Why Good Ideas Fail (10 Reasons)

by | Thursday, April 19th, 2012

Eight years have passed since RE:INVENTION, inc. won “Honorable Mention – Best Small Business Blog” in the first annual MarketingSherpa Blog Awards. This week we’re back to blogging. We plan to use this new blog to take a stand on “innovate or perish.” To counter naysayers who suggest that most companies lack the capacity to be innovative.

Why? Well, because we believe that America is inherently innovative. That American business is innovative. That the world is innovative. And that with the right vision, tools, process, discipline, and commitment any company can be innovative.

That said, 33% of all new businesses fail in the first six months. Eight out of ten tank in the first three years. For every 7 new product ideas, 1.5 are launched, and only 1 succeeds.

Clearly there are big hurdles to idea implementation and commercializing innovation.

So, How Does Innovation Get Stymied? Why Do Good Ideas Fail? Here are 10 Reasons:

(1) Good Idea, Dime a Dozen

Companies — and human beings — are instinctively good at generating ideas. Ask any employee at your company; bet they can list three “creative ideas” off the top of their head.

Ideas are great (let’s not discount the value of creativity), but most companies don’t need to brainstorm more ideas. They need the discipline, process, support, metrics, and reward systems necessary to PRIORITIZE their best ideas and transform them into sustainable value. Be selective about the ideas you focus on.

(2) Good Idea, Execution Flaws

Guy Kawasaki once wrote, “Ideas are easy. Implementation is hard.” The world is littered with good ideas, thwarted by flaws in execution. Flaws in executing any reasonably good idea can be inadvertently overlooked and they can be fatal.

General Motors (GM) Chevy Volt hybrid was “courageously innovative in design” but the battery pack was technically dangerous (a few cars blew up in flames), GM failed to develop a public recharging station infrastructure, and the price shocked the average auto buyer. Yes – businesses are generally better off when they shorten the cycle from idea to tangible, marketable product in a repeatable, reliable way. But “go early, go ugly” (the basic premise of Lean Startup) can swiftly go south.

(3) Good Idea, Needs to Percolate

Some ideas percolate for years before being deemed viable for commercialization. Innovations can take time to take. The first email was sent in 1971, but it took 25 years to reach saturation. The first Xerox machine hit the market in 1949, 13 years after xerography was patented.

Blogger Tim Kastelle calls this the “long ‘X’ of innovation diffusion.” It’s a fallacy that innovative ideas spread quickly. The best use of an idea or invention is not always obvious at inception.

(4) Good Idea, Malicious Response to Mandatory Compliance

The best ideas have a compelling vision that resonates intellectually and emotionally. Goals, metrics, and strategy absent commitment, support, and engagement will fail.

Mandatory compliance rarely works. Those who feel powerless (or pissed off) may sabotage your idea or exact amusingly creative revenge. It’s one thing to “go live” with a product or service and another to inspire people to use it. Take Facebook timeline, SOPA, or IT failure within any given large corporation. Huge uphill battles.

People don’t resist change; people resist mandatory compliance. Invite them to contribute to decision making…make them feel like they are choosing for themselves. They’re more likely to be committed to the outcome.

Your outcomes will be infinitely more positive when you have influential customers, internal advocates, and other external champions who feel like they helped guide, support, and influence your vision and decisions. Inspire their willingness to wield their clout.

(5) Good Idea, Wrong or Misunderstood Target Audience

Should McDonald’s try to market to health nuts? We respectfully suggest “no” — BWOIT (big waste of investment and time). For years, Madison Avenue was locked into a misguided “Chronic Youth Syndrome.” Old Spice reaped huge benefits when they switched their target from men to women (surprisingly, their primary purchasers). Unilever’s Dove didn’t best the category until they abandoned their ageless Hollywood standard beauty message and started targeting “real people.”

Failure to understand and empathize with your target customer (and their needs) spells failure for any business idea. Engage people who value the utility of your idea, offer solutions, predict (and exceed) expectations, speak their language.

The onset of big data has the potential to perfect business models, improve business operations, and increase idea-to-market efficiency. Using big data to understand your customers holistically and create value for them will ultimately increase the likelihood of market commercialization success.

