17
Becoming proficient at both current business and future exploration is no small
feat, though. It has only been achieved by a few companies. Recent work by Haan
et al. suggests that no more than 2% of companies achieve it.
11
Among the features
shared by such a select group of companies, the following stand out: excellence at
both exploration and exploitation; retaining an “outside-in” focus even when successful; embracing necessary disruptions – even if painful; and having in place a
clear model for renewal.
1.8 Innovation and Failure
12
Most innovations launched to the market by companies fall short of revenue expectations. Approximately 80–85% of all fast-moving-consumer-good launches fail,
according to 2018 research
13
by Nielsen, the global measurement and data analytics
firm. Though there is no equivalent data known on nonprofit organization innovations, it is unlikely that the opposite would apply to their goods and services.
This points to substantial shortcomings in the ability to match value propositions
with the actual needs of customers and users. While the technology itself can certainly go wrong in the design process, the difficulty of designing the right business
models – vs. simply the right technology – remains one of the most challenging
components of innovation success.
How could it be that the vast majority of commercial and social innovations fail –
falling short of their profit, adoption, and/or impact goals?
How can we better articulate the social, emotional, and economic gains brought
about by innovations so that their adoption rates improve?
Why are people so reluctant to embrace change?
Why do most organizations, both private and public, struggle in their innovation
efforts?
These are critical questions that every individual and organization genuinely
interested in embracing innovation need to consider.
In the agricultural realm, the story of coffee illustrates how innovation can lead
to tremendous success despite failure. Today, coffee
14
is a regular part of the lives of
11 https://bcghendersoninstitute.com/the-2-company-b9e5dc587b2b
[verified
on
October
11
th , 2019].
12 Throughout this chapter, we will refer to failure as the inability to reach expected sales, profit
targets, adoption, or market penetration of innovations launched to the market. Though it is a rather
narrow definition, it is a pragmatic, results-driven one and consistent with the book #x2019;s views
on innovation.
13 https://www.nielsen.com/wp-content/uploads/sites/3/2019/04/setting-the-record-straight-common-causes-of-innovation-failure-1.pdf [verified on October 11
th
, 2019].
14 The late Calestous Juma, formerly of Harvard University, discusses the history of coffee in his
book Innovation and its Enemies (2017), shedding light on the tensions and complex interactions
arising among innovations, preexisting products, cultural landscapes, and social fabrics.
1 The Quest for Innovation: Addressing User Needs and Value Creation
Becoming proficient at both current business and future exploration is no small
feat, though. It has only been achieved by a few companies. Recent work by Haan
et al. suggests that no more than 2% of companies achieve it.
11
Among the features
shared by such a select group of companies, the following stand out: excellence at
both exploration and exploitation; retaining an “outside-in” focus even when successful; embracing necessary disruptions – even if painful; and having in place a
clear model for renewal.
1.8 Innovation and Failure
12
Most innovations launched to the market by companies fall short of revenue expectations. Approximately 80–85% of all fast-moving-consumer-good launches fail,
according to 2018 research
13
by Nielsen, the global measurement and data analytics
firm. Though there is no equivalent data known on nonprofit organization innovations, it is unlikely that the opposite would apply to their goods and services.
This points to substantial shortcomings in the ability to match value propositions
with the actual needs of customers and users. While the technology itself can certainly go wrong in the design process, the difficulty of designing the right business
models – vs. simply the right technology – remains one of the most challenging
components of innovation success.
How could it be that the vast majority of commercial and social innovations fail –
falling short of their profit, adoption, and/or impact goals?
How can we better articulate the social, emotional, and economic gains brought
about by innovations so that their adoption rates improve?
Why are people so reluctant to embrace change?
Why do most organizations, both private and public, struggle in their innovation
efforts?
These are critical questions that every individual and organization genuinely
interested in embracing innovation need to consider.
In the agricultural realm, the story of coffee illustrates how innovation can lead
to tremendous success despite failure. Today, coffee
14
is a regular part of the lives of
11 https://bcghendersoninstitute.com/the-2-company-b9e5dc587b2b
[verified
on
October
11
th , 2019].
12 Throughout this chapter, we will refer to failure as the inability to reach expected sales, profit
targets, adoption, or market penetration of innovations launched to the market. Though it is a rather
narrow definition, it is a pragmatic, results-driven one and consistent with the book #x2019;s views
on innovation.
13 https://www.nielsen.com/wp-content/uploads/sites/3/2019/04/setting-the-record-straight-common-causes-of-innovation-failure-1.pdf [verified on October 11
th
, 2019].
14 The late Calestous Juma, formerly of Harvard University, discusses the history of coffee in his
book Innovation and its Enemies (2017), shedding light on the tensions and complex interactions
arising among innovations, preexisting products, cultural landscapes, and social fabrics.
1 The Quest for Innovation: Addressing User Needs and Value Creation