5 Common Innovation Failures and How to Solve Them

This article is an excerpt from the Shortform book guide to "Ten Types of Innovation" by Larry Keeley, Helen Walters, Ryan Pikkel, and Brian Quinn. Shortform has the world's best summaries and analyses of books you should be reading.

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Why do so many innovation projects fail? What are the solutions that will fix all of your innovative problems?

In Ten Types of Innovation, Larry Keeley and his co-authors identify a number of reasons that innovation projects fail. Just a few specific reasons they pinpoint are: A project can fail because it doesn’t incorporate enough types of innovation, tries to incorporate too many types at once, or focuses on the wrong types.

Keep reading to learn why innovation failures happen and how to prevent them.

Problem 1: Insufficient Scope of Innovation

According to the authors, the most common reason why innovation failures happen is that they aren’t bold enough: They don’t change anything enough to make a difference for customers because they focus on minor improvements that include only one or two of the 10 types of innovation. Thus, even if they succeed in developing an improved product, they fail to generate new value for your company.

Solution: Implement at Least 5 Types of Innovation

The authors’ solution to this innovation failure is to think big: Tackle the difficult problems that nobody else is addressing and employ several types of innovation to build a solution that’s unique and difficult to copy. They assert that most historically significant innovation projects involved at least five of the 10 types of innovation.

Problem 2: Lack of Clear Direction

The authors also observe that innovation projects often fail because they don’t have a well-defined scope or clear objectives. What market should your innovative new product disrupt? What problems or pain points does it need to solve in order to be valuable to buyers in that market? Perhaps most importantly, which of the 10 types of innovation do you most need on this project? In the authors’ experience, assigning a team to brainstorm ideas for new innovations without giving them clear goals along these lines seldom generates beneficial innovations for your company.

Solution: Visualize Your Industry to Identify Opportunities

Before you dive into an innovation project, you need an objective. You may not know how to achieve your goal yet—figuring that out is the purpose of the project—but you should know what you want to achieve and how it will benefit your company.

How do you come up with this initial vision? The authors say you need to analyze your industry to determine where the real opportunities are. Usually, there are industry trends that lead most firms to focus on a few specific types of innovation at any given time. But the greatest opportunities usually lie in innovating where nobody else is.

So ask yourself—or experts in your industry, for that matter—what the current trends are. What are the driving factors behind those trends? Who are the industry leaders that are currently exploiting them?

Once you’ve answered these questions, then ask yourself what you could do to change the driving factors in a way that gives you control. Are there types of innovation that nobody is applying? Are there problems or pain points that the industry currently ignores? Have there been transformations in other industries that nobody has implemented in your industry yet?

As you do your research, the authors recommend constructing a 3D graph showing the amount of each of the ten types of innovation that’s taken place in your industry over time. Such graphs can help you visualize industry trends in innovation and see at a glance what types of innovation are absent.

Problem 3: Incorrect Direction

Of course, there’s always a possibility that your initial vision for an innovation project was wrong. As the authors observe, innovation projects also fail when they focus on solving problems that customers don’t care about or implement solutions that work well on paper but not in practice.

Solution: Iterate on Prototypes

To make sure you’re working on the right problem and developing a truly practical solution, the authors advise you to build and test prototypes—not just of your core product, but of every type of innovation that you hope to implement. For example, if you’ve come up with a novel revenue stream and a relational innovation, try building a “prototype” of these by diagramming how they would work or testing them on a small scale.

Prototypes mitigate risk in an innovation project by allowing you to test your assumptions about how things will work and what customers will like. The authors say your first prototypes should be extremely low-cost models that you can put together with minimal effort. He recommends starting with “paper prototypes.” A paper prototype might be a sketch illustrating the flow of information, value, and material between different parties, or a written story describing day-to-day operations with your proposed solution in place.

Refine your solution as much as you can based on what you learn from your first prototypes. Then build a set of slightly more refined prototypes and repeat the process. For the second round, you might use simple mathematical models or video animations instead of sketches and stories. Continue to iterate until you get close to a final solution that you can roll out with confidence.

Problem 4: Inadequate Execution

While the authors see insufficient ambition and misdirected focus as more common and more fundamental problems, they acknowledge that the opposite problem is also possible: Sometimes companies can’t execute their innovation projects successfully because its scope or complexity exceeds their capabilities and resources. The more types of innovation you incorporate into a project, the more complex it becomes. So innovating across more types does carry some risk.

Solution: Keep Your Expectations Realistic

To mitigate the risk of failing at execution, the authors say you need to approach innovation projects with the right level of ambition. Assess what kinds of innovation you actually need to make your product successful and only work on those types. As we discussed earlier, you’ll probably need several types of innovation to disrupt the market. But maybe you don’t want to disrupt the market. The authors concede that if you’re already the market leader, periodically making minor improvements in one or two areas may be sufficient to stay in the lead.

Problem 5: Undisciplined Approach to Innovation

The authors assert that many companies don’t know how to practice innovation as a formal discipline. They treat it as something almost magical that can’t be predicted, much less planned or implemented by employees on a regular basis. This undermines their ability to execute innovation projects successfully or, more commonly, prevents them from undertaking innovation initiatives in the first place.

Solution: Develop Your Capacity for Innovation

If you suffer from this problem, the authors say you need to get past the idea that innovation is somehow special and simply develop a capacity for it, just like you have a capacity for record-keeping, internal communications, and other business activities.

The authors recommend developing a standard set of generalized innovation strategies. For example, turning a product into a service through a combination of organizational, relational, revenue stream, distribution, and support innovations might be a standard innovation strategy. Base your standard strategies on successful innovations of the past and refine them with lessons learned from your own projects—both successes and failures.

Then you can use these strategies like a sports team uses a playbook: You practice thinking through how you would apply them until they become rote. Then, in a given situation, you can quickly run through them in your mind and pick out which ones might be most effective.

The authors observe that sometimes managing an innovation project is more a matter of managing emotions than anything else. People are naturally risk averse and afraid of the unknown. Innovation projects tend to make them nervous because they have to do new things or explore unproven options. Some of them will object to the project just because it pushes them out of their comfort zone. So if your employees raise objections, listen to their concerns empathetically, then reiterate your vision and encourage them to move forward. And make sure your company’s reward system and metrics align with your emphasis on innovation so that everyone has an incentive to practice innovation.

5 Common Innovation Failures and How to Solve Them