Why tech innovations fail in an organization

An innovation happens when there is a necessity, I would like to quote the famous saying of Plato “Necessity is the mother of invention”. When it comes to technology-related innovation, it’s not always necessary that a tech innovation has to succeed, most innovations fail.

But ever thought the reason behind the failure of such innovations?

Let us go through the list of failed tech innovations to understand what could be the reasons for their failures. When I was doing my graduation, I always wanted to have a Blackberry device, but things changed so quickly that Apple iPhone and Android device caught my attention.

During its peak period, Blackberry almost had 20% of the global market share in the smartphone sector, with 50 million units sold during 2011. But the demand for Blackberry smartphones declined drastically, and the company decided to stop manufacturing their phones. What caused such kind of a disaster?

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In this scenario, it’s due to low priority for innovation within the organization, Blackberry felt that Apple iPhone and the Android phones wouldn’t be the direct competitor since it didn’t cater to the business market. The other driving factor for the success of Apple iPhone and Android based devices due to the availability of better applications that Blackberry lagged.

Next, let me take you to the highest class of international single-seater auto racing known as Formula 1. Formula 1 is a multidisciplinary motorsport event with an annual turnover of 2 billion £.

Do innovations fail due to a lack of budget??

Formula 1 is all about technical excellence, engineers must work on developing the current race car and also the next season race car.  It involves a lot of innovation, consumes a lot of talent and resources. On an average, even a midsize team spends around 50 million £ as a budget for developing a decent F1 car.

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Mercedes F1, one of the most successful teams in the history of Formula1 champions since 2014 and continues to dominate. The reason for Mercedes success is innovation in designing a new car, and it requires a lot of investments. In 2019 the Mercedes F1 team spent around whopping 400 million $ for the development of their F1 cars. Caterham F1 team was active from 2009-2014 in Formula 1 circuit, they could not participate in the United States and Brazilian Grand Prix due to the shortage of funds. They had to raise funds through crowdfunding for their final Grand Prix at Abu Dhabi. For any tech innovation, the budget will be one of the crucial factors for its success and survival.

Image Credit: hackmyandroid.com

Is it important to understand the consumer needs?

Do you remember Google Nexus Q? Google Nexus Q introduced during 2012, an Android-based media hub that streams music, movies, and TV shows from YouTube. But will you pay an exorbitant cost of 700 $ for a Google Nexus Q set which includes speakers and cables? Google did conduct a consumer feedback survey, and consumers wanted better features for the given price tag. Another crucial factor for the failure of tech innovation is failing to understand the consumer needs.

Now, why would people wear glasses? You may state that they would wear glasses to improve their vision. But would you wear an expensive smart glass worth 1500 $ price tag? Yes, I am talking about Google glass, I wouldn’t wear a gadget on my body and claim that as a fashion statement. In this scenario, the tech innovation failed due to the wrong decision from management.

Google glass did make a presence at various high-end fashion week events. Such kind of management decision cannot be done based on insufficient information.

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Factors affecting innovations

Let us collate all the factors which we discussed earlier for the failure of tech innovations in an organization.

1) Low priority for innovation within the organization

2) Lack of Budget

3) Failing to understand the consumer needs.

4) Bad management decisions

For a successful tech or product innovation, the organization must have the following factors showcased in a simple intersection. The four circles shown in the figure below that would predict the success rate of innovation in the competitive market.

Success rate of innovation

Even the famous HBS Professor Clayton Christensen, an American academician who developed the famous theory of “disruptive innovation” stated that 95% of the product innovations fail. It’s not surprising to see some of the successful organizations in the world have also failed many times to succeed.  Even from the failed innovations, organizations must understand what went wrong and ensure that the particular mistake doesn’t repeat. Thus any organization working on product or tech innovation must always create a roadmap with the help of quantifiable data.