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Innnovation Advice

Symptoms of Poor Innovation Strategy

Updated: Jul 26, 2018

Historically, innovation has been perceived as a complex, time-consuming endeavor, or based on the genius of particular individuals.

Historically, innovation has been perceived as a complex, time-consuming endeavor, or based on the genius of particular individuals. Research organizations may have been disconnected from the business objectives of the company. Engineers, many with PhDs, have deep knowledge of the technology but don’t necessarily have the business-sense to make money with their creative ideas. Everyone can remember at least one highly visible project with a significant investment that failed, resulting in no revenues and no return.

It’s commonly accepted that innovation is necessary to sustain a company, especially to achieve growth beyond the initial market and product portfolio. “Innovate or Die” is the mantra that companies believe to be true because it plays out over and over in front of us. Google, IBM, Apple, Siemens and many others have provided the guidance that innovation is a culture and failure should be rewarded. Failing fast on many small projects is touted as the “right way” to innovate.

The problem is a large majority of companies don’t have the margins to make big bets hoping for a payoff or give everyone 10% of their time to work on new projects. Most companies are resource constrained, consensus driven and worried about fulfilling commitments to investors. We have all seen once successful organizations reach their useful limits, die or be acquired. Some were big names that had the money and time to invest, but didn’t get to the next level of growth. Blockbuster, Kmart, Borders Books, Nokia and others had decreasing revenues, shrinking margins and unhappy investors.

If a company isn’t innovating then it’s dying. Typically, companies have a prolonged downward trend, it's not as quick as it sometimes seems to the outsider. There must be early indicators that innovation will not sufficiently sustain your company as you look to the future. If you are in agreement, so far, then what are the symptoms of a poor innovation strategy?

Financial Management

· Intense focus on short term revenues and OPEX controls, reducing ‘risky’ investment · Projected revenue curve is flattening, rate of growth is decreasing · Margins shrinking due to price pressure · Development projects do not produce an acceptable return · Unable to meet shareholder / analysts expectations · Analyst downgrading the company stock due to the lack of a compelling future direction · Falling stock price primarily due to institutional investor sell off


· Increased competition from producers in low cost regions · Dismissed competitors in secondary and tertiary markets · Concerned about start ups enticing your customers · Development of new product features does not produce competitive advantage

Product Management

· Delay adapting to new technologies, development horizon is too short, late to market · Future development projects are misaligned with business objectives · Short product development roadmaps with incremental change · Loss of confidence in the organization to produce value through innovation · Innovation methodology changes frequently – lack of top-down commitment to innovation

Research and Development

· Skunk works projects are rampant, undefined, not funded - lost productivity on funded projects · Too many or too few development opportunities based on the current level of investment · Rate of new patents per engineer is falling · Attrition rate of technical experts is increasing and recruiting takes longer than before

If your company is experiencing these symptoms, are you expecting the company to fail? Maybe there are slight glimmers of hope somewhere in the organization. More personally, is your career and family finances connected to the success or failure of the organization? Understanding the reality is the first step to implementing a solution.

Now is the time to start turning things around by focusing on innovation as part of your corporate strategy. Seek innovation experts that have solved these problems across diversified markets and products. The commitment and investment in innovation opens more possibilities and sustains the company into the future. The counterpoint, not recognizing a slow and dying company soon enough is the real cost of not innovating.


N³ Innovation offers business-driven innovation which is a fundamentally new model for anticipating future market realities, identifying innovation opportunities, and accessing new sources of revenue. We have helped companies identify new business opportunities, typically with revenue potential over $250M. Contact us to learn more.


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