If you define innovation as a cornerstone of your business strategy, there can be some potential pitfalls! Therefore, we have to talk about them and take actions acoordingly.
1- Premium position captivity as an inability
You think that you are successful as a leader, and you have great market share and customer loyalty today. This cannot be relevant in the future.
There can be some new low cost, competitive challenges or significant shift in customer needs due to the changes in new technology, services and/or products in anywhere in the world. They can enter into the market and the strengths of the company are transformed into towering weaknesses. Look at Fortune 500 list after 1955 and also failures of Polaroid, Xerox, Turkish Raks and others!
2- Poor innovation management
There may be breakdowns in innovation process due to the poor leadership capability, weak support from senior management, internal conflicts, poor technology, poor skills, poor ideas, poor research and development, poor competitive intelligence, poor communication with customers and poor product commercialisation. Leaders should carefully manage, monitor and measure innovations.
3- Abandoning a core business
Some companies have difficulties to exploit the opportunities in the core business. Therefore, they make acquisitions and enter another field that is distant from the current market, products and customers. This will bring many difficulties to achieve customer loyalty. Of course, if the company sees that there will be failures in the sector in the future, they have to make healthy disengagements on time
4- Poor talent and skills management
Companies can fail to innovate due to the poor human resources management and shortage of necessary skills and talents. Companies have to design and apply a competitive talent management and skills development strategy to create more transient competitive advantages.
5- A failure to understand the market and customers
Poor feedback from the market, customers and competitors creates a gap in taking the necessary actions to develop and implement a systematic and continuous marketing and innovation strategy. This gap will be filled by local and global players in the market.
6- Poor competitive intelligence
The company focuses short-term business goals such as profitability and keeping the market share and neglects the developments in technology, services, products, competitors and customer needs. They don’t make regular competitive intelligence for the short and long-term developments in the local and global markets. This situation can create business failures in the long-term.
Conclusion
Leaders should have to develop and implement a long-term flexible, systematic and continuous marketing and innovation strategy and create more and more transient competitive advantages through regarding above pitfalls.