Why Low-Risk Innovation Is Costly http://bit.ly/1bfPjyP
Companies are finding it hard to churn out “the next big thing.” Instead of the disruptive products, services and business models of yesteryear, innovations coming to market today are typically line extensions.
Our recent survey of more than 500 executives revealed that, while one in five (18 percent) respondents rate innovation as their top strategic priority and two-thirds depend strongly on innovation for their long-term strategy success, more than half feel they have a sluggish innovation process. Despite increasing commitment, funding and organizational accountability, many companies are disappointed by the returns they are deriving from their investments.
A cautious approach to innovation is understandable, given the relatively disappointing results. At the same time, however, it is a potentially perilous strategy. Enterprises that restrict themselves to incremental innovation, on the other hand, risk unknowingly entering a vicious cycle in which they lag ever farther behind.
By putting formal systems in place to manage innovation, companies can protect themselves from such risk. Enterprises able to successfully innovate at a breakthrough level are far more likely to dominate and prosper in the new markets they create. They can also position themselves to master change.