How Neglecting Innovation Impacts NPD, IPR and Growth

I’ve been neglecting my blog lately, as a result of some intensive consultancy projects and some personal time. Now that I’m back, refreshed and raring to go, the first thing that struck me was the analogy to innovation itself.  It’s easy for companies to be distracted and take the eye off innovation.  In many cases, it does indeed amount to neglect.

One of the first things to suffer is creativity. Far too often, idea generation is seen as something special, an extra initiative that is not part of business as usual. It doesn’t feature as a priority and new ideas struggle to get air time. Idea generation is only used when there is an emergency or a competitive threat, and ideas are needed in order to respond.  This is the equivalent of phoning round for insurance quotes when the house is on fire.

Options for longer term growth don’t get anywhere near a place on the agenda. When innovation as a whole is neglected, usually it is only the short term, easy to execute and quick to deliver projects that stand any kind of chance.

Innovation projects are caught in a morass where decisions from top management are suspended because their time is used on other issues; but at the same time nothing can proceed without approval. Then the innovation teams are criticised when innovation either isn’t launched or fails afterwards.

On the research and technology side, patent applications don’t happen, nothing new moves across to development. There are no options for technology push with the potential to generate long-term competitive advantage, through superior products protected by Intellectual Property Rights (IPR)

What do customers think? Well, we know already so it’s just a waste of time and money asking them again.

The project portfolio (if there is one) is just a list, dominated by “pet” projects and zombies.  Resources are spread too thinly, so nothing gets done well.  Metrics (if they exist) measure the cost of everything and the value of nothing.

Too much of the agenda is devoted to what the competition is doing and trying to copy it, not on what the company can do to make its own product line distinctive and dominant.  The range becomes dominated by “me-too” products being sold on price not benefit, ultimately leading to an erosion of profit margin and growth. The emphasis is on the reactive, not the proactive. The market shapes the company, there is no chance to do it the other way around.

This doesn’t happen overnight, so complacency often accompanies neglect. It takes time for the results to appear, so it may be some time before the alarm bells ring.

There may be occasions when innovation isn’t appropriate, for example when a strategic decision is taking to de-prioritise a business category. There’s nothing wrong with this, but a lack of innovation should be a conscious decision rather than one of neglect.

The whole point about innovation is that it provides new sources of growth and refreshes what is already the core of the business. Quite simply, when it is neglected, growth slows or doesn’t happen; the company becomes more vulnerable to competitive threat; and the threat of disappearance is increased.

Do you recognise any of this?

image credit: bigstockphoto.com

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Kevin McFarthing runs the Innovation Fixer consultancy, helping companies to improve the output and efficiency of their innovation, and to implement Open Innovation. He spent 17 years with Reckitt Benckiser in innovation leadership positions and also has experience in life sciences. Follow @InnovationFixer