Why do Innovation Projects Fail?

In order to accurately determine the success rate for traditional innovation processes we can examine reports from 12 different sources, including the Harvard Business Review, the consulting firm Frost & Sullivan, the professional services firm PricewaterhouseCoopers, the Product Development Management Association (PDMA), the Corporate Strategy Board and others.

  • Frost & Sullivan reported (i) that only one in 300 new products significantly impacts a company’s growth and (ii) that only 1% of new products recoup their product development costs.
  • The Corporate Strategy Board reported that over the past four decades, of the 172 companies that spent time in the Fortune 50, only 5% sustained a growth rate greater than the growth rate of the gross domestic product.
  • PricewaterhouseCoopers reported that only 11% of all venture investments get to any capital liquidity.
  • G. Cooper reported that new products succeed 25% of the time.
  • The Product Development Management Association (PDMA) claims that new products succeed 59% of the time.

The 12 sources studied and the innovation success rates they cited are summarized in the table:


In order to study the success rate of our Outcome-Driven Innovation (ODI) methodology,  interviews were conducted with representatives of 43 Strategyn clients that had used ODI to launch a product or service or to engage in an operational or marketing innovation initiative. No incentives were offered to those who participated, and to encourage candor, anonymity was assured.

Companies were asked to judge the success of the ODI initiative they undertook based on their choice of one of four success metrics: revenue, market share, customer satisfaction, or return on investment. The company representative was re-contacted to confirm agreement with the categorizations (i.e., successful or unsuccessful, the success metrics used, etc.).

Of 21 projects that made use of the ODI methodology and resulted in product launches, 18 were rated successes by the sponsoring company—an 86% success rate. Five of these product launches received industry awards.


Learn more >>


JOBS TO BE DONE: Theory to Practice
by Anthony Ulwick
IDEA BITE PRESS October 25, 2016