Behavioral Innovation: The Need to Pivot, Why We Don’t and What We Can Do About It

Innovation is crucial for the success of modern businesses, but many startups fail to pivot their business plans, leading to failure. Behavioral innovation may hold the key to understanding why some businesses pivot and others don't. The sunk cost fallacy of innovation is a major contributing factor to startups not pivoting, which occurs when a new business follows an idea over the financial cliff because they have invested our time and effort (and often money!). It is important to know when perseverance no longer makes sense, and this is when it's time to pivot. A new field of research called behavioral innovation is emerging, but at the moment, it suffers from having its main theoretical framework copied and pasted from behavioral economics.