vamos (Managing Director, Microsoft Australia) as quoted by Janne Ryan, 2005

7 The human brain has an incredible capacity for rejecting new information

8 Premature judgement and prejudice are exemplified by instinctive "knock-backs" or "knee-jerk" reactions. If ideas are not taken on their merit and/or there is an emotional bias against the ideas, people stop making suggestions

9 Peer group pressure ‐ this can be linked with fear, prejudice, premature judgement and comfort zone

10 Compartmentalisation, bureaucracy, hierarchical structures and formality (rules and regulations) ‐ all can stifle innovation

12 In times of stress, people close their minds to new ideas. They tend to reach for the same levers that worked in the past, even if these levers don't work in the new conditions

13 Failure to distinguish between new ideas and risky ideas can reinforce an organisation's tendency to shun innovation and over-invest in the past. It is safer to stay with what you know rather than explore what you do not know.

Remember: novelty implies a risk; risk is a function of uncertainty multiplied by the size of financial exposure, while newness is a function of the extent to which an idea defies precedent and convention. For example, the Starbucks debit card provides convenience and little risk as it relies upon proven technology and gives the customer a solid benefit

14 Too much focus on operational efficiency and not enough on strategic efficiency, ie

"...a company can be operationally efficient and strategically inefficient. It can maximise efficiency of existing programs and processes, and yet fail to find and fund the unconventional ideas and initiatives that might yield an even higher return. While companies have many ways of assessing operational efficiency, most firms are clueless when it comes to strategic efficiency..."

Gary Hamel, 2003

This means they perform do activities/things more, better, faster and cheaper, rather than looking at alternatives

All this adds up to not being willing to look at alternatives; alternatives are the opposite to

- rigidity (being unwilling to look for alternatives indicates a very rigid mind that does not seek a better way of doing things; it is rigidity based on arrogance and defensiveness)

- complacency (are happy with the status quo and do not want to change things)

15. Not realising that to bring a creative idea to "fruition" can take time and there are many failures on the way, eg

"...We find that creativity happens not with one brilliant flash but in a chain reaction of many tiny sparks while executing an idea..."

Keith Sawyer as quoted by Claudia Wallis, 2006

"...the art of invention doesn't come about with a flash of inspiration. It is a vigorous and scientific process. I applied this lesson to the cyclonic system I invented for my vacuum cleaner. It took me 4 1/2 years to develop the technology and about another 10 years and some 5,000 prototypes to bring it to market successfully..."

James Dyson, 2005

Another example is the Wright brothers in building a flying machine

"...they tinkered with their design for years, revising each element again and again. For the wings alone, they tested more than 200 designs in a wind tunnel they built, and each attempt sparked new ideas that led to a machine that actually flew..."

Claudia Wallis, 2006

Remember,

"...progress, energy, change, improvement & simplification are all based on the search for alternatives..."

Edward deBono, 2005

Some phrases or questions which may encourage think creative thinking:

"...Forget about that for a moment

In what other ways can we look at this?

What other options might there be?

If that constraint did not exist, what would we do?

What would happen if we didn't make that assumption?

Do we need to take any of these options?

The fact is probably true, but what if it were not?..."

Dennis Hall, 2006a

How do we become more creative?

"...take risks, can expect to make lots of mistakes, because creativity is a numbers game. Work hard, and take frequent breaks,...Do what you love, because creative breakthroughs take years of hard work. Develop a network of colleagues, and schedule time for freewheeling, unstructured discussions. Most of all, guard against those romantic myths that creativity is all about being artsy and gifted and not about hard work. They discourage us because we're waiting for that one full-blown moment of inspiration..."

Keith Sawyer as quoted by Claudia Wallis, 2006

New ideas are like seeds: they need careful care and attention, otherwise they can be easily trampled and, like a badly-damaged seedling, never reach their potential.

Remember

"...products that are radically innovative tend to have longer commercial lives than other goods; they create in customers bolder expectations for the brand and high receptivity to their equally startling successors; and they tend to enjoy especially high margins, because they are so dissimilar to the offerings of competitors..."

Roberto Verganti, 2007

16. Short-termism kills innovation
There are 2 parts to short-termism that can create bad outcomes for companies, eg attitudes of the investment industry and the management of big listed companies. The investment community is judged on performance of  increasing dividends and continual share price growth that outperforms the index. Corporate management finds it hard to invest for the long term as they must ensure no slippage in short-term profit and growth.  If short-term profit slips, the organisation's share price falls which impacts both the investment industry, via dividends and share price, and management's remuneration (bonus and share schemes). Thus the current investment community and senior management would prefer that risk-taking is handled by future management/investors, rather than undertaken by themselves.
Innovation is an example of risk-taking where there will be short-term pain and hopefully long-term gain.  Owing to their short-term interests, both the investment community and corporate organisations are not keen on innovation.
"...just like business, success cannot stand still - it needs to adapt. And the adaption required now is not incremental, a very large, mostly as a result of enabling technologies that are collapsing value chains and business models..."
Alex Pollak, 2016

(sources: Neville Smith, 1990; Robert Kriegel et al, 1996; Darrell Rigby, 2001; Leon Gettler, et al, 2002; Martin Kornberger, 2005; Janne Ryan, 2005; Peter Senge et al, 2005; Gary Hamel, 2003; Claudia Wallis, 2006; Mike Hanley, 2006; Robert Winston, 2002; Dennis Hall, 2006a; Mike Hanley, 2006b; Mathew May, 2005; Roberto Verganti, 2007; Richard Branson, 2008)

 

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