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Why do so many innovation initiatives fail? Geoffrey Moore, author of the new book Dealing With Darwin: How Great Companies Innovate at Every Phase of Their Evolution, has some fresh insights into this ongoing challenge.
For innovation to be successful, according to Moore, it must achieve breakthrough differentiation from competing products or services. What often prevents this from happening is lack of corporate alignment. To make his point, he uses the example of vector addition - where arrows are used to represent the direction and magnitude of a given force. When all the arrows are aligned the same direction, the force is magnified. On the other hand, when the arrows point in different directions, the force is dissipated. The same thing holds true in corporate innovation initiatives.
"To achieve breakaway differentiation requires a highly coordinated effort across the entire enterprise… At the end of the day, every function in the corporation has to realign its priorities in order to amplify the innovation to breakaway status. Anything less is simply too easy for competitors to neutralize."
"The failure - and this is a failure of the leadership, not of the rank and file - lies in the failure to prioritize one line of innovation above all others. If management does not take a position on innovation strategy, the company's innovations will continue to bubble up but they will not be aligned. If all are brought to market… none will achieve breakaway status."
Unfortunately, we see this scenario unfold all too often, across nearly every industry. Achieving this type of corporate alignment is easy to talk about, but incredibly hard to put into practice. The problem is exacerbated by several factors, including the diminishing tenures of corporate CEOs, who aren't in the corner office long enough to mobilize the troops to achieve this type of alignment. Also, the large number of people in big companies makes achieving corporate alignment the equivalent of turning an oil tanker – it takes a long time!
Moore’s theory may help to explain why breakaway innovations often come out of small, entrepreneurial companies. Achieving corporate alignment when you have a staff of 10 is much easier to do than when you have 10,000 or 100,000 employees. Also, small companies are usually focused around bringing one breakthrough product to market, where large companies tend to have many innovation initiatives, which are often out of alignment with each other. In addition, Moore points out that reengineering, continuous improvement and other such efforts often free up an enormous amount of cash which, in an ideal world, could be invested in the organization’s innovation initiatives. But this seldom happens. Instead, it’s used to make the bottom line look good for the next quarterly report. |
