Can you innovate too much? After all, new ideas fuel organic growth. One would think an organization would be happy to have as many ideas as possible.

But not always. Here are scenarios where over-innovating might be considered too much of a good thing.

1.  When you are over-positioned: Too many good ideas could lead you to an extreme position in the market where you stop earning at the middle and bottom ends of the market. Most companies crave the premium end of the market, but overdoing it can backfire.

Example: Cincinnati Children’s Hospital Medical Center has done such a great job at innovating in its domain that it’s considered in the top three U.S. children’s hospitals. Therein lies the problem. The local market may see Cincinnati’s Children’s as so advanced and innovative that parents are reluctant to take their kids there for routine health issues – bumps, bruises, fevers, and so on. It becomes the place to go only when their child is sick with a deadly disease – cancer and the like. Fortunately, the hospital recognized the risk and took measures to stay competitive for routine visitations.

2.  When you are under capacity: Generating new ideas puts pressure on an organization. New ideas must be evaluated, filtered, and developed. This takes time and resources. People are distracted from their regular day jobs and they feel overwhelmed. Too many ideas may exceed the organization’s capacity to make sense of it all. Idea fatigue sets in

Example: A major player in aerospace wanted to create a new digital app solution for its customers. The app was intended to retrieve sensor data from aircraft components and relay it into a useful smartphone application. The team slowed to a near halt. It had collected several hundred ideas from many different sources and consolidated them into a massive database. The team couldn’t possible manage the abundance of ideas and it was unable to move forward.

3.  When you stray from your core: Over-innovating may be keeping you too busy to seek new ideas where it counts the most – in your core competencies.

Example:  Kodak deployed way too many innovation resources to its technical skills around chemistry, fluid, and photography. Kodak missed what was happening to them. While Kodak was a highly innovative firm, it failed to innovate around its non-technical core competencies: consumer insights, design, system integration, and customer loyalty. Had it developed and innovated around these, it could have used them to enter virtually any category.

4.  When you drift off strategy: Generating too many ideas creates temptations to move in different directions. White space and adjacent markets start looking attractive when you are holding a handful of great ideas. But this, too, can derail an organization and cause it to move away prematurely from a market strategy that has been fueling growth.

Example: A major health care conglomerate in the medical device space wanted to expand to an adjacent market. It selected the anesthesia market, and it bought a bundle of intellectual property to gain entry. It wanted to enter the market with the most advanced anesthesia machine of its kind. But the project consumed so many discretionary dollars and human resources that it drowned the main businesses that were funding it.