Tag Archives: innovation barriers

Barriers to Innovation

Our previous post identified the “innovation dilemma” faced by many organizations. Continuing on that theme, our experience and research into barriers to innovation surfaced three paradoxical observations:

Lack of Time or Too Much Time?
Many organizations cite the lack of time and attention to innovation as a major barrier. People are too busy to think about innovation. “If my boss’s boss is too busy to think about new and better ways of doing something, I
better be too.”

This is a good recipe for keeping things exactly the way they are while the world passes by.

But dedicating resources to innovation does not seem to work that well, either. It may foster a creative environment, but this does not necessarily translate into more workable innovations. One organization created an innovative think tank with 12-14 people led by a senior executive. After two years they were disbanded because while they came up with some innovative ideas, none of them were financially viable.

Similarly, Xerox created an inventor’s paradise, Palo Alto Research Center (PARC), assembled incredible talent, big budgets, and freedom from oversight by senior management back East. They envisioned a great number of wonderful things, but that did not enable them to bring these visions or prototypes to market. Many of their greatest ideas were brought to fruition by other companies.

Too Much at Stake
Innovation requires risk taking, and large, well-established organizations simply have a lot on the plate to risk.

When the large financial information firm, Bloomberg, was a small start-up with a few big ideas, the founders carried their prototype via taxi over to Merrill Lynch, their first customer. The computer had only partial functionality and nowhere near the required reliability — yet. But the risks of not bringing it out, of waiting until everything was in order, exceeded the risks of showing the product, even with some flaws remaining and some features not quite built. The meeting went very well, and the rest is history.

But when a well established company with a broad customer base introduces a new product, expectations are quite high and risks must be carefully weighed. Each potential innovation must be considered and evaluated in light of the existing portfolio of products and commitments. Innovation becomes much more complicated and difficult.\

Similarly, managers at middle or high levels in an organization often have completely different risk profiles than they had in their twenties when they were just trying to make a name for themselves. For middle management, the costs of introducing a bad idea can far outweigh the costs of not introducing a good idea, and they become risk-averse.

Consider the impact of risk-aversion when the number of great ideas is a function of the total number of ideas. When it comes to innovation, the win/loss ratio is meaningless. All that matters is how many wins you have. And the number of wins varies with the number of tries. As Thomas Edison once said about his long journey toward a working light bulb, “I have not failed; I just found 10,000 ways that didn’t work.”

How many incomplete or unworkable ideas must one consider to find a real winner? Quite a few. Yet at what ratio of rejected ideas to accepted ones do people decide to keep their heads down and continue doing things the way they have always been done? Little wonder innovation is so hard to come by.

“Too Much of a Good Thing”
We cannot innovate with too few ideas, but can’t get anywhere with too many. Innovation requires a well disciplined process as well as a fast flowing stream of ideas. An organization needs to have an effective way to
pivot from idea creation to sifting, sorting, choosing, and doing. Ideas can get in the way of deeds, and effective innovation requires both.

In our next post we will share some ideas for overcoming these and other barriers to innovation.

Innovate Much?

Almost everyone we ask says they want to be innovative; and it is a well accepted concept that the best returns come to those who are first to market with a new product, process or solution.

It is a straightforward conclusion that a competitive advantage will be yours if you can provide better quality at lower costs, achieve breakthrough improvements, or if you create a management system or culture that constantly is clicking on all cylinders.

But how often do these things actually happen?

The Innovation Dilemma
Innovation is challenging for all of our organizations: large and small. Each new “frontier” is fraught with peril and risk… with each new idea inspiring both hope and worry. In fact, in our experience and research, we find that there is an “innovation dilemma” that makes innovation truly enigmatic:

  • Large organizations have more wherewithal to invest in systematic innovation, but smaller organizations seem more capable of capitalizing on innovative ideas.
  • Most innovations come not from visionaries at the top but from people closest to the work. Yet paradoxically, strong leadership and vision at the top of the organization are required to create an environment that fosters innovation and risk taking. Without strong leadership, organizations become bureaucratic and risk-averse.
  • Outsiders often have the most innovative ideas, but insiders’ know-how and buy-in are required to get them implemented.

So, with these challenges in mind, our next couple of posts will take a closer look at some of the barriers to innovation as well as ways to overcome them.