Can large early investments in an innovation actually DECREASE chance of success?
This seems counter-intuitive but there are benefits to starting cheap.
Today I watched a webinar by the amazing team at Strategyzer, and this was one of the many insights I found interesting. Investments are crucial for innovation—but excessive or premature large investments can introduce challenges that reduce the chances of success.
Here are some reasons why a large early investment could DECREASE an innovation’s chance of success:
Reduced risk-taking: The willingness to take calculated risks and learn from failures is essential for successful innovation. Fear of failure due to substantial investments can hinder the exploration of new avenues and limit breakthrough opportunities.
Overcommitment to initial ideas: Reluctance to pivot away from less viable concepts due to substantial investment can prevent the allocation of resources to more promising opportunities, limiting the chances of success.
Decreased motivation for resourcefulness: An abundance of resources can reduce the motivation to explore alternative approaches or seek out innovative ways to achieve goals, limiting the potential for breakthrough ideas.
Lack of flexibility: When investments limit adaptability, it can significantly hinder the success of an innovation project by preventing necessary changes and adjustments.
Longer development times: Slower decision-making and reduced agility can reduce the organization's ability to adjust quickly to market feedback and seize emerging opportunities.
Stifled creativity and experimentation: If the focus shifts primarily to short-term financial returns instead of long-term innovation and sustainability, it can impede the creative exploration and experimentation necessary for breakthrough innovations.
Reduced learning opportunities: Large investments can inadvertently limit opportunities that come by failing fast (and cheap) and learning. Without the ability to learn from small-scale experiments and make adjustments, the chances of success diminish.
I’m sure many innovators would like to have this problem, and the impact of large initial investments on innovation isn’t all negative. But balancing financial resources with the need for flexibility, risk-taking, and adaptation is important for increasing the chances of innovation success.
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Some related resources:
Strategyzer: website and books such as Testing Business Ideas and The Invincible Company
Design Sprint: check out the Sprint book (How to Solve Big Problems and Test New Ideas in Just Five Days) by Jake Knapp and the Sprint Stories website for case studies.
The Right It (Why So Many Ideas Fail and How to Make Sure Yours Succeed): book by Alberto Savoia.