Numbers speak for themselves and the reality is that 90% of start-ups never make it. For product innovations, the numbers are even higher — with 19 out of 20 failing to reach their potential. In part, this is the nature of innovation. But while there are numerous elements we cannot control, there are also many which we can – and most definitely should.
We talk about innovation all the time — how critical it is to securing our future, new opportunities, and growth. However, for many, it is a buzzword thrown around simply to describe something new — or the process of turning an idea into reality. While this in part is true, those of us that create, manage, support or fund innovation need a definition that embodies the simplified, yet complex nature of the process.
The best definition I have encountered - and one I use daily in my professional life – is the following: Innovation is the process of creating value by applying novel solutions to meaningful problems.
It is only when these three; value, novelty and problem solving, come together that we can truly talk about innovation. Otherwise we may be dealing with invention (value is missing), optimization (lack of novelty) or art (may not be solving a meaningful problem).
Innovation requires all three. With the added dimension being time.
Innovation is the process of creating value by applying novel solutions to meaningful problems.
Why do innovations fail and how to make sure they won’t?
In the innovation business, we are often reminded that innovations encounter problems along their entire path — from the idea and concept development phase all the way through to scale up and launch. We keep repeating that chances of things not working out — from a flawed business model to unexpected issues with testing, validation or launch - are high. And indeed, they are.
But instead of leaving it at that, we should focus on ways to increase the chances of success.
1. Future success requires space and resources for innovating
In an established commercial setting, business is typically already in operation with an existing product or service offering. Delivering to and serving customers takes the majority of time and effort. For such a company, the value of innovation is in possible growth opportunities, differentiating offering from the competition, responding to changing customer needs, or attracting the best talent. These benefits are future-oriented and as such, require investment.
This brings us to the first point — making sure that we assign resources and time for innovation. We need to acknowledge the strategic importance innovation has for a company and prioritize it accordingly — not letting the business-as-usual take precedence and excessively influence the innovation pipeline. Sometimes this may require creating autonomous structures or space for innovation management.
2. Innovation management calls for agile decision making
This is the next aspect we have control over. Innovation projects need a different type of management - one that is oriented towards large and fast growth, where difficult decisions need to be made on the spot and with a different set of criteria to follow — an approach that is bold and entrepreneurial. Getting the right innovation management, culture and strategy in place is critical to increasing the likelihood of success.
When we create innovations, both time and timing are of the essence. The speed of organizational decision-making processes may mean the difference between success and failure. Eliminating unnecessary structural obstacles and keeping decision-making agile and informed is a way to tip the balance in our favour.
3. You can’t create value without knowing the market
Last, but not least, is market orientation. In order for us to succeed, we need to know the domain in which we operate — the market and the processes — which are responsible for creating value. We need to understand the problem we are attempting to solve and what it means for our customers and what our competition may be. And even with these considerations in place, timing may still be the determining factor in whether we are successful or not. Premature launch or delay may lead to insufficient demand for our solution. And when that happens - failure is just a step away.
So one might ask - with such odds stacked against us, and the numbers clearly unfavourable, why do we need to innovate? And the answer is simple - it is the only tangible action we can take to create the future and assure that our company maintains or increases its share in the market. It is an investment into the future that with the right strategy, support and management may shift us towards ensuring success.
VTT iBEX – the runway of innovations
VTT iBEX is our annual early stage innovation instrument aimed at solving grand challenges with potential massive impact. This strategic, structured programme is designed to help the teams focus on developing their solution with simultaneous value creation and feedback from multiple stakeholders.
Follow our teams on social media with the hashtag #VTTiBEX.