Innovation In Public: A Risky Business

When innovation goes wrong. . .

You’ve heard of the Innovator’s Dilemma – should a business give customers what they think they want, or take a leap of faith and introduce new products or services? Even if the new product or service is of groundbreaking quality, deviating from what consumers are used to can be risky. Technology has created opportunities for businesses to reach their audiences in a new way, but often there is a reluctance to do so. This is due to the potential risk of confusing and alienating loyal customers, damaging brand image and, of course, the chance of failure. Despite knowing that innovation is necessary for growth, every business has to seriously consider whether adopting a new strategy is worth it. The stakes are arguably higher for legacy companies, who don’t always share the same flexibility as startups. So what happens when innovation doesn’t go as planned, and how can businesses avoid a similar fate?

When innovation fails

Perhaps the most notorious example of a complete backfire is Microsoft’s Tay chatbot. The bot was launched on Twitter, and gathered information from users through Artificial Intelligence. What was intended as a way to reach millennials quickly turned into a farce as users fed the bot with inappropriate and racist comments. Tay is by no means the first chatbot to face rejection. Integrating underdeveloped chatbots into apps has become a distinct trend, damaging the overall adoption of the technology. This summer, Snapchat experienced similar backlash following a collaboration with sculpture artist Jeff Koons. Using the app’s Augmented Reality technology, Koons’ sculptures could be dropped into different locations across the globe. Headed up by Sebastian Errazuriz, the artist community did not take kindly to what they viewed as a corporate invasion of virtual public spaces and digitally vandalised the sculptures in protest. Another example comes from the realms of social media. When Walkers asked consumers to share selfies on social media with the hashtag #WalkersWave, what they didn’t expect was photos of infamous sex offenders and criminals. What these examples show is that even the best laid plans can be badly received, and that it can be impossible to tell how consumers will react to campaigns. There will always be a level of risk involved – but equally, it’s not as if these three companies haven’t been able to recover.

How can businesses successfully iterate innovation?

Snapchat, Microsoft and Walkers all attempted to use technology to their benefit, but they failed to anticipate the deeper implications. The simple fact is that companies who want to use technology to do something different need to be aware that it might not have the desired effect. However, by applying market research, data analysis, and good old fashioned common sense, other businesses can avoid these situations. Using simple, low cost methods of product testing like Minimum Viable Product (MVP) could also help to avoid these scenarios.

Another key investment that companies can make is to set up Innovation Labs. These departments have become an integral part of how business run, pooling together ideas in a dedicated environment. There’s always the option to rely on someone else, too. The startup-as-a-service method, for instance, involves creating (or acquiring) a startup and experimenting with it to benefit the parent company.

The application of these approaches is likely to impact the way that future campaigns work. M&C Saatchi, for example, trialled AI laced ad campaigns that detected the emotions of spectators and then changed to accommodate them. The products and services of tomorrow will become far more responsive to consumer attitudes, which also means they could be increasingly temporary. While this could damage customer loyalty, millennial customers are less interested in brands and more bothered about the quality they offer. Ironically, the simplest and most integral rule of business – knowing your customers – also seems to be the most challenging.

Innovation is a risky business

As shown by Snapchat, Microsoft and Walkers, doing something different is not always a good idea. Nonetheless, companies need to adapt or may die. There are a number of ways that businesses, legacy or otherwise, can work out if a new product, service or campaign will be successful. The techniques and flexibility that characterise product development at startups can also be applied within incumbent companies. Innovation labs, breakaway teams and quick wins like MVP are just a handful of options to test and trial things before disaster strikes – but maybe the best weapon against the tempestuous consumer market is a bit of common sense.

Has your business experienced backlash over the adoption of a new strategy or technology? How else can companies make sure that they are not alienating consumers? Should more legacy businesses strategise like startups? Share your thoughts and experiences.