To identify failure root causes of innovation, NCSES and SRI conducted a series of case studies focusing on innovations brought to market after the year 2000. Failure root causes are identified as follows:
These five categories were identified by considering the primary causes of failure across the case studies. Each case study can be clearly linked to one of these five root causes as the primary reason an innovation failed in the marketplace. In several cases, more than one factor ultimately contributed to an innovation's failure.
Information on each case of innovation failure came mainly from press reporting. Case studies of commercially successful product innovations are common in academic literature, but coverage of product innovation failures is less prevalent and more likely to be found in the popular press. Following the Oslo Manual definition of innovation, for a new product or business process to be considered in this analysis, it must have been launched, that is, introduced on the market or brought into use by the firm prior to its failure. A product or business process that does not exit the development stage is not considered an innovation.
The failure timing for each innovation failure was identified as the product or business process life cycle phase during which it failed (launch, growth, or maturity). The five earliest phases of the life cycle (including the two pre-launch innovation activities) were used to identify when the root cause of the failure took place; this is the failure root cause timing. For example, a product might fail at launch (its failure timing) due to inadequacies during the product development phase (its failure root cause timing). Thus, failure timing can occur during launch, growth, or maturity; failure root cause timing can occur during ideation, development, launch, growth, or maturity.
Failure timing and failure root cause timing were used as the primary case study parameters for analysis. This paper uses these data to identify common patterns of innovation failure. In addition, for failure root cause, failure timing, and failure root cause timing, each case study classified a failed product or business process innovation and its sector as radical or incremental. Radical innovations are new-to-world innovations that fundamentally change the way value is delivered to the marketplace or that create wholly new markets. Incremental innovation refers to improvements to existing products and processes that make them better, cheaper, faster but do not change the nature of consumer value.
When examined together, failure root cause, failure timing, and failure root cause timing tell the story of innovation failure. They provide a narrative that explains when and why an innovation failed and highlight when the critical actions and decisions by inventors that led to the failures occurred.