Innovation has never been just about having good ideas; it is about outcomes. MIT Professional Education estimates that 95% of new products fail in market, and research cited by Harvard Business Review suggests 94% of senior executives are dissatisfied with their innovation outcomes. Our own benchmarking over 20 years suggests similar failure rates and in the 9 out of 10 cases where ideas fail, around 6 are driven by a lack of internal alignment and issues in development, not the idea or the market opportunity itself.

So the problem isn’t activity; it’s converting it into commercial success. In our experience, most of the issues lie within the innovation operating model: the engine of how the business does innovation.

The next age of innovation – the performance age

Innovation has moved through distinct ages, each a response to the one before. In the Age of Creativity, ideas were everything. Ideas without structure rarely made it, so the Age of Process brought stage gates and governance. When process was blamed for slowing things down, the Age of Speed brought sprints, agile, MVPs and, increasingly, AI.

Each shift brought new ways of working, yet new product failure rates remain unchanged. None of them got to the question leaders care about most: what are we getting back from our innovation investment, and how do we improve our innovation ROI?

We believe innovation is now in the Age of Performance. Budgets are tighter, scrutiny is sharper and innovation teams must show a clear return on innovation investment: better choices about where time and money goes and more focus on what happens in market. It isn’t about taking creativity out of innovation; it is about giving creativity the best possible chance of creating value.

This matters now more than ever. After 18 months of shrinking to grow, companies are turning back to organic growth, and innovation has to deliver it, both for the business and in response to consumer behaviours that are shifting faster than ever.

How to diagnose why innovation isn’t working – the visible problem is rarely the real one

When innovation underperforms, the process usually gets the blame. From our work with some of the world’s biggest FMCG companies, the symptom often sits a long way from the cause. A slow process may reflect a strategy too unclear to support quick decisions, or to make decisions that stick long enough to execute. A weak innovation pipeline may mean too many projects, with resource spread too thinly.

That is why we look at the whole innovation engine: the strategic precision behind it, the mechanics that move ideas through it, and the organisation, capabilities and culture around it.

So how do you drive better performance in the innovation engine?

1. Ideas don’t drive better outcomes

Many projects leap into “ideation” at the earliest opportunity – it feels like progress and has been innovation mantra since innovation first became a recognised discipline. The truth is a high-functioning innovation strategy and process will create bigger in-market impact than the wackiest of workshops. This strategic view comes from a better brief, which is grounded on a clear vision of what a good outcome looks like. It makes success criteria explicit, so teams know what winning means long before the final gate.

“Think outside the box” sounds liberating, but there is always a box, and clear boundaries tend to produce bolder ideas, not fewer. Freedom needs a frame.

In addition, there will always be more to pursue than resource to do it. Leaders need an investor mindset and the confidence to say no to the noise and focus on the ideas that will scale. That takes decision-making processes, behaviours and criteria rigorous enough to make the choices and hold them. The result is a more focused allocation of resource and bigger returns – improved innovation ROI.

2. Starting with the end in mind – making ideas bigger over time

The heart of a good idea lies in asking the right questions about what is required to solve a consumer or customer problem and create value from it. The questions of how to deliver it, and what must be true for it to scale, are usually left until later in the process. Such practical considerations, the thinking goes, might crush delicate ideas.

But when these questions arrive late, they tend to make ideas smaller: a radical new idea destined to be delivered through a BAU executional model. In reality the most powerful part of an innovation can be how it is delivered or experienced, so the how belongs inside the creative idea from the start.

Real innovation isn’t about capturing the idea, or even getting to launch, it is about scale and designing commercial innovation propositions. Committing to scale is usually a multi-year game, and acknowledging this prevents the trap of LAPD (launching, abandoning, panicking and discounting).

3. People power

As AI makes tools and techniques widely available, the result is in many cases a raising of the floor and not the ceiling – people can be the real differentiator. There are challenges however.

Structurally, innovation cuts across brand, commercial, R&D, supply and finance. Bringing functions in early, with shared goals, avoids late surprises and stops silos undermining innovation.

Innovation creates pressure: there is novelty, a lack of certainty, and both upside and downside for individuals and the business. Whilst the role of psychological safety is well documented, grounding this in crystal-clear decision-making and empowerment, and being utterly clear about which behaviours are expected, capturing and tracking them in real time, are underleveraged.

In sum

The 95% is not inevitable. Better innovation performance means more value from the resource already committed. That doesn’t mean a new innovation engine, just remapping and supercharging the one you have.

If any of these challenges feel familiar, we’d love to talk.

We have a few diagnostic and benchmarking calls available on a first-come, first-served basis – contact hello@mangrove.team for details.

Mangrove – FMCG Innovation Consultancy