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Why Does Innovation Fail?

Even with the very best of intentions, innovation doesn’t thrive. Here we look at why.

Barrie Dowsett

Chief Executive Officer


5 minute read

No innovation, no business

Innovation is vital to a company’s long term success. Not only does it bring about fresh new product ideas and new technologies, it also helps maintain a competitive edge. But despite their best efforts, many companies still do not achieve the innovation results they want.

Here we look at some of the main ways innovation can fall flat.

1. Your organisation isn’t ready to innovate

Innovation is about adjusting the way your company works creatively, and for this you need buy-in from the teams. Right from the start, management needs to communicate what they’re trying to achieve and why.

It’s also important to motivate people and get them excited in order for a culture of innovation to thrive. Encourage the organisation to work together, building knowledge and collaborating to scale up the company’s innovation capabilities. 

2. A fear of taking a risk

Innovative activities do carry with them an element of financial and reputational risk, and of course there’s no guarantee it’ll even be a success at all. But the only way to learn is by making mistakes, and staff should be encouraged to bring forward and try out new ideas without the worry of reprisals. Structures which are too corporate or too rigid aren’t exactly conducive to creativity, to make sure your staff feel inclined to give their ideas a go.

3. Innovation occurs almost by accident

Hopefully an innovative project is successful and brings about long term positive results for the company. But this should be down to judgement, not luck, as much as possible. That is to say, results should also be predictable and not accidental. Innovation where something is pretty much discovered by accident may bring with it a short term financial boost for example, but it doesn’t add up to a wider culture of innovation. Indeed, it can in fact point to poor innovation management.

So that innovation is sustainable and efficient, it needs to be managed properly. It is the responsibility of the management team to set up a process, throw resources at it and track the results. Progressive innovation management in this way is much more likely to bring about further improved results longer term with other projects.

4. A distinct lack of appetite

Companies that are truly fired up about maintaining a culture of innovation will put something about it in their job descriptions. With employees busy in their day to day roles, many aren’t inclined to take on new, innovative work if it isn’t printed in black and white that they must. This can lead to a sense of innovation being ‘someone’s else’s job’ or ‘above my pay grade’ which can be detrimental to the company overall.

5. Goals are not set, tracked and shared

Ask yourself: How are employees meant to know what results are expected from any new innovation projects if you haven’t set any goals? What are the aims and timescales of your work and how will you know when they’ve been achieved?

Without actively measuring and monitoring innovative activities it’s easy for people to lose interest. Projects can’t simply go on indefinitely, and if further funding is required like R&D Grants (and R&D Tax Credits) then appropriate records need to have been kept.

6. Lack of customer feedback

For innovation to be successful you need to actually be solving real world problems. It’s all too easy to get caught up in the excitement of designing and testing, but how do you know it’s actually going to be useful to customers at the other end?

Customer feedback at every stage of innovation is vital in helping prevent failure. Yes it’s not easy to stop strangers on the street and ask for feedback, especially if there’s a chance the idea is terrible. But without surveys, user testing and taking on board their comments, how will you know you’re actually providing a solution to something? How will you recognise your target audience, and set a price point?

7. You put all your eggs in one basket

It’s tempting to go for innovation that is noisy and disruptive, but these types of projects can fizzle out quickly. Likewise, if you only innovate very slowly then your brand risks being left behind.

A good option is something half way, where your innovation portfolio contains both short and long-term goals. This type of balanced portfolio means you can deliver results regularly whilst also keeping something more disruptive on the back burner.

Don’t forget that successful milestones create trustworthiness in your brand and a more sustainable culture of innovation. Therefore incremental innovation is essential if the company is to remain adaptable and competitive.

Innovation can be expensive. But R&D Tax Credits can drastically bring down the cost.

Companies located in Ireland that have created new products, processes, systems, devices, services or materials (or improved existing ones) may well be eligible for Revenue-backed R&D Tax Credits.

Regardless of whether the company has made a profit or a loss, R&D Tax Credits may still be on the horizon - even if the project failed. This is because R&D Tax Credits are about addressing a technical or scientific uncertainty - the “journey of discovery” if you like - and not the end result.

It's a highly valuable scheme too. Eligible R&D expenditure will attract a 25% Tax Credit for use against a company’s Corporation Tax bill, provided in addition to the standard tax deduction rate of 12.5%. So companies undertaking applicable R&D can receive a substantial Revenue refund of €37.50 per €100 of R&D costs.

The types of projects and claimable costs vary hugely, and the resulting funds can be spent on anything - including further R&D activities.

Discover more now on our R&D Tax Credits page.

Looking to make a claim? Get in touch

Our Dublin-based team has helped hundreds of Irish companies claim the R&D Tax Credits they’re owed. We’re proud of our 100% success rate, and our R&D tax experts work hard to make the whole application process simple and stress-free.

Send us a message or call us today on +353 1 566 2001 for advice or to start your claim.

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