5 Ways Companies Unintentionally Block Innovation
Never Stop Learning with our NewsletterSubscribe
It seems like every business we talk to wants to innovate.
Now, we’re a technology company, so that may skew the sample size a little, but it’s safe to say that innovation is a buzz-worthy desire in most C-suites.
In a recent article, Deloitte did a nice job of depicting how the desire for digital innovation is moving across different C-level roles—CMO, COO, CEO, CIO and more.
While the study Deloitte did highlights how business leaders are looking forward at innovative ideas right now, it also discusses how most businesses have difficulty actually achieving this innovation.
Why is innovation so hard for companies?
Why is it that some business types use stark terms like “innovate or die,” while so many others fail to actually do anything innovative?
Thankfully, we have some answers to those questions, based on our experience, the Deloitte article, and also a terrific talk by Stephanie Miller at Digital Summit Charlotte last month.
Here are five innovation roadblocks your company must overcome in order to take a giant leap forward.
Silos and Territories
One of the big roadblocks to innovation also hinders countless other things, from data management to employee morale—silos. A business unit focuses exclusively on its KPIs and success, and doesn’t really care how that affects the rest of the business.
Every leadership expert will rail against this kind of organizational culture. But it’s especially dangerous when it comes to innovation. That’s because most innovation—especially digital or technological transformation—affects more than one part of the business.
Deloitte’s article