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2024 - the end of innovation theater

Wichtigkeit des Innovationsmanagement

What awaits us in terms of innovation in 2024?

With the transition into the year 2024, the question arises as to whether the innovation landscape is on the verge of a profound transformation. Amidst a challenging economic situation and the pressure to demonstrate progress, it becomes evident that the era of mere innovation theater may be coming to an end.

Uncertain economic situation = cost reduction in companies - yes, even in innovation

The current economic conditions compel many companies to reconsider their expenditures. A superficial response would be to cut innovation budgets. However, the question arises: does this bring only short-term success or does it hinder the path toward becoming a learning organization with genuinely innovative projects in the long run? Investments in innovation are strategic investments in a company's future and competitiveness.

Who wants to look back in ten years and wonder why little or no resources were allocated for new experiences in the transformation of the existing business model or creating new ones?

Yes, innovation theater is expensive

Presenting innovations as mere marketing shows can consume substantial financial and human resources without achieving substantial progress. This was vividly demonstrated this year by the closure of major initiatives, countering the "sunk-cost effect" once and for all. Lavish labs, impressive talks and presentations, and elaborate marketing campaigns may impress, but they carry the risk of neglecting the actual substance of innovation. It's about discovering the future of the company with minimal resources and drawing insights for subsequent investments, instead of making long-term bets with a scattergun approach (which your competitors are also doing). Focusing on genuine, relevant innovations is not only cost-efficient but also has more sustainable impacts in the short and long term.

Also in 2024, technology remains what it is - a tool to solve user problems that have been properly understood.

Technology is what it is called - technology

Despite repeated announcements and promises, the hype around certain technologies persists. Others sink into disillusionment, only to resurface later as real value for real users. Blockchain, artificial intelligence, quantum computers – these terms are still on everyone's lips and continue to be celebrated as revolutionary technologies. However, how much of it is truly groundbreaking, and how much is just part of the ongoing innovation theater? Companies would need to admit that they often don't precisely know the value it brings to users and their own company. Often, it revolves around public relations instead of genuine innovation that answers the questions: "What does it bring to me, why should I replace the existing solution, and why is it not an option to stick with the old?"

Technology has never answered the "why" to the user, only the "how."

The role of companies

Companies find themselves in a dilemma between the drive for innovation and the need to maintain the status quo. Innovators strive for new ideas, technologies, and business models, while status quo preservers aim to protect existing structures and processes with incremental innovations. This tension significantly shapes economic developments. A balanced approach is crucial to avoid losing ground or taking unnecessary risks.

A strategy and checkpoint example:

  • H1: 70% budget, incremental innovation, product/market fit validated in 12 months

  • H2: 20% budget, architectural/radical innovation, problem/solution validated in 12 months

  • H3: 10% budget, radical innovation, problem statement validated in 12 months

The influence of users

With wage pressures, the purchasing power of consumers is also under stress. Users increasingly seek cost-effective alternatives to existing solutions. Companies that better understand the needs of their users and offer more cost-effective alternatives have a clear advantage. This allows them to persuade consumers to make a switch despite obstacles and gives them a stronger position in a market characterized by financial pressure.

The "Dolce far niente"

Companies that don't defend themselves against emerging competitors risk not only their competitiveness but also their existence. The costs of neglecting defense attempts can be incalculable and have long-term deadly effects on the company. It is crucial not only to passively defend the market position with incremental innovations against known competitors but also to proactively respond to changes and new competitors (even outside the existing market).

The cost of failing to defend yourself in business is priceless and deadly. In hindsight, you are smarter, but somehow also closer to your own death.

Conclusion: 2024 - the end of innovation theater

The costs of relevant innovation attempts are low but require a methodical approach. Companies must understand that innovation does not necessarily require high financial expenses nor the latest technologies. Relevant innovation attempts can be carried out with relatively low costs, especially when approached strategically and purposefully. Small, targeted investments can have significant positive impacts. Overcoming innovation theater requires a smart, targeted approach. The year 2024 could mark the shift to an era of genuine, cost-effective innovations – a time when not only the end of innovation theater is proclaimed but also the beginning of an era of truly sustainable innovations.

Yetvart Artinyan

P.S: Do you want to know more about how to make your innovation project successful and avoiding typical pitfalls?

  1. Extend your team and knowledge on a temporary or permanent basis: Contact me for a conversation.  

  2. Transfer the knowledge: Book one of the innovation bootcamps 

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