Arkaro Insights
Arkaro Insights is a podcast series produced by Arkaro, where we help B2B executives deliver better results with the latest ideas in change and innovation for your organisation.
About Arkaro
Arkaro is a B2B consultancy specialising in Strategy, Innovation Process, Product Management, Commercial Excellence & Business Development, and Integrated Business Management. With industry expertise across Agriculture, Food, and Chemicals, Arkaro's team combines practical business experience with formal consultancy training to deliver impactful solutions.
You may have the ability to lead these transformations with your team, but time constraints can often be a challenge. Arkaro takes a collaborative 'do it with you' approach, working closely with clients to leave behind sustainable, value-generating solutions—not just a slide deck.
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Arkaro Insights
Strategy First: The Critical Missing Element in Failed Product Launches
Welcome to the Arkaro Insights podcast. This episode is based on original content developed by Arkaro. At Arkaro, we're committed to innovation in everything we do—including how we share our insights. We've utilised advanced AI technology to transform our written expertise into this conversational format, making our content more accessible and convenient for our busy B2B audience. What you'll hear is a two-person discussion generated through AI voice technology, designed to deliver our insights in a more engaging way than traditional reading. As we continue to evolve this approach, we genuinely value your feedback. Thank you for listening to Arkaro Insights, where professional expertise meets innovative delivery.
Full article: Innovation Strategy Failures: Why 52% struggle with strategy
The innovation paradox is staring us in the face. While a staggering 83% of companies rank innovation as a top-three priority, more than half admit they're operating without clear strategic direction. Most troubling? Despite recognizing this critical flaw, only 30% plan to address it.
We dive deep into what experts call "zombie innovation" – the appearance of innovation activity without the strategic brain to guide it. This phenomenon leads companies to pour resources into developing solutions nobody wants, while executives focus on running more projects faster rather than ensuring they're heading in the right direction. BCG research shows innovation readiness has plummeted from 20% to just 3% in recent years, reflecting this fundamental strategic weakness.
The podcast unpacks three critical failures derailing innovation efforts, particularly in complex B2B sectors like agriculture, food, and chemicals. First, unclear or overly broad innovation strategies provide no meaningful filter for decision-making. Second, attempting to innovate across too many domains simultaneously dilutes expertise and creates undifferentiated "me-too" products. Third, poor market segmentation leads to developing solutions for mythical "average" customers rather than specific groups with urgent needs.
Success stories demonstrate the power of strategic clarity and focus. Companies with clear innovation strategies achieve 32% higher success rates for new products. Organizations like Novo Nordisk and Eli Lilly show how decades of sustained focus in specific domains leads to breakthrough innovations. The evidence is compelling: innovation strategy must be intrinsically connected to overall business strategy, focusing resources where market opportunity meets distinctive capability.
For executives recognizing these symptoms in their organizations, we offer four practical steps to begin addressing the strategy vacuum and transform zombie innovation into meaningful results. Ask yourself: Can everyone involved in innovation across your company articulate what your strategic priorities are? The answer may reveal why your innovation efforts aren't delivering the impact you expect.
Connect with us at www.arkaro.com or email mark@arkaro.com for a free consultation on strengthening your innovation strategy.
Welcome to the Arkaro Insights Podcast. We're here to help B2B executives like you deliver better results, digging into the latest ideas and change and innovation for your organization. This is the Deep Dive.
Speaker 2:And today, yeah, we're diving into some material one of you sent over. It's a great collection articles, research notes, all focused on something really, really critical.
Speaker 1:Right how having strategic clarity is just essential for launching products successfully. And well, what goes wrong when you don't have it?
Speaker 2:Exactly and the sources are really relevant. Especially there's an article here from Mark Blackwell, Arkaro's founder. He's drawing on a lot of experience, particularly in ag, food and chemicals.
Speaker 1:Yeah, those are industries where innovation is, let's face it, incredibly complex. The stakes are just so high.
Speaker 2:Totally and right away. This paradox jumps out from the material Innovation, top priority for almost everyone. Huge numbers of companies say it's key.
