Why do so many farmers' markets fail
LEAD Innovation Blog
Studies show that around 60 to 80% of new products fail. The exact number of unreported cases is difficult to determine, because who likes to talk about their innovation flops.
But why do so many innovations fail? Yes, the statement is not entirely correct. Because an innovation is a successful innovation. So it's about the way there. Why do so many ideas, innovation projects and new products fail?
Knowing the reasons is valuable knowledge, especially if you know your company's internal success killer. Because anyone who knows the causes of the failure of innovations can set the right measures and accents in innovation management in order to considerably increase the chances of success of innovations.
Success is decided in the company
A new product can fail on the market because it does not create any real value and therefore does not find any customers. Or a new product can fail internally because development, implementation and marketing are not working properly. No matter how good and perfect an idea is, if the innovation process doesn't work, it will die. On the other hand, an idea can only be mediocre, but if the implementation and marketing is carried out with full commitment and passion, it can become a great innovation.
The bottom line: For the most part, the company decides whether an idea will be successful or not.
Here is a compilation of four main reasons, based on the Inknowaktion mini-study, why new ideas and new products fail:
Reason 1: wrong decisions
The wrong course is often set by management in innovation projects or when selecting ideas. Wrong decisions can affect the prioritization of ideas, product strategies for new products, the selection of variants in development, etc.
The reasons behind this are:
- Missing corporate and innovation strategy as a basis for decision-making.
- Insufficient or inadequate information as a basis for the decision.
But it also happens that management's own convictions dominate instead of facts, which means that gut decisions are made that later turn out to be wrong.
Reason 2: low importance of innovation
Despite a strong anchoring of innovation in the strategy papers and the articulated importance of innovation by management, it can look very different in everyday life: Day-to-day business comes first. And innovation remains lip service.
If day-to-day business issues arise on the management agenda, they have priority. Because with those you earn the money today and they have to be solved as quickly as possible. But how do you earn your money tomorrow? Unfortunately, urgency takes precedence over importance.
If there is no commitment from management, it runs through all levels of the organization. Innovation has a low priority because everyone takes care of the day-to-day business first.
In addition, innovation is something “new” and brings with it changes that many cannot identify with or that trigger uncertainty and resistance.
Furthermore, employees are rewarded according to annual and sales targets, as there is not much room for innovation. And another problem is that innovation tasks are not always included in the job descriptions and that it is therefore perceived as an additional effort for some employees.
The lack of commitment and the lack of support for innovations are certainly a main reason for the failure of innovations. As a result, many resources are lost due to frictional losses and innovation tasks are not worked out in the required quality. The main cause comes from above and it is also reflected on the culture of innovation.
Reason 3: Lack of market orientation
The lack of orientation towards the market and customer needs is another main reason why new products fail on the market. The product does not offer real and convincing customer value or does not differentiate itself from existing products.
Only those who really know the customer and user, their processes and wishes can develop products that inspire and stand out from the competition in a pioneering way. Since the run around Design Thinking, it has become more and more clear that innovative products can only be created with a comprehensive understanding of the customer.
The lack of market and customer orientation has multiple causes:
- Too much focus on technology.
- Too little time for customer analysis and the development of the specifications. On the one hand you don't want to take the costs in hand (e.g. for travel expenses to the customer) and on the other hand you don't want to lose any time and start developing.
- No access to customers and customer information because, for example, sales do not want their customers to be "harassed" or because of the conflicting areas of technology and sales.
- You think you know your customers. You rely on your own assumptions and the information available. Unfortunately, the latent and often actual needs are not known. You only have the information that you get from the customer in the sales pitch. These are the same ones that the competition receives. You can't develop unique products with it. You need a deep understanding of the needs and tasks of users and customers.
Investing in extensive customer and needs research is a key success factor for innovations. The more you know about your target groups, the better products you can develop and do not have to rely on half-true assumptions.
Reason 4: inert structures
The larger the organization, the slower the processes often become. Slow processes with long decision-making cycles can be a death sentence for innovations. In addition, there are often interface and communication problems. All of this has a negative effect on the quality and efficiency of innovation projects. This is becoming more and more apparent when you see how quickly start-ups can innovate.
If you take a closer look at start-ups, it becomes clear how the organization itself influences success.
- Due to their size, they are less complex and therefore more agile. You have no sluggish hierarchies and bureaucracies and can therefore act faster.
- They are well interlinked and networked internally, everyone knows everyone. This improves collaboration and speeds up processes.
- There are also cultural factors such as greater openness, willingness to take risks and willingness to change.
Conclusion: 4 reasons why innovations fail
There are many reasons why innovation projects or new products fail on the market. Most of the time, a failure is not related to the quality of an idea itself, but to its implementation, ergo it has internal, organizational causes.
This is where corporate management and innovation management have to start. You have to become aware of your own weaknesses and take appropriate measures. Because if an innovation is constantly confronted with hurdles, every euro of innovation invested is a waste.
On the other hand, if management creates framework conditions that promote and strengthen innovations, companies with the same resources can achieve significantly higher innovation successes and thus additional income.
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