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4 reasons why innovations fail

Not every idea leads to the next big innovation. What are the reasons why innovations fail and what can you learn from them in innovation management?

Knowing the most common causes of failure is important for resilient innovation management.

Why innovation fails?

There are many reasons why innovation projects or new products do not break through on the market. Many companies realize that their innovations are doomed to failure only after considerable cost and intensive effort. Knowing the most common reasons for the failure of innovation programs is therefore important for robust innovation management. Although it is not possible to know all the potential problems in advance, the most frequent mistakes can be avoided.



Let's go through the four most common reasons for innovations failing:

Reason 1: Making the wrong decisions with your innovation strategy

The wrong direction is often taken in innovation projects or when choosing ideas. Making the wrong decisions could relate to the prioritization of ideas, the pursuing of concepts, or market tests. If even the company's management veer off from the chosen path (i.e. the innovation strategy) with their decision making, this increases the risk of innovations failing.


How can the situation be improved?

  • With a clear innovation strategy that is put into practice, decision-makers and innovation managers establish the necessary framework.
  • Keep an eye on your innovation portfolio and pay attention to new trends in your industry every one or two years. It might be necessary to adapt your innovation strategy.
  • Create a binding innovation process tailored to the needs and requirements of your organization.

Reason 2: Innovation not being prioritized

Inadequate commitment and a lack of support for innovations are one of the main causes for the failure of innovations. Dedication towards innovation being formalized in strategy papers and packaged in marketing claims is not enough. Innovation is something you practice. No matter how eager your innovation managers are, if the decision-makers are not on board, this will transmit through all levels of the organization.

How can the situation be improved?

  • Work on your organization's culture of innovation so that employees can identify with innovation projects.
  • Encourage and reward the innovation work of your employees. You will thus increase the willingness to innovate.
  • Innovation tasks must become part of the job descriptions of your employees and management staff. NB: there needs to be time for these tasks.

What are innovations?
Innovations are new ideas, products, services, or processes that represent a significant advance over the current state of technology, science, or society and that can bring high benefits to people. They can be both incremental and disruptive and are often the result of research and development, creativity and entrepreneurship. Innovations can create a decisive competitive advantage for companies, organizations and nations and are an important driver of economic growth and social progress.


Reason 3: Insufficient market focus 

Many examples of failed innovations are down to a lack of focus on the market and the needs of customers. Consider the oft-cited example of Kodak, whose market of analog photography was disrupted by the digital camera.  How can the situation be improved?

  • Work more with a focus on markets than technologies in your innovation projects.
  • Seek dialog with customers, markets, or target groups. Act in a customer-focused manner, and address the needs of your customers, both spoken and unspoken.
  • Critical thinking helps. Question beliefs and assumptions about markets, technologies, or target groups.

Reason 4: Impeding structures that kill ideas 

The bigger an organization is, the slower the processes often are. Sluggish processes with long decision-making cycles can be a death knell for innovations. On top of this often come interface and communication problems. All of this has a negative impact on the quality and efficiency of innovation projects.


How can the situation be improved?

  • Transparent decision-making structures and regular gate meetings facilitate the work towards new things in innovation management.
  • Make sure the workforce are well interconnected internally. This improves cooperation and accelerates processes.
  • Here too, there is nothing more important than a culture of innovation: openness, appetite for risk, and willingness to change are the keys for successful innovation.

Innovation success can only happen holistically 

There are all kinds of reasons why innovation projects or new products fail on the market. In most cases, a flop is not due to the quality of an idea, but rather the implementation. In other words, there are internal, organizational causes.

This is where company management and innovation management need to focus their attention.

If the framework conditions that foster and strengthen innovations are in harmony, companies with the same resources can record significantly higher innovation successes and thus additional sales. Innovation success therefore always depends on several factors: the innovation strategy, the structures, the methods, the processes, and the culture of innovation.


Want to learn more about how these factors are connected? The following paper provides the answers.  


Tanja Eschberger-Friedl

With her clear and focused way of working, Tanja supports you with strategic innovation management and the successful development of product, process, and market innovations. Tanja always keeps an eye on the essentials. Holistic solutions are her aim. She applies her specialist knowledge as a scrum master and agility coach to achieve this.

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