The findings from this Nielsen report, "Secret to Successful New Product Innovation: Keep the Boss Out of It", ring all too true, and are worth considering if your company creates, wants to create, or is struggling to create products.
Two key points from the report:
Why would this be the case? There are numerous possibilities, but many will likely involve corporate politics, "group-think", "power and control" issues, and people focused on the wrong areas. Remember, your Senior Management should be very knowledgeable of the field in which you do business, but are generally tasked with operational responsibilities -- not directly on R&D, market research, customer support, etc. Furthermore, without a clear process for product proposals, funding, and re-investment, good ideas might be battling for funding against lesser ideas from someone with more political power.
So how do you solve it? You'll have to look at the operational shortcomings of your own organization; But the solution likely involves a proper Product Management group, and an open product proposal, review, and funding process. It may come as a surprise to many, but the role of Product Management is to focus development (and product creation) on the right products, based on market needs (identified via market research.) They uncover opportunities, evaluate fit, and get solutions to your customers.
Too often, Product Management is run incorrectly (or non-existent) which might be behind the findings of the Nielsen report. If anyone in the company (Product Managers included) is basing product strategies on their gut feel -- you're gambling. If you're in the Invention Business, that's fine. Just acknowledge that you're guessing.
Having a clear, open process for product proposals is equally, if not more important. This is how you suppress favoritism and personal agendas. It also allows you to leverage the wisdom of your full organization (e.g., internal crowd-sourcing and peer-review.) In my experience, transparency in product funding is a major area of contention since it "takes away" power from Senior Management (even though having this power hurts the organization.)
If you're expecting new product innovation and your organizational operations aren't specifically designed to foster it, it's time to get serious or quit kidding yourself.
Related reading: "Innovation and Entrepreneurship" by Peter F. Drucker