Managing Innovation, Design and Creativity

Chapter 25. Failure, risk and measurement in innovation

Many people might consider the Shared Appreciation Mortgage to be a failure because it did not stick in the marketplace. Interestingly though, both the Bank of Scotland and UBS Warburg rejected the idea that the development had been a failure. Both companies emphasised the valuable learning and insights that the experience had provided them with. While it is also true that neither organisation lost any money, which might have influenced their assessment on success or failure, such an attitude is characteristic of innovative organisations. Innovative organisations will not try to brush 'failures' under the carpet but will look at them carefully with the aim of extracting as much learning as possible. We will also explore other reasons why failure isn't always such a bad thing.

However, it is of course the aim of any organisation to minimise the failure rate and this is why I will start this chapter with taking a closer look at factors known to influence success or failure in new product (and service) introductions.

WHAT UNDERPINS SUCCESS AND CAUSES FAILURE?

Despite more than 30 years of research into the design and development process of products, the issues surrounding success and failure remain much the same. The importance of the early stages is constantly emphasised, because mistakes made at this point prove costly and time consuming later on. While there are some suggestions in the existing literature as to what can be done ...