Misdirected innovation

There are four types of companies: (1) those that successfully innovate, (2) those who are sceptical of the concept and choose to just focus on managing existing operations, (3) those whose innovation efforts are unbalanced and mainly focused on system optimisation, and finally (4) those whose innovation efforts are misdirected.

It's #4 - misdirected innovation - that can often pose a serious, underlying problem.

[Here's the typical rollout]: Having invested substantial amounts of time, money and resources into the development of a commercial concept - the resulting product doesn't sell very well; results are disappointing and the project is labeled a 'waste of money'. There is a sense of shame that is associated with the venture and in many cases there is an unwritten rule that the unfortunate episode never gets spoken about again.

Misdirected innovation - investing into innovation projects that are mistimed and poorly-informed - can change the behaviour of an organisation, turning a once enthusiastic organisation into a more conservative one. And the memory of the pain that the misdirected innovation caused ensures that its conservative approach becomes doggedly sticky.

There is no getting away from the fact that innovation carries with it a degree of risk.

However, that risk can be better managed if innovation is nested in an ongoing practice of innovation, where projects are selected based on rigorous research, and failures are regarded as valuable learnings.

There are no successful companies that haven't taken a haircut now and again, but that should be an excuse to retreat from risk, but rather a jolly good reason to improve the approach to risk.