The Reason Why Corporate Innovation Is So Hard

Gijs van Wulfen

Innovation is a paradox for all of us. On the one hand you are well aware that you have to take new roads before you reach the end of the present dead end street. On the other hand it is incredibly risky. It takes a lot of time. And it takes a lot of resources. Research shows that only one out of seven innovation projects gets launched and is successful. So saying yes to innovation is a step into the unknown. It creates fear of failure, which causes fear to innovate, especially in big organisations where a conservative corporate culture prevails.

On average it takes 18 - 36 months to develop a new concept, which often will only be profitable 2-3 years after introduction. Stimulated by short-term targets managers in big corporates focus on 'the business of today'. As innovator you want them to shift money and resources to the business of tomorrow, which is really hard.

Now be honest now: "Do you want to invest your personal savings in a project with a 1 out of 7 chance that it will be successful?" Probably you won't, unless you have to. And that is the real reason why a lot of managers wait until not innovating is not an option anymore. We all are humans.

I like to quote the CEO of BMW AG, the German luxury car producer, Dr.-Ing. Norbert Reithofer. When asked why BMW started the risky E-car project with the BMWi-3 and i-8 he responded very honest: "Because doing nothing was even a bigger risk" [Autoweek 41-2013].

Big corporations have often a very clear mission statement with an emphasis on innovation, a very well organised innovation process and professional innovation departments. Shareholders, board and bosses will however only stick out their necks for innovation if doing nothing is a bigger risk. This is the main reason why corporate innovation is so hard in practice.

So you how can you break the status quo and create momentum for innovation? Make them nervous that doing nothing is indeed a big risk. How? Identify the key persons in your company and confront them personally with concrete reasons for change that will move them out of their comfort zone.

So how can you make your managers nervous?

• Take them to visit start-ups challenging your position.
• Invite a trend watcher to confront them how quick the world is changing.
• Visit ex-customers who just changed to a very innovative competitor.
• Take them to Tech Universities to see experiments with new technologies.
• Spam them with articles of new successful business models;
• Visit young customers and ask what they think of your brand and - products.

Your conservative managers will say yes to innovation as soon as they get the insight themselves that doing nothing is an even bigger risk.

Go for it! Good luck.