Home / Business / The Perils of Innovation & Opportunity

 

As the Leader of ServiceLive, I am often asked the same questions… Why does innovation fail in large companies?   I typically answer… because innovation fails in small, mid-size, and large companies.  What they really mean to ask is … Why does innovation fail in established companies?

It is a bit of a loaded question, but the failure usually stems from some of the same approaches.

The same people who got you where you are today; are the ones you are asking to innovate.  They are the very ones who are displaced by the innovation you want, the very ones rooted in tradition and the status quo, and the very ones who may lose their jobs due to the very innovation you are seeking.  Does this sound like a receipt for innovation success? Yet, time and time again this is the approach companies take.

The second reason is what I call the “Cash Cow” syndrome.  Why disrupt or innovate when we have this year nailed and my bonus and stock options are tied to the quarterly numbers?  The perceived cost, risk, and future benefits of innovation exceed the short-term cash benefit from innovation.  Many folks know they will be gone before the innovation sees the light of day.  I once had a client tell me they plan to retire in two years and they really do not want the aggravation associated with bring innovation into their department.  He said he would sign the contract in 18 months, just before his retirement.  Really?  Happens all the time, many people want to do just enough to keep their jobs and reduce the demands on their time.

The third reason is really a combination of the first two.  The wrong people, time horizons, alignment, and reward structures. Innovation is seen in simply one dimension.

And finally, innovation is just hard.   If you want to innovate you have to be willing to fail.  You have to have a culture where it is not just ok to fail, but smart failure is actually rewarded.  You need a culture of failing quickly, learning and making changes fast.  You need to be willing to appear foolish for long periods of time.   Innovation is not a department, it is not something done on a project bases.   Innovation is ingrained in your culture, in your reward systems, in everything you do.

As a small business you probably are not thinking in terms of innovation, but it is happening all around you.   It’s happening with social media, it’s happening with mobile, it’s happening with your technology and even your products.  Faucets now have auto on/off sensors, many devices are motion activated, garage door openers, cameras, thermostats, appliances and the like are connected to smart devices.   Equipment is sending maintenance requests with no human interaction; we can 3D print basic parts and tools, and much, much more.  At CES this year, I actually saw a TV built into the faucets in one of the hotel lobbies.  As a former Plumber, I chuckled at the device and was glad I did not have to repair that one!   I can see the call now, my faucet loses reception when it rains and drips when I watch channel 23!

In all seriousness, ServiceLive is at the fore front of innovation in the services industry today.  In fact, ServiceLive recently created a “Digital Handyman” skill for the new category of “Connected Home” and we announced our partnership with an industry titan.  The connecting of the traditional with the digital is an exciting emergence and we look to see innovation in the connected home on par with introduction of the computer.  A whole industry is emerging where a few years ago only a few folks even noticed.   We are excited about helping bring the future to life for our clients and service contractors and we would like to hear how you are innovating in your business.

Dennis Stemmle, President ServiceLive

  • Was this Helpful ?
  • (0)   (0)
 

About the author: Dennis Stemmle

 
 

5 Comments

  1. Great perspective and food for thought – thanks for sharing these pearls of wisdom.

  2. The “Cash Cow Syndrome” is indeed one of the top reasons why companies fail to innovate, and eventually fall into stagnation…
    Thanks for the insights in this post!

  3. Dennis, I believe innovation requires courage. Companies who hire good people often create processes that get in the way of innovation. Too often, we seek permission in business because it’s the safe thing to do because the fear of failing and that slows or limits innovation abilities. Work swiftly with partners or methods that wouldn’t traditionally work can summon confidence to pursue ideas.

  4. Thanks for sharing some very honest thoughts on why innovation fails in established companies. In reading your post, I am reminded of this quote:

    “It isn’t the incompetent who destroy an organization. The incompetent never get in a position to destroy it. It is those who achieved something and want to rest upon their achievements who are forever clogging things up.”
    — F. M. Young

    It really comes down to lead, follow, or get out of the way.

  5. The fast pace of technology development in the modern era has also had a huge impact on the need to innovate. In today’s world new technology pops up around every corner, some of which are completely new categories that create competition where none existed before… just look at what the iPod did for Apple. Innovation must be an integral part of company culture to help see the bends in the road and take the curve with the stability to stay in the race.

Leave a Comment

Your email address will not be published. Required fields are marked *