Breaking the ‘Big Bet’ Myth: How Sustainable Innovation Really Works

Table of Contents

• A More Effective Approach
• Case Study: Amazon’s Incremental Innovation Approach
• Final Takeaway
• Take the Next Step
• Sources

Innovation is a crucial driver of business growth and long-term success. Yet, many organizations fail to innovate effectively—not because they lack talent or resources, but due to common misconceptions about how innovation actually works.

One of the most common myths that derail innovation efforts is the belief that big bets always win.

The Risky Assumption That Bigger is Better

A “go big or go home” mindset remains deeply rooted in corporate culture. Many companies believe that breakthrough innovation requires massive, high-risk investments from the outset to succeed. However, this approach often leads to significant challenges:

• Hidden Problems: When substantial resources are committed to an idea early on, teams may feel pressured to present it as successful, avoiding disclosure of underlying problems until it’s too late.
• Sunk Cost Trap: Large projects often continue past their viable lifetime simply because so much money and effort have already been invested.
• Riskier Future Innovation: When big bets fail, leadership becomes more reluctant to fund new initiatives, ultimately stifling future innovation efforts.

A More Effective Approach

1. Build a Balanced Innovation Portfolio

Companies that sustain innovation success allocate their resources across a diversified portfolio:

• 70% on core business improvements (enhancing existing products, services, and processes)
• 20% on adjacent opportunities (expanding into new markets or customer segments)
• 10% on transformational initiatives (high-risk, groundbreaking innovations)

This approach ensures that innovation efforts maintain a balance between stability and disruption, reducing overall risk while still allowing for breakthrough opportunities.

2. Establish Clear Scaling Stages

Instead of committing large investments upfront, companies should use a structured process that increases funding only when validated evidence supports it. A structured approach might look like this:

• Start small with low-cost experiments (~$10,000) to test key assumptions and gauge early signs of potential success.
• Scale up to pilot programs (~$100,000) only when initial experiments provide solid, data-backed validation.
• Commit larger investments only when there is compelling evidence of long-term viability.

This approach minimizes wasted resources and ensures that only the most promising ideas receive significant funding.

3. Encourage Smart Risk-Taking

Too often, companies reward only successful innovations while discouraging risk-taking through a fear of failure. Instead, organizations should:

• Reward teams for learning and applying insights from both successes and failures.
• Promote a culture of experimentation by recognizing well-designed tests, even if they don’t lead to immediate wins.
• Focus on building an environment where learning and strategic iteration are embraced, rather than fearing failure.

“The biggest risk is not taking any risk. In a world that’s changing quickly, the only strategy that is guaranteed to fail is not taking risks.”
— Eric Ries, entrepreneur and author of The Lean Startup

Case Study: Amazon’s Incremental Innovation Approach

A prime example of a company that successfully debunks the myth that big bets always win is Amazon. Rather than making massive, high-stakes investments in a single innovation, Amazon consistently experiments with small-scale pilots before scaling up. For example:

• Amazon Web Services (AWS) started as a small, internal cloud infrastructure project before evolving into a multi-billion-dollar industry leader.
• Amazon Prime began as a simple two-day shipping experiment before expanding into a full ecosystem of services, including streaming and grocery delivery. Today, Amazon Prime boasts over 200 million global subscribers, contributing significantly to Amazon’s recurring revenue model.
• Amazon Go cashier-less stores were initially tested in select locations before scaling up. However, in 2023, Amazon announced plans to remove this technology from its U.S. Fresh grocery stores, replacing it with Dash Cart at over 40 locations. The Dash Cart allows customers to scan items, connect to shopping lists, and check out seamlessly.

Amazon CEO Andy Jassy addressed these changes in February 2023, stating,

“We’re experimenting in these stores to find a format that resonates with customers. We’ve decided not to expand Fresh stores until we get that equation right.”

By following a structured, iterative approach to innovation, Amazon has mitigated risk while continuously driving groundbreaking advancements.

Final Takeaway

The notion that large-scale innovation bets always pay off is a flawed and risky strategy. Instead of concentrating all resources on a single, high-stakes initiative, businesses should:

• Cultivate a diversified portfolio
• Implement staged investment decisions
• Foster a culture where smart risk-taking is valued

By abandoning the “go big or go home” myth, companies can drive sustainable innovation while avoiding unnecessary failures.

Take the Next Step

Want to take your innovation strategy to the next level? Book a discovery call with Accolade Coaching and learn more about our Innovation Creator Program, powered by the Strategyzer platform.

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Sources

• Strategyzer
• Statista
• CNN Business