Here's Why So Many Companies Fail In The 'Innovation' Economy

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What does it mean when the leader of an innovation consulting firm calls the very word "innovation" a cliche?

Mike Maddock of Elmhurst, Ill.-based Maddock Douglas Consulting pointed out the oversaturation of the word "innovation" and offered attendees of the XChange Solution Provider 2016 in Los Angeles conference a clear formula Tuesday for what the word actually means.

The firm works with small to midsize businesses as well as large corporations including GE Healthcare, Philips Sonicare and General Mills. It provides services to aid companies in the development of innovation processes, developing company culture and differentiating customer experience.

According to Maddock,true innovation comes at the intersection of idea, experience and insight.Two out of three of those qualities are not enough, and could spell failure for an SMB.

"Two out of three is really, really bad," said Maddock. "In fact, this is why most companies fail when they jump into the innovation pool. This is why it happens. The difference between innovation and invention is that the inventors start with an idea and then go looking for someone that needs it. Innovators start with a meaningful market need, a gap in the market."

Maddock presented the audience with numerous cases in which companies missed out on big market opportunities because they were too hesitant or stubborn to pivot their businesses.