Why ongoing innovation failure rates demand the discipline of Performance Innovation

For the 30 years I’ve worked in innovation, claimed failure rates have remained remarkably high – anywhere between 80% and 95% depending on which data source you trust most. Critically, these are in-market failure rates, not ‘in-process’ failure rates, which, let’s be honest, should be reframed from failures to lessons learned.

Despite huge increases in resourcing and funding of innovation over that time frame, the reality is that innovation success rates in most businesses remains persistently poor. Unsurprisingly, 94% of senior execs claim to be dissatisfied with their company’s innovation outcomes and only one fifth of businesses claim to fully achieve their innovation goals.

So innovation, in big organisations especially, has an undeniable performance issue.  Yet, despite this expectation gap and the increasing pressure on businesses to deliver more for less in a tough external environment, there are few signs that the house is on fire.  As a discipline, innovation continues to be driven by hope over expectation – a belief that this time it will be different, won’t it?

In large corporations the issue lies deep in the ‘innovation engine’. Yes, good ideas matter but not as much as the ability for the business to get behind and scale ideas. The “money follows ideas” mantra no longer works - if it ever did. Incremental category growth is being driven by challengers in the fringes, smaller companies that have to make their ideas work. In contrast, larger, better resourced companies prefer to dabble with a ‘launch and see’ mindset, often judging ideas a failure in market because their expectations were wrong and a lack of patience compound the issue by pulling support too soon.

For innovation as a discipline to survive the existential threat it currently faces, it must front up to the performance challenge. From our viewpoint, innovation is entering the Age of Performance, one where the focus is less on hope-fuelled ideas, and more on fine-tuning the innovation engine in order to step-change outcomes. And in our experience, minor tweaks have a big impact – assuming you have correctly diagnosed the issue and made the appropriate interventions. Much of our work at Mangrove involves helping innovation leaders to correctly diagnose their performance challenges before ‘remapping’ their innovation engine. Fortunately, rarely are major overhauls needed.

We assess an organisation’s total innovation set up through 3 lenses:

• Strategic precision – how well the role and expectations of innovation are defined

• Advanced techniques – the extent to which innovation teams and the wider businesses apply the necessary tools that drive successful innovation – blending both the art and science of the discipline

• Performance boosters – how well the people and the culture are geared to supporting innovation through development and post launch.

Typically, a few small tweaks across these areas can have a significant impact on improving outcomes. We benchmark versus best practice we’ve seen work well elsewhere to give our clients practical solutions that have a high chance of making the desired shifts.

If you’d like to know more about how our Innovation Remap approach could help improve the performance of your innovation engine, then please do get in contact.

Justin Wright

Managing Partner

Mangrove