Showing posts with label innovation failure. Show all posts
Showing posts with label innovation failure. Show all posts

Tuesday, March 19, 2013

Innovation Diffusion of Successful and Unsuccessful Projects

Innovation is often a catalyst that spreads change and adaptation through the industries it touches. Like a virus it moves from one industry to the next helping to make the economic system stronger. Because early adaptors of innovation create market advantages (Greve, 2009) such strategic incorporations are sought, adjusted and capitalized on. Great ideas create great interest and spread quickly even when new innovations are secreted by the industries that develop them. 

Most people understand the desire to understand and adopt new innovations when they are beneficial but few understand what happens when such innovations fail. Researchers know that such failure is important knowledge because it can either contribute to the next great success or provide key potholes to avoid when developing their own products or services. In either case success and failure both have a beneficial impact on the development of the economic market. 

When failures are apparent organizations often try and hide this failure. Such information provides insight into organizations approaches and strategic thinking. Failed projects also indicate lost revenue and the market capabilities of the firm. Yet even with no formal channel for innovative failure announcements the informal channels are used to disseminate information (Singh, 2005). What to do with that information is a key strategy an organization can consider. 

Henrich Greve (2011) investigates the innovative abilities of the ferry industry in Singapore to shed additional light on how disappointing innovations move within the local market. The work further helps industry leaders to understand how some firms reject innovation failures and some firms accept such failures to incorporate into their operations. After review and study the report comes to the following conclusions:

-Diffusion processes are sensitive outcomes. The acceptance or denials of innovations are based upon what it does for the firm. 

-When innovation has a positive result the findings are often kept secret to retard diffusion to other organizations. 

-When innovation fails there is less incentive to hide such information from competitors. However, organizations still attempt to hide such information even though it leaks out through informal channels in the market. 

-Theoretical models on risk-aversive decision making are less accurate than models on decision-making uncertainty.


Failure and success are flip sides of the same coin. Even when innovations fail organizations would do well to attempt to collect this information in an effort to incorporate such findings within their own innovative processes. At times such failures can lead to higher levels of development and greater understanding at less cost to the researching organizations. No matter how tightly an organization tries to keep both successful and unsuccessful innovations secret the information will make its way through informal networks and impact the market. Competitors actively seek this information in order to incorporate and influence their markets for positive results. 

Greve, H. (2011). Fast and expensive: the diffusion of a disappointing innovation. Strategic Management Journal, 32.
Greve, H. (2009). Bigger and safer: the diffusion of competitive advantage. Strategic Management Journal, 30 (1). 

Singh, J. (2005). Collaborative networks as determinants of knowledge diffusion patterns. Management Science, 51.