Organizational Culture …. Maintaining a dynamic equilibrium between innovation and continuity

Organizational culture … “the way things get done around here”
Deal and Kennedy

Cameron and Kim profiled the cultures of >1,000 organizations. They discovered four kinds of organization culture: Adhocracy, Clan, Hierarchy, and Market.

They found that effective organizations are paradoxical

Paradoxical organizations combine features from all four cultures. As a result, the organization survives and thrives in their markets

The Four Cultures.

  • Adhocracy (Create) culture values new product development. It is confident that innovation creates new markets, new customers, and new opportunities.
  • Clan (Collaborate) culture is family-like. It holds in high regard sensitivity to customers and concern for people.
  • Hierarchy (Control) culture attaches great importance to a smooth-running organization.
  • Market (Compete) culture is results oriented. It esteems winning and defines success by market share and penetration.

 

Everyone knows the new product failure rate is over 80%

  • Really?  That’s terrible, where did you hear that?
  • It’s common knowledge!  Everyone knows that!
  • Yea – but who actually said it?
  • Everyone – don’t be stupid.

OK — so we took the stupid pill

We asked people inside 453 companies what their failure rate is.  And guess what  – the results are the same as they have been since dawn of recorded product research (about 1960).  It turns out most empirical research performed over 50 years confirms the product failure rate has been remarkably stable.

The product failure rate is 40% – half the amount that “everyone knows.”

But wait, there’s more

What if you could find out failure rate without asking people inside companies what their failure rate is?

You can!

Professor John Stanton looked at 1,500 new products, in eight food categories, introduced in the period 2010-2012. He used data from Mintel’s Global New Products Database to find out the date a product was introduced. He then checked each company’s website and defined a failed product as one not listed on the website at least 18 months after introduction.

The product failure rate is 35% … much less than “everyone believes”.

For more information on product failure rates: | Click on “Myths About New Product Failure Rates” in the Menu bar

Footnotes

(2013) Markham, S. and Lee, H Product Development and Management Association’s 2012 Comparative Performance Assessment Study  Journal of Product Innovation Management, Volume 30, Issue 3, pages 408–429

(2014) Stanton,  New Product Success Rate Higher Than Most Believe Food Processing  March 27, 2014

http://www.mintel.com/

JPIM – Product Success Rate