Speaker 1:But and this is the thing a massive chunk I mean a really big percentage admit they don't actually have a clear strategy for it.
Speaker 2:That's the kicker, isn't it? And even weirder, most of them, despite knowing it's a problem, aren't planning to fix that strategy gap.
Speaker 1:It makes no sense. So, okay, that's our mission for this deep dive. Right, let's unpack this stuff. Why is strategy so non-negotiable and what really happens like tangibly when that foundation just isn't solid?
Speaker 2:Let's do it Okay. So let's start with that core problem. The sources flag up. Get this a record 83% of companies rank innovation as a top three priority. 83%.
Speaker 1:Sounds great on the surface, you'd think fantastic, lots of growth coming.
Speaker 2:You would, but then you scratch beneath that and you hit this. Well, this contradiction.
Speaker 1:And here's where it gets frankly a bit worrying. And you hit this well, this contradiction. And here's where it gets frankly a bit worrying, Despite saying it's top priority. The same research shows 52% of innovation execs say having an unclear or maybe overly broad innovation strategy is one of their top three challenges.
Speaker 2:Over half Struggling with the basics the why are we doing this and where should we focus?
Speaker 1:This fundamental stuff.
Speaker 2:And what's well, maybe most troubling, is that follow-up stat. So 52% see strategy as a challenge, right, but only 30% actually plan to, you know, revisit or refresh that strategy.
Speaker 1:So they know it's broken.
Speaker 2:They know it's a problem. Yeah, but it's not getting prioritized to be fixed.
Speaker 1:It's like knowing your car's engine light is blinking red. You don't even know why it's blinking, but you decide nah, I'll just get those cool racing stripes fitted instead. It's bizarre.
Speaker 2:That's a good analogy, and the sources have this great term for it they call it zombie innovation.
Speaker 1:Zombie innovation. I like that Tells you exactly what it is.
Speaker 2:It does, it captures it perfectly. You've got all the appearance of innovation happening. You know the projects, the labs, the brainstorm sessions, Lots of activity. Busy work, maybe Kind of.
Speaker 1:But there's no strategic brain guiding it. So the argument is these organizations just end up pouring money, time, talent into developing things that ultimately customers just don't want or need.
Speaker 2:It's innovation theater almost going through the motions.
Speaker 1:Pretty much Innovation for its own sake, leading nowhere useful. Innovation theater almost going through the motions. Pretty much Innovation for its own sake, leading nowhere useful. And the data well, it's starting to show the impact. Yeah, that BCG research mentioned in the sources. It's pretty sobering reading, isn't it?
Speaker 2:Innovation readiness companies actually set up to innovate well, Plummeted, I mean really dropped off a cliff from 20% in what they call the ready zone back in 2022.
Speaker 1:Down to just 3% in 2024? 3%.
Speaker 2:That's a huge fall and it really reflects this underlying weakness in strategy, this deficit.
Speaker 1:So how does this happen? Sources talk about a strategy vacuum right, exactly the strategy vacuum.
Speaker 2:It happens when companies just jump. They jump straight into generating ideas, running projects.
Speaker 1:Without asking the basic questions first.
Speaker 2:Precisely Without nailing down. Why are we innovating? What specific customer pain point are we actually trying to fix and where should we put our limited resources time, money, people to get the biggest bang for our buck?
Speaker 1:It's like setting off on a road trip, but you haven't decided where you're going and you forgot the map.
Speaker 2:You're just so, you're moving, yeah, but you'll probably end up somewhere you didn't expect and almost certainly not where you needed to be.
Speaker 1:Okay, so the sources especially thinking about those B2B sectors like ag, food chemicals. They pinpoint three specific critical strategy failures that they see again and again, Failures that derail launches, kill innovation efforts.
Speaker 2:Yeah, let's break those down. They really show the consequences of that vacuum. First one we've sort of touched on it having an unclear or just way too broad innovation strategy.
Speaker 1:This is the big one. The 52% challenge Strategy is just too vague, like let's be more innovative or we need new products.
