How To Manage Innovation Failure

Most innovative ideas fail, but there is a way to manage it


We’ve all been in a situation where we’ve seen an idea being implemented by somebody in our company, team, or even just friendship group that is destined to fail. At some point they have read a book describing a philosophy that on paper makes perfect sense, but in reality is about as likely to work as an inflatable dartboard.

However, the issue that often arises in companies is that these ideas come from the top and people go along with them because they either fear for their job or trust the person issuing the edicts so implicitly that they can’t see the flaws in the plan. When this happens the failures in innovation can often lead to more than a loss of money, in the worst occurrences it can lead to a full on company implosion.

This kind of decision is not simply a case of adopting ideas that are destined to fail, but also not adopting ideas that have a clear upside. Kodak are a prime example of this. The company once held 85% of the entire camera market around the world, producing millions of films and film cameras every year. One of their engineers began playing with a charge-coupled device which after years of experimentation became the world’s first digital camera. However, rather than developing the technology that was clearly the future of photography, leadership at the company actively sat on the idea and concentrated on what they knew. They soon found themselves well behind the competition after digital photography becbame dominant and subsequently filed for bankruptcy in 2012, with an 83% reduction in staff.

So when you see these kind of actions harming the company how should you react?

The single most important element that allows poor innovation ideas to manifest and destroy a company is thoughtless obedience. Essentially, going along with something because you’ve been told to do it, without really objecting to what or how something is being done. If an attempted innovative idea comes from people at the top of the company those who are actually executing need to say something or 12 months down the line when the failures have truly manifested themselves, it will be too late.

Once things progress past a certain point or if those who protest find their warnings falling on deaf ears, companies will start to see their best employees jumping ship, desperate to get out before things get much worse. At this point the idea of company culture is essentially gone and instead people are thinking of only themselves, their survival and their well being, putting the needs of the company on the back burner in exchange for basic survival.

Making sure that people think company first is about creating an environment where people are working for the company, rather than working for themselves. This is particularly a problem amongst sales staff, where their compensation directly correlates with the success of the company. If they see their commissions cut because nobody wants to buy from you, there will be an exodus. This exacerbates the issues throughout the rest of the company as with the best sales staff gone, sales will often decline, so revenue will decrease, creating a vicious circle of failure.

This also requires management who are receptive to the views of every person they lead, something that is unfortunately lacking amongst some leaders. If somebody many salary bands below you says ‘this isn’t going to work because…’ they should not be discounted out of hand, complaints should be noted and measured, then openly discussed with others. Many companies take the ‘give it time and it’ll work’ approach, which is fine for a while, but if this comes from hope over evidence, then the plan should be rethought.

To deal with this situation there needs to be strict deadlines and exit strategies in place ahead of time. For instance, if sales haven’t picked up within 3 months, then the company should revert back to a proven product/strategy/service. Setting these deadlines lessens the risks and allows potential innovations to be seen as experiments rather than full replacements, which alleviates anxiety around their implementation.

Sitting on a failure is not something that most leaders are comfortable with, but needs to be something that takes place in order to eventually have success. Thomas Edison famously said ‘I haven’t failed, I’ve just found 10,000 ways that won’t work’ and this needs to be the same mantra of company leaders. Admission of failure nullifies the failure and allows it to become a lesson rather than a destructive event. Those who persist with something because they believe it will work whilst all around them say otherwise and results show failure are those who are ultimately known as a failure. Hard-headedness is often seen as a positive personality trait, but if it leads to the destruction of a company, it is hard to see it as anything but negative. 


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