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Top 3 Reasons Why Large Organization Innovation Programs Underperform … And What To Do About It

Last week, I had the distinct pleasure of presenting a webinar as part of the Global Innovation Management Institute’s Think Tank, a weekly webinar where thought leaders discuss innovation and promote collaboration around the world.

During the presentation, I tackled the three main reasons why large organizations are underperforming their innovation efforts, and shared several key methods for getting back on course.

Let’s first take a look at the why – why innovation programs underperform: 

These three factors show up in different ways: 

  • Lack of innovation clarity. Symptoms might include: a lack of a common language and decision metrics; a lack of clear mandates and permission to innovate; or having portfolio concepts that  are too “small” (won’t make enough change). 

 

  • Insufficient innovation ecosystem. This is present when there is significant institutional rigidity and misaligned culture, regulatory roadblocks, excessive technical debt, and an undue focus on transactional partnerships.  

 

  • Low implementation fidelity. Symptoms may include too much/too early focus on ideation, misalignment of mindsets and skills, inadequate or immature funding strategies, and weak leadership commitment. 

 

On the flipside, many innovation programs launch successfully. So what are these companies doing right? Successful innovation programs have the following characteristics, time and time again:

1.  They prioritize establishing a common language, clear decision metrics, and mandates to foster a culture of innovation

2. They run programs that are contained in a supportive ecosystem with strategic partnerships and regulatory alignment

3. They focus intently on aligning resources and developing the necessary skills to effectively implement and scale innovation

 

So, here are five key takeaways to build a better innovation program: 

 

  • Focus on common language: Define what innovation means for the organization and communicate the vision and goals to key stakeholders. What does success look like? What barriers and mandates do we need to address in order to be successful?
  • Know the role of the customer in innovation. Underperforming programs often dive into ideation and crowdsourcing too quickly to show progress. However, customers will typically generate smaller, incremental ideas – new features and functions. It is better to target the innovation types and success measures early in order to get more focused feedback from the customer later.  
  • Differentiate transactional vendors from strategic partners. Elevate the ecosystem with key partners and stakeholders who can drive strategic collaborations, equity relationships, and partnerships that go beyond typical vendor/transaction relationships.
  • Create platforms and ecosystems, not apps. The vast abundance of new solutions is overwhelming. And most of them are not going to change your revenue or cost curves. To be relevant to a customer, begin with a business model and let the specific technology fit into your offering. Customers want more than just another app — they need powerful value propositions that connect them into new networks via platforms and ecosystems. 
  • Evolve the risk discussion. Develop leadership that promotes a culture of strategic risk-taking built against the long-term vision. As an example, shown below, taking a big idea and breaking it into smaller launches supports long-term investment horizons without the big price tag. 

Notice that AI is not a driving force here. AI solutions are not inherently disruptive or compelling to consumers. We know this because AI is everywhere and therefore a commoditized asset. As such, it becomes an expected feature, not a differentiator.  

It all boils down to this: misaligned understanding of innovation goals and lack of a common language around innovation leads to ineffective efforts. And, fear and lack of visionary leadership hinder innovation. Overcoming these barriers is essential for not only fostering a culture of innovation, but launching successful programs that will bring your organization to its intended future state.

View the webinar recording here.

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