Speaker 2:Which sounds okay, but it's useless as a filter. Right, there's no real guidance. So companies greenlight projects based on I don't know gut feel or maybe whoever shot the loudest.
Speaker 1:Resources get spread super thin across tons of unfocused ideas.
Speaker 2:And you end up building stuff nobody actually values enough to pay for.
Speaker 1:The sources give these contrasting examples, which I thought were useful Company A versus Company B.
Speaker 2:Right Company A is like let's just capture every idea from everyone and see what sticks.
Speaker 1:Sounds democratic, maybe, but chaotic.
Speaker 2:Totally chaotic. Hundreds of ideas maybe, but no strategic lens to evaluate them properly. Pursuing them burns through resources like crazy.
Speaker 1:Okay, so contrast that with Company B. They've done their homework. They've said right precision application technology in crop protection.
Speaker 2:That's our spot. We're strong there technically and we see a real market need. And their goal isn't just be better, it's specific Develop solutions helping farmers cut input costs by 15% or more while keeping or boosting yield.
Speaker 1:That's a filter. Big difference Company A is just reacting to ideas, company B is led by strategy focused on a domain aiming for a specific outcome.
Speaker 2:Exactly. And that 15% cost reduction goal? It's not just a nice target written down somewhere, it becomes the guide for everything R&D, choices, prototypes, market tests. It instantly filters out ideas that don't serve that specific purpose.
Speaker 1:And does this focus actually pay off? The data suggests it does right.
Speaker 2:Oh, absolutely. The sources cite Cooper and Edget research showing companies with clear strategies have a 32% higher success rate for new products 32%.
Speaker 1:That's significant.
Speaker 2:And BCG found that companies linking business and innovation strategy well, they see 5% higher sales coming just from new products. So yeah, clarity definitely translates to bottom line results.
Speaker 1:OK, so that's the first failure being unclear or too broad. What's the second critical failure?
Speaker 2:the sources highlight the second one is related but distinct. It's trying to chase too many different areas at once. The sources call it misfocus on innovation domains.
Speaker 1:Spreading yourself too thin basically.
Speaker 2:Exactly Especially common in complex sectors like chemicals was mentioned. Without picking your battles, your domains, companies try to innovate across every possible product line, every potential application.
Speaker 1:And the result R&D gets scattered, Expertise gets diluted. Potential application the result R&D gets scattered, Expertise gets diluted.
Speaker 2:Yeah, and you end up developing products that are maybe only slightly different from what competitors already offer. It's that me too product trap. Nothing really stands out.
Speaker 1:Whereas the alternative is that sustained focus, like the examples given Novo Nordisk and Eli Lilly.
Speaker 2:Right. Think about their decades literally decades of deep commitment to diabetes research. That wasn't an accident. It was a strategic domain choice.
Speaker 1:And all that accumulated knowledge, that patience.
Speaker 2:Eventually led them to major breakthroughs in related areas, like the obesity treatments we're seeing now. It shows the power of building really deep expertise in a chosen space over time.
Speaker 1:There's a real world example too. Wasn't there An agricultural inputs client?
Speaker 2:Yeah, the material mentions a former client. Initially they were playing in herbicides, fungicides, insecticides and biostimulants A bit of everything. That was ambitious, ambitious, but their R&D team, even though talented, was just stretched too thin. They couldn't achieve real differentiation anywhere Lots of me, too, stuff. That's what changed. They made a tough strategic call. They narrowed their focus dramatically down to just two categories and they poured significant sustained investment into those areas.
Speaker 1:And that led to.
Speaker 2:Building genuinely distinctive capabilities, developing products that actually stood out, gained real market traction, so that strategic contraction actually fueled their growth. It's counterintuitive sometimes.
Speaker 1:Okay, focus is key. That brings us to the third critical failure point mentioned.
Speaker 2:Great. The third one is poor market segmentation.
Speaker 1:Ah, so not really understanding who the customer is.
Speaker 2:Exactly, or more often, overestimating how many people will want your shiny new thing. There's a lack of deep customer is Exactly, or more often, overestimating how many people will want your shiny new thing. There's a lack of deep customer understanding. The sources mentioned an EY study on new materials companies.
