Around 91% of new product ideas fail. New ideas are actually very difficult to come across. The failure of new products is well documented: for example, the retail and grocery sector sees an 85% failure of products in the first year. The computer games industry sees around 50% of its sales generated by only 10% of releases.
The failure rate in the music industry is spectacular, with approximately 80-90% of new releases being duds. In the magazine publishing industry, a massive 80% of new publications fail to last more than 12 issues, and book publishing is a notoriously difficult nut to crack where only a tiny proportion of new releases generate any kind of profit.
Just look at confectionary manufacturers and the way they incessantly bring out bigger/smaller/special edition versions of 60-year-old snacks. This tired old formula has now become the template of product and service development in industries right across the board. There is, of course, one fundamental flaw with this process: the vast majority of things created by it fail.
Look at some of the biggest and most successful businesses in the world: General Electric. Apple. DuPont. Procter & Gamble. Visa. Linux. What makes them stand out? They have great products, great people and great leaders. But if you scratch the surface there is a another reason for their success: innovation.
There have also been spectacular examples of public sector innovation: child trust funds, London’s congestion charge, direct payments for social care users. New services have been developed (e.g. Diagnostic and Treatment Centres, LearnDirect or Surestart) or fundamentally new ways of organising or delivering services (online tax returns, distance learning, day surgery instead of in-patient surgery).
Innovation is a much used expression but often it is simply being applied as a general term encompassing any ‘change’ that is being implemented or considered. Implementing procedures or systems borrowed from others is not innovation even though it may be the dissemination of good practice.
Many people have experience of updating systems and procedures to meet changes in the environment when a fresh look at the whole picture reveals that the system or procedure is actually no longer required. Well developed systems and procedures keep staff informed and enable the provision of the high level of services that are demanded.
But, the very systems and procedures that keep services on track can also be responsible for stifling the creativity that brings about real innovation. In an environment so heavily systemised, innovation needs rigorous support if it is to survive.
In a world full of procedures, innovation is best seen as an event rather than a process. Processes are used to implement innovation but are separate and distinct from it. It is easy to confuse the two and when this happens what starts out as innovation becomes just another routine.
Real innovation and novel solutions come from creative thinking and not logical thinking. Creativity in routine work cannot be turned on and off like a tap. Innovation ‘events’ need to be one step removed from the issue in order to be truly innovative.
In the knowledge-driven economy, innovation has become central to achievement. With this growth in importance, organisations large and small have begun to re-evaluate their products, their services, even their corporate culture in the attempt to maintain their competitiveness in the global markets of today. The more forward-thinking organisations have recognised that only through such root and branch reform can they hope to survive in the face of increasing competition.