Innovation Failure: Typologies for appropriate R&D management

Abstract. In markets having innovation-based competition and market turbulence, one of the fundamental problems is the high risk of failure in new innovation projects that generates negative effects on firm performance and related competitive advantage. In the field of strategic and innovation management, a vital aspect is the categorization and explanation of different failure types in innovation model and how their role can slow down or spur technological advances. The study confronts this problem here by developing a taxonomy to categorize different failures in innovation projects for technology analysis of the stages and sources of innovation failures in order to sustain strategic management to improve organizational processes in goal setting and achieving. The development of this framework is due to the lack in current literature of the innovation management of a categorization that describes the different typologies of failure in innovation projects that occur in the model of innovation. This theoretical gap generates difficulties both to communicate the specific types of innovation failure and provide fruitful feedbacks for improving strategic change in markets. Three basic types of failure in innovation projects are proposed: a) achieving-goal failure; b) planning process failure; c) execution failure. Case study research verifies proposed taxonomy in practical contexts, revealing that pharmaceutical sector is prone mainly to achieving-goal failure in innovation projects, whereas aerospace and aircraft industries are affected mainly by planning process and/or execution failure in innovative projects. This study conceives that proposed taxonomy can be used to: (1) describe what categories of failure are in-process and which are out-of-process in innovation model designed, and (2) detect the pivot stage in which failure in innovation project can origin to understand potential and current sources. The failure of innovation projects reveals the temporary bounded rationality and limits of people and organizations to solve problems in complex environments. Hence, this study seeks to provide a general theoretical framework, supported by a case study research, which may guide R&D managers, designers, analysts, etc. when a failure occurs in innovation processes  to strengthen strategic management with best practices on how to better direct organizational efforts to manage failures properly, by reducing negative effects and improving the re-design of new goal-setting  directed to maintain the strategies of firm in the right direction to pursuing competitive advantage in turbulent markets.Keywords. Innovation Failure, Failure Analysis, Innovation project, Innovation Design, Goal Failure, Monitoring, R&D Management, Task Choice, Failure Management, Organizational learning.JEL. D81, G32, O31, O32, O33