Speaker 1:They called it optimism biased, believing your cool new material is going to appeal to absolutely everyone everywhere.
Speaker 2:Yeah, the, if we build it, they will come fallacy. But without really granular market segmentation, understanding different groups with different needs, your marketing just becomes noise.
Speaker 1:Diffused messages that don't really connect with anyone specific. You're shouting into a crowd instead of having a conversation, right?
Speaker 2:Effective segmentation, as the sources lay it out, means finding specific, defined customer groups, Groups that have urgent unmet needs.
Speaker 1:And, importantly, needs that actually align with what your organization is good at.
Speaker 2:Yes, and these segments need to make economic sense. Obviously and crucially, they often have distinct behaviors or requirements that make them different from other potential customers. If you don't do that, detailed work you risk developing products for this mythical average customer, someone who doesn't actually exist in the real world.
Speaker 1:And you miss the chance to create something amazing for a specific group that really needs it and would happily pay for it.
Speaker 2:Precisely so. All three of these failures the unclear strategy, the misdomain focus, the poor segmentation they all point back to a fundamental idea in the sources.
Speaker 1:Which is.
Speaker 2:That innovation strategy isn't some separate thing you do over in a corner. It has to be fundamentally linked, intrinsically tied to your overall business strategy.
Speaker 1:It's not just about cool ideas. It's about finding those sweet spots where there's a real market opportunity and where your company has what the sources call the right to win.
Speaker 2:The right to win, meaning you either have, or you can realistically build, the distinctive capabilities you need to beat the competition in that specific space. And there's data backing this linkage up to strong data McKinsey Research is cited, showing companies with that strong connection significantly higher sales from new products and that 2024 BCG research again really striking what did that find? The 12% of companies with strong links between business and innovation strategy. They dramatically outperform the others. It's not a small difference.
Speaker 1:Okay, so how do you build that link? The sources suggested a kind of framework.
Speaker 2:Yeah, a practical way to think about it. Four steps, essentially One. Define your strategic growth vectors. Where does the business want to grow? Markets, customers, needs.
Speaker 1:Two analyze your capability, strengths. What are we genuinely uniquely good at Be honest?
Speaker 2:Three identify domain opportunities. Where do those growth vectors and our capabilities overlap? Where's the sweet spot?
Speaker 1:And four. Develop specific domain strategies for those priority areas. Nail down the goals, the resources needed, the specific customer and problems you're going to solve there.
Speaker 2:Right. That framework gives you the structure, the guardrails that ensures your innovation efforts are actually pushing the whole business forward in the areas that matter most.
Speaker 1:Makes sense and strategy isn't just a document, right.
Speaker 2:Right. It needs to drive action Absolutely. It's useless if it just sits on a shelf. The sources are clear. It has to be actionable. It needs to inform key decisions day to day, week to week Like what kind of decisions? Crucial ones Resource allocation when does the R&D money go? Where is marketing focus? Sales effort it guides portfolio portfolio management. How do you balance tweaking existing products versus swinging for the fences with bigger bets within those chosen domains?
Speaker 1:partnership decisions too, I suppose definitely.
Speaker 2:Knowing your strategy helps you decide. What capabilities do we build ourselves, what do we need to get through acquisition or find via external partners and talent development, making sure you've got the right skills for the strategic priorities you've set.
Speaker 1:So when strategy drives all that, things start to connect.
Speaker 2:Exactly, innovation activities become coherent, not just a scattergun approach. They build on each other. You start creating this cumulative advantage in the areas you've chosen to dominate.
Speaker 1:Okay. So if it's so important and over half the companies know their strategy is unclear, why aren't more fixing it? Let's circle back to that paradox.
Speaker 2:It's still bugging me it is baffling, isn't it? 52 see the problem, only 30 plan to fix the strategy itself. So where is the focus going instead?
Speaker 1:the source is pointing to operational stuff.
Speaker 2:Right efficiency yeah, a big majority 70 plan to boost efficiency and speed within their existing innovation processes get faster and 63% just want to increase the sheer number of projects they have running.
