80% of Innovation Projects Fail – What Should We Do?


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I had a recent discussion with a corporate innovation leader who would like to raise their innovation success rate. A staggering 80% of their projects fail. This sounds high, but I think this is very common for many companies and industries.

Whether it is common or not, the innovation failure rate is still too high and companies definitely have room for improvement.

Let’s have a discussion on how to do this. It is a broad topic, but here you get my starters.

First, I would say argue that companies need to apply some kind of pattern recognition mechanism in order to better understand why their innovation projects fail. Doblin, a consultancy company, touches on this in a paper from 2005; On Building an Innovation Competence. In particular, I like this snippet:

“Another key to innovation effectiveness is to track every concept with exceptional diligence and care. Doblin does this through a special digital dashboard, a secure, web-based, innovation tracking system. While we are not fans of central control of innovation, we are big fans of central monitoring, so that somebody knows what the innovation “hit rates” are—which projects succeed and which do not. Collectively these actions will move you to a handful of clear, compelling, valuable and strategic innovation candidates.”

Besides pattern recognition, I would advice companies to look into the very tricky challenge of stopping projects at the right time in order to be able to allocate resources to new or more promising existing projects. They need to find ways of addressing tough questions such as:

When is the right time to stop a project? How do you decide when to stop projects?

Who should make this decision? Should it be experts, executives only or a broader group? Should the decision be kept internally or should you ask external partners or even an external crowd?

How do you capture the insights already gained in the project so that you can use this for other projects? How can you hard-freeze a project without creating a “living dead” project that continues to drain valuable resources?

My starters. The topic is open for discussion.

Republished with author's permission from original post.

Stefan Lindegaard
Stefan is an author, speaker, facilitator and consultant focusing on open innovation, social media tools and intrapreneurship.


  1. Since innovation and failure are so closely intertwined, your 20% number did not alarm me, but you framed the discussion in an interesting way. Had you titled the blog “How to Achieve a 20% or Higher Innovation Success Rate,” people might stop in their tracks. In some industries, a 20% success rate would be something near nirvana.

    The difficulty is in defining ‘failure’ and ‘success.’ There are no universal standards, so in similar situations, I like to step back and get clarity. We run into the same things in sales and in IT, where a woefully small percentage of projects are considered ‘successful.’ Just being ‘on time and on budget’ doesn’t cut it if it doesn’t achieve the targeted internal rate of return. And, as any red-blooded CFO knows, there’s plenty of SWAG in that calculation. Many times, the ‘successful’ or ‘unsuccessful’ badges are assigned for political reasons. There’s far less empiricism to the assessments than people are willing to admit.

    1. companies cannot be successful without sustainable, ongoing innovation and improvement,
    2. failure is an expected outcome
    3. great companies have developed ways to manage innovation and to improve the likelihood of achieving targeted financial returns.

    Above all, innovation success must be congruent with an organization’s capacity for risk, or it will fail. Too much success might mean that too few intelligent risks were taken, and too little exposes poor vetting of project choices. Either outcome could be emblematic of poor risk management, an issue that would be on most CFO’s radars.

  2. What should we do?

    Celebrate! Apply for awards! Write a book!

    20% success on innovation “projects” seems high to me. Except I’m not sure what a “project” is. Or as Andy said, what “success” looks like.

    For incremental improvements, 20% success may be very low. Can’t every product or process be improved just a little bit?

    On the other hand, for breakthrough innovations, maybe 1% would be a fantastic success rate if it was truly industry changing.

    It seems to me that the trick is to avoid wasting time on ideas that will not turn into value-generating innovations. So, a strong process to review, resource good ideas and kill bad ones quickly seems essential.

  3. One of the best ways to ‘succeed’ with innovation is to place more small bets. A|B testing and iteration are the allies of innovation. Like previous comments, the definition of failure is relative to the goal – whether creating a new product, service or marketing campaign, taking small bites at the apple gives the business a better chance to mitigate losses or capitalize on successes.


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