human resources

Why Companies Fail to Innovate

For many years now, America has been dealing with an innovation crisis among industries. These failures are well documented in the likes of Harvard Business ReviewForbes, and numerous investor presentations and filings. How big is the problem? Statistics indicate that greater than 90% failure rate and costing Fortune 500 firms well over $100 billion annually. Just imagine the cost across American business and across global economies. The numbers would be staggering.

There's much evidence for the failures and many purported solutions to the innovation dilemma. Though full of promises and potential to help, too often they fail to deliver. Let's face it, it's far easier to buy than build - and much less expensive. Consider Hollywood's appetite for sequels, big pharma's binge buying (Johnson & Johnson et al.), and how the companies once profiled in the former best-seller, Good to Great, have subsequently tanked. At the same time, mergers and acquisitions provide no guarantee of success. Again the annals of business are filled with many corporate flops. It's worth noting that some companies are multiple offenders - and they are far from alone in their failures.


In the face of challenges and known risks, organizations deploy armies of consultants, conduct executive strategy sessions, and often devote considerable resources to ensure success. Three related factors that prevent achievement can be summarized as poor communication, management, and employee engagement. One may as well have offices full of empty cubes to go along with the empty suits leading those organizations. Addressing these self-destructive behaviors is imperative, but you already knew that...

I'm talking about driving innovation: creativity, designing new realities and experiences for employees and customers alike, capitalizing on the white space and bringing new possibilities to the organizations and the market at-large. Can organizations do that with existing employees? Statistics demonstrate that they cannot. Otherwise, they would already be on that journey, right? So much for talent management...

How about the competition, are they innovating and creating a new reality in the marketplace? Surely a few are, but chances are they are presently invisible. HR and talent folks will never see them. Human capital and talent management processes and systems are designed to limit risk-exposure and subsequently limit upside-potential. Don't believe me? Consider the first business process in building any organization: Hiring. What percentage of people - especially those driving new innovation and revenues (e.g. sales, marketing, development) - are hired from outside of your industry? And somehow we've classified this job part of talent management?!?


No industry is safe from disruption - be it digital or otherwise - the call for innovation cuts across business and functions. Given budget constraints and the need to move quickly, this approach requires hiring employees and engaging partners who can bring innovation more rapidly. These are people who think differently. They understand context, people and technology combining them to innovate and achieve business impacts. The bottom-line is hiring and talent managers need to get outside of the industry bubble.

Focus on creativity and design thinking as knowledge, skills and abilities. Find and hire those individuals who evangelize and engage others in the process as leaders. Worry less about industry and titles and more about transformative business impact.

If you are unable to teach and develop industry knowledge & nuances, you have a bigger problem than you realize.

The talented people who will accelerate, innovate and grow your business are working in another industry right now. Go find them and hire them!

Are you serious about transforming your sales organization, improving effectiveness, innovating and elevating the customer experience? Hire me.