Speaker 1:More projects going faster, but potentially all heading slightly off course.
Speaker 2:That's the risk. You could have the most efficient innovation engine in the world, but if it's pointed in the wrong direction, the quote from BCG in the sources really hits hard here. What was that again, they said? Without a sharp innovation strategy aligned with a clear business strategy, even the most efficient and flexible innovation system will fail to create value.
Speaker 1:Ouch, yeah so you can't just optimize your way out of a bad strategy. Nope.
Speaker 2:Efficiency doesn't fix a flawed destination.
Speaker 1:Okay. So if this is resonating, if maybe you're listening and thinking hmm, maybe we've got a bit of that zombie innovation going on, or our strategy feels a bit vacuum, like what can you actually do? The sources had some practical steps.
Speaker 2:They did Four concrete things you can start doing like now. First, audit your current innovation activities.
Speaker 1:Take a hard look at the portfolio.
Speaker 2:Exactly how many of your current projects are genuinely clearly linked to your stated strategic priorities? What percentage of your budget is going to stuff where that link is Well weak or maybe non-existent? Step two Engage leadership. Try to shift the conversation upstairs. Move it away from just reviewing individual projects one by one. Focus the discussion on defining and agreeing on those, say three to five, key strategic growth areas where innovation must deliver.
Speaker 1:Get that top level alignment first.
Speaker 2:Critically important. Third communicate strategic intent relentlessly.
Speaker 1:Make sure everyone knows the why.
Speaker 2:Everyone. It's not enough for the execs to know the plan. Everyone touching innovation, r&d, product managers, marketing sales. They need to understand not just what they're working on, but why it matters. How does their specific project connect to the big picture, to those strategic priorities?
Speaker 1:Got it. And the last step?
Speaker 2:Review your governance models. How do you actually make decisions about innovation projects? Look at your stage gate process, your project review criteria.
Speaker 1:Do they explicitly check for strategic alignment?
Speaker 2:That's the question. If not, revise them, Bake strategy right into the DNA of how you approve, continue or kill projects.
Speaker 1:So the core message. Boiling it all down from these sources, it seems really clear.
Speaker 2:It is. Strategy isn't just some planning exercise. It's the absolutely vital bridge. It connects your big business ambitions to what your innovation teams actually do. It's the foundation you have to build first, even before you get to crafting clever value propositions. Exactly Without that clear, focused strategy, organizations just keep wasting precious resources, they confuse their customers with offerings that don't seem to flow together and they fail ultimately to build those distinctive capabilities they need to win long term.
Speaker 1:Which leaves you, the listener, with some pretty fundamental questions to think about, questions pulled straight from the source material.
Speaker 2:Yeah, Ask yourself how truly clear is your organization's innovation strategy right now.
Speaker 1:And maybe even more critically, can everyone involved in innovation right across your company actually articulate what your strategic priorities are?
Speaker 2:Thinking hard about those questions. Well, that's really the first step away from potential zombie innovation and towards generating innovation that delivers real, impactful results.
Speaker 1:This deep dive focusing on why clear, focused innovation strategy linked to business goals is so critical has been brought to you by the Arkaro Insights Podcast. We're dedicated to helping B2B executives like you improve results through change and innovation.
Speaker 2:And if you'd like to learn more about how Arkaro helps companies with strategy, innovation, process, product management and other areas, you can find out more online. The website is www. arkaro. com
Speaker 1:You can also keep up with the latest insights by following Arkaro on LinkedIn. It's a good follow.
Speaker 2:And if you're facing specific challenges around innovation or strategy in your business and you'd like to discuss them, you can get in touch. For a free consultation. Just email Mark Blackwell directly. His email is mark@arkaro. com
Speaker 1:Thank you so much for tuning in to the Arkaro Insights Podcast. We really Thank you so much for tuning in to the Arkaro Insights podcast. We really hope you found this deep dive valuable today.
Speaker 2:Yes, and please, if you did find it helpful, share it with colleagues who might also benefit from thinking about the strategic foundations of their own innovation work.
