Innovation simply entails the discovery and deployment of new things which have market or economic value. Innovation is often differentiated from invention due to the former’s ability to generate economic profits and bring about a change or disturbance in the market. The idea of innovation can be expressed as Invention + Commercialization. The need to innovate can be inspired internally such as having a goal to lead a change in the market or externally such as having to adapt to changes in the market.
Profits and technology are words that appear frequently in the discourse of innovation. However, beyond profit-making, and deployment of new technology, attention to other factors such as the social values and emotions of the target audience determine how sustainable an innovation is in the market. Thus, matching value propositions with customers’ actual needs is often noted as a pre-condition for a business to continue to be relevant in the market.
While technology is inevitably an enabler and driver of innovation, the idea that innovation must always centre on technology is trite. There have been instances where technology has failed in the design process. Therefore, designing the right business model to complement the right technology is very critical to innovation success.
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It is also important to note that profiting from innovation is not a rule cast in stone. At least one is required to brace for temporary defeat or loss in the short-term. Studies have shown that most innovations launched to the market fall short of revenue expectations. For instance, a 2018 study by data analytics firm, Nielsen, reveals about 80-85 percent of all fast-moving-consumer-good launches fail. Therefore, founders are often nudged to understand and embrace failure and loss as essential parts of innovation. Embracing innovation failure as a requisite experience for innovation success implies awareness of the risk-reward rule of innovation and this can have a positive outcome on one’s risk appetite.
The lessons and narratives of successful innovation are the same across industries and cultures or geographies:
”There is rarely successful innovation without a fair share of failure along the way. Every successful innovator deals with the frustration, pain, and anxiety associated with numerous setbacks’’ analysts revealed.
It is also observed that since innovations are oriented to challenge the status quo, much of the “tensions” around innovation develop from hidden feelings of insecurity or fear of crossing the line, not necessarily from the “potential benefits” or “pitfalls” of the innovation.
Thus, rather than avoiding failure outright, founders and business leaders are advised to embrace the idea of “clever failure”, which involves accepting to fail as often, cheaply, and early as possible in the innovation process, and also help their employees to brace for the same.
Resources:
The Innovation Revolution in Agriculture: A Road Map to Value Creation. Hugo Campo Editors