10 Companies that Failed to Innovate: 5 Innovation Lessons Learned

Summary

In this video, Gijs van Wulfen, a LinkedIn Influencer on creativity, design, and innovation, discusses the pitfalls and strategies for organizational innovation. He highlights the downfall of companies like Nokia, ToysRus, and Blockbuster due to their failure to innovate and adapt to changing technologies and market demands. Van Wulfen offers five tips for fostering a culture of innovation, including staying agile, creating an in-house culture of innovation, picking the right moment to innovate, staying open to new technologies, and being willing to cannibalize your own products. He emphasizes the importance of courage in innovation and encourages viewers to disrupt their organizations in time to survive and thrive in disruptive times.

Takeaways

• 📱 'Nokia's Fall': The script highlights how Nokia, once the leading mobile phone company, failed to innovate with the introduction of the iPhone and lost its market dominance due to a lack of courage to change.
• 🏆 'Success Pitfall': Success can blind companies to new opportunities and threats, as illustrated by the examples of Compaq, Hummer, and National Geographic.
• 🛒 'ToysRus's E-Commerce Delay': ToysRus's decision to sign an exclusive contract with Amazon and its late entry into e-commerce shows the danger of relying too heavily on current technology without anticipating future shifts.
• 💡 'Innovation Culture': The script emphasizes the importance of fostering an internal culture of innovation rather than outsourcing it, as seen with Blackberry's failure to adapt to touchscreen technology.
• 🕒 'Timing is Key': Gijs van Wulfen advises starting innovation efforts early, as it can take up to five years to develop a disruptive technology, using National Geographic's missed opportunity with the Discovery Channel as an example.
• 🔄 'Stay Agile': Market leaders must remain agile and ready to adapt to changes in the market, as Blockbuster failed to do with the rise of digital media.
• 👀 'Openness to New Tech': Organizations should stay open to new technologies, even if they have invested heavily in current systems, as Xerox did with its inventions that were later capitalized on by Apple and Microsoft.
• 🔪 'Cannibalize to Survive': The willingness to cannibalize one's own products for the sake of innovation is crucial for long-term survival, as Hummer failed to do during the energy crisis.
• 🚀 'Courage to Innovate': The most important quality of an innovator is courage, which is needed to challenge the status quo and lead change within an organization, as Kodak lacked in transitioning to digital cameras.
• 🌟 'Bonus Tip': The script concludes with the bonus tip that courage is essential for innovation, urging leaders to take bold steps to disrupt their own organizations and stay ahead of disruptive times.

Q & A

What was the first mobile phone introduced by Nokia and how did it affect the company's future?

Nokia introduced its first mobile phone in 1987, which initially made it the biggest and leading mobile phone company. However, the introduction of the iPhone by Steve Jobs in 2007 marked a turning point, as Nokia lacked the courage to innovate with a new user experience, leading to its downfall.

What is the 'Success Pitfall' as described in the script and why is it dangerous for companies?

The 'Success Pitfall' refers to the blindness that success can cause, making a company overlook the changes and innovations happening around them. This can be dangerous as it can lead to complacency and inability to adapt to new market trends, as seen with Nokia's response to the iPhone.

Why did ToysRus fail to adapt to the e-commerce revolution?

ToysRus signed an exclusive contract with Amazon in 2000, but Amazon began allowing other toy vendors on its platform. ToysRus was slow to react and jumpstart its own e-commerce business, which was too late, illustrating the Dependency Pitfall of relying too heavily on business partners for innovation.

What is the 'Present Technology Pitfall' and how did it affect Xerox and Nokia?

The 'Present Technology Pitfall' occurs when a company is reluctant to recognize and invest in new technologies due to heavy investments in existing equipment and systems. This happened to Xerox and Nokia, who failed to adapt to digital advancements, leading to their decline.

How did Compaq's struggle with the value chain contribute to its downfall?

Compaq, once the world's largest supplier of personal computers, struggled to keep up with price wars against competitors like Dell, who innovated the value chain by selling directly to consumers. This inability to innovate led to Compaq's downfall.

What is the importance of staying agile as a market leader, as suggested in the script?

Staying agile as a market leader is crucial for adapting to market disruptions. It involves being ready to innovate and change strategies quickly to maintain a competitive edge, as complacency can lead to being overtaken by more agile competitors.

Why is it essential to create and maintain a culture of innovation within a company?

Creating and maintaining a culture of innovation ensures that innovation is an integral part of the company's operations and not outsourced or dependent on external factors. This internal focus on innovation is vital for long-term success and adaptability.

What was Blackberry's mistake in terms of product innovation, and what was the consequence?

Blackberry's mistake was to continue using keyboards on most of its devices instead of adopting the touchscreen trend. This failure to innovate with the market led to Blackberry losing its market position.

Why is it important to pick the right moment to innovate, and what does it entail?

Picking the right moment to innovate is important because it takes time to ideate, invent, and develop new technologies for disruptive breakthroughs. Starting the innovation process during periods of success ensures that the company is prepared for future disruptions.

What did National Geographic miss by refusing the idea to start a new cable channel, and what was the outcome?

National Geographic missed the opportunity to innovate and expand its reach by refusing the idea to start a new cable channel. The producers who pitched the idea went on to launch the Discovery Channel, which became a competitor.

Why should companies be ready to cannibalize their own products when new technology emerges?

Cannibalizing one's own products is a strategic move to stay ahead of the competition. It may hurt short-term profits, but it ensures the company's survival by adapting to new technologies before competitors do, as seen with the Hummer's failure to adapt during the energy crisis.

What is the most important quality of an innovator according to the script, and why is it crucial?

The most important quality of an innovator is courage. It is crucial because it drives the innovator to challenge the status quo, propose new ideas, and lead change within the organization, which is essential for innovation and survival in disruptive times.

How did Kodak's fear of cannibalizing its own business affect its ability to innovate?

Kodak's fear of cannibalizing its film business by developing digital cameras for the mass market led to missed opportunities and ultimately contributed to the company's decline, as it failed to adapt to the digital revolution in photography.