Another Source of Organizational Inertia

Another reason organizations fail to invest in innovations is the difficulty of forecasting sales. It is hard enough to do sales forecasts on existing, mature products, much less on innovations that have never been sold before. In the absence of sales forecasts, the return side of an ROI equation is unknown, and an investment cannot be made rationally. If a forecast is calculated from market data, it remains risky because it lacks the commitment of salespeople accountable for delivering on it. And the propensity of rational salespeople will be to sell existing, mature products, rather than risking their compensation on innovations.

Tags: Business, Economics

Updated at: 27 February 2008 12:02 AM