(6) Good Idea, No W-O-M

Diffusion of innovation (crossing the chasm to achieve a “tipping point”) is driven by persuasion and key stakeholder relationship building. Failure to build word of mouth buzz indicates a structural failure in your business model. Smart companies and successful ideas get people talking.

According to Andy Sernovitz, author of “Word of Mouth Marketing,” there are four basic rules to generating word of mouth: #1 be interesting, #2 make it easy, #3 make people happy, #4 earn trust and respect.

Want an idea to live to see the light of a new day? A happy, expressive employee or customer is your best advertisement. Mark Schaefer’s “Return on Influence” and Geoff Livingston’s “Marketing in the Round” echo the same sentiments. “It ain’t rocket science” — aim for delight and awe.

(7) Good Idea, No Internal Coherence

The world’s most innovative companies are highly invested in introspective alignment and making smart capability choices — understanding and optimizing effort, people, operations, and resources to develop and nurture ideas, to gain competitive advantage, to compete in a differentiated way.

Booz and Company research (June 2010) suggests that companies that demonstrate “strategic coherence” — those that begin with a candid assessment of their internal strengths, focus on building a narrow set of distinctive innovation capabilities, then align those distinctive capabilities with their corporate strategy — outperform the competition. 44% of companies whose innovation strategies are clearly aligned with business goals delivered 33% higher enterprise value growth. That’s significant. Bad business plans, the wrong organizational design, and false internal narratives (or unfounded opinions) all lead to lack of coherence.

(8) Good Idea, No Collaboration, Champion, or Partners

Collaboration — from within and with external partners — fuels innovation. GE Global Research participates in 300 research collaborations at any given time. A 2009 Duke University study funded by the National Science Foundation found that smaller companies, in particular, can dramatically increase their innovation competence through external collaboration — enabling them to even outperform their strongest and largest competitors. That same study suggests that collaboration can bolster big company reputation and reinforce what they already know.

Internal collaboration, leadership, and the right team are equally important. Ideas that lack a persistent, consistent, influential, and passionate internal innovation champion wither and die. Insights passed from creator to idea champion, department to department, vendor to vendor are influenced and modified along the way. Bad parents (and/or family relatives), bad child. Don’t hand good ideas off too early. Collaborate and inspire others to develop and raise them right.

(9) Good Idea, No Budget or Quick ROI

Simply put: underfunded ideas fail. Not 100% of the time, but often. Too often. Undercapitalization and lack of finances are some of the hardest innovation hurdles to overcome.

Innovation is inherently high risk and commercialization (the path to profitability) can be rocky and long. Financial constraints and opportunity costs can become a huge issue. Most companies want to make easy money, rather than wait for returns. As a result, startups are often unable to sustain good ideas and many industry giants are unwilling to do so.

When you evaluate and prioritize innovation projects based on short-term ROI you can miss out on riskier projects that offer world-changing impact in the long-term. If you’re creating an “innovation mechanism and opportunity engineering process checklist” with oversight guidelines to shepherd future projects, it’s important to evaluate future or latent human needs, long term competitive impact, and option creating investments that build capabilities and learning.

(10) Good Idea, Crappy Luck

Sometimes good ideas meet with crappy luck. Any combination of the above — force majeure — errors — systemic, intentional corruption — individual lapses in judgment — market rises and falls — can cause idea failure. That’s why you need to be resilient and vigilant when it comes to innovation and idea implementation.

Successful ideas are groomed by folks and companies that are both proactive and reactive — democratic and dictatorial — capable of evaluating history, accurately predicting or (even better) creating the future, and ultimately actualizing new, unexpected outcomes. Fate can be a cruel mistress but it can be guided, even manipulated.

The good news? Failure can light the path to success. And good ideas sometimes lose to better solutions. But in the end, innovation isn’t just about novelty or new ideas. Simplification, reinvention, leveraging under-utilized resources, and incremental, continuous improvements can produce innovative solutions. Successful companies manage incremental and bold, disruptive initiatives simultaneously.

Our goal on this blog, as we go forward, will be to highlight solutions from inspiring innovators. We hope you will join the conversation.


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