Innovation is the process of improvement and creativity. But to future-proof your innovation it requires an investment of time, effort, and financial resources. On top of that, the odds for the success of your creation are not very high (by some estimates, as little as 10% of innovations turn out to be a success). So, why bother?
Innovations move the needle and move the customers too. If you want to stay in the game of business, especially in today’s fast-paced world, you need to innovate.
So, can you do something to increase the odds for success for your innovation? And how can you make sure that by the time you launch, your innovation is still relevant?
In the past 5 years, while helping companies create and launch innovative products and services, I’ve been asked these questions countless times. In this article, I’m going to share what I’ve learned from my personal experience and that of others on how to future-proof your innovation through a proven method.
3 reasons why innovations fail
There are many promising innovations that failed, some even by the corporations that are known for their innovative edges like Google and Apple. I find that looking at failures can be just as, if not more insightful as looking at success stories.
Check out this list by CB Insights of the 160 Biggest Product Failures Of All Time. By exploring failed products, we can see that innovations mainly fail because:
1. There is no market need for the innovation (“stuff that nobody wants to buy”)
The first reason why innovations fail is the lack of knowledge about customer needs. If the product/ service does not offer true value to the customers, nobody will buy it. A great example I always give is the story of Google’s instant messaging mobile app Allo, which was intended to be a serious competition to Apple’s iMessage and WhatsApp.
It had some cool features like incognito mode for chats and fun features like Smart Reply. Why did it fail? Because it didn’t work on more than one device at a time because it was tied to a phone number instead of a Google account.
2. The innovation isn’t profitable (it doesn’t have a sustainable business model)
Even if you have funding, if your innovation is something you intend to sell, you need to make a profit. Without a sustainable business model and plan, you will not be able to cover production and marketing expenses. This is not a startup exclusive problem.
The retail industry has sustained itself for decades with almost no changes in the business models but is now struggling when faced with Amazon – a pioneer in business model innovation.
3. The company can’t keep up with the growth
Sometimes, management itself is not ready or willing to invest more resources to boost or meet demand. Kevin Gibbon, the CEO of Shyp, publicly admitted the role of management in the failure of this rather innovative startup.
Shyp was a promising on-demand delivery platform that launched in 2013 and raised millions in funding from investors. The explosive growth required hundreds of employees and operated in NY, Miami, Los Angeles, Chicago, and Philadelphia.
Shyp failed because, in the time of expansion, it struggled to meet the demand, and then, it was unable to sustain the expansion once the consumer growth slowed down when they started charging a flat fee for delivery.
The issues that stand in the way of future proof innovation are desirability, sustainability, and scalability.
When we look at success stories, the same pattern emerges. According to Harvard Business Review, when analyzing the annual reports of highly innovative companies, we see a big increase in expenditures for research and development, and especially towards innovation, technology, and engineering in the past 30 years.
But their success doesn’t only rely on their technological superiority and innovative business models.
They innovate around the customer experience. Steve Jobs believed that people’s needs should come before the needs of the business.
This obsession with the customer-led the company to incredible success in the past decades through impeccable design and business model innovation. And they achieved all that by innovating with the help of one simple methodology known as Design Thinking.
How Design Thinking can help you future proof your innovation?
There is a quote from a famous CTO who confessed that his company had lots of innovative and creative people. The company just didn’t know what to do with them.
Every company or team that is working on innovation needs some sort of a framework or methodology to guide the process. One of the most powerful and versatile methodologies for the process of innovation is Design Thinking.
Design Thinking is a simple yet very powerful methodology that combines research, teamwork, and testing in order to ensure that the innovation you’re working on is viable and will meet the needs of the customer.
Design Thinking has been around for a while and was used in creating many products we use today (like the computer mouse, for example, first created by Apple).
Since I became aware of Design Thinking, I started to see so many practical applications for it, even outside the process of innovation. But most importantly, I’ve recommended it and help over 30 companies implement its use in their innovation process. And the results were amazing.
So, why does Design Thinking help us innovate better, and create products for the future? If innovations need desirability, sustainability, and scalability to succeed, how does DT help in that regard? Here are my top 3 reasons:
1. It is a user-oriented, human-centric methodology
That makes us empathize with the customer. Empathizing helps us see the challenges people face in their everyday life. The renowned HBS professor Clayton Christensen says that 95% of innovative products fail because companies do not look at products as customers do.
He says we should “crawl into the skin of your customer and go with her as she goes about her day, always asking the question as she does something: why did she do it that way?”.
By knowing this and developing a deep understanding of your customer, you (the members of the team) will develop empathy – a natural understanding of what it’s like to be in their shoes. This way, we can create something they will get excited about and actually pay to use.
2. No innovation is immediately profitable
We need to first invest in research, testing, production or development, and marketing before we get to the profit. Design Thinking has been proven to achieve more than 300% calculated ROI, it constantly cuts costs and increases profitability.
That is because the motto of this methodology is to “fail quickly”. Failing quickly means failing without spending tons of money. Failing on a low scale, and changing things before large investments need to be made.
Design Thinking is a non-linear process that loops the iteration process (testing and going back to the drawing board). This has saved my clients a lot of money and time and has also diminished their risk of failure in the long run.
3. Scalability also requires innovation
I recently saw this post by Dr. Mike Hoogveld where he said that “the optimal value creation for customers starts with putting the customer first by means of an outside-in approach for everything the organization does”.
The whole organizational structure and systems should be integrally aligned with the customer’s needs, and never the other way around. That means, everything you do, every day, every decision you make, should be aligned with customer needs.
With Design Thinking, we also learn to communicate, manage, and make decisions in a customer-centric way. This is where DT’s true power lies. It transforms not only what we work on, but the way we work as well.
Conclusion – Future proof innovation
As you can see, Design thinking is not only an ideology but a practical approach that also shifts the mindset of the team. Future-proofing innovation should offer the best customer experience and the only way to achieve that is by having every team member on board and moving toward that same goal.
Read more about the corporate innovation process in my Corporate Innovation Manual, It covers more detailed advice on choosing the right innovation process for your company, ways to evaluate your innovation, and how to commercialize your creation. And if you are looking to perfect or launch a new innovation yourself, reach out to us for a personal consultation.