Fostering Innovation in Mature Companies

Strategy+Business shows why innovation can be so challenging for older and established businesses. Their case study: Mars Inc. In the 1990s, consumers audited their diets to remove chocolate covered, sugar-loaded treats to welcome the Atkin diet and other weight loss phenomenons. As a result, Mars had to develop new products to meet consumer demand, but their innovation process seemed flawed.

According to Strategy+Business:

Why do mature businesses struggle with innovation? Much of the problem can be traced to conventional wisdom, which goes something like this: The secret to growth in the consumer goods arena is to de­velop new products based on consumer needs, which are discovered through consumer research and focus groups. And what if a new idea is not great? No big deal. Marketing and advertising can always step in, turning a so-so concept into a hit. And the first to market, goes the reasoning, will capture most of the profits. This kind of thinking leads to innovation cultures that deliberately develop a long list of line extensions — new flavors of an established soda brand, say — rather than the kind of game-changing innovations that can make a real difference to the bottom line.
  

While Mars relied on a formula for healthy profits in any economy, experienced business execs understand there is no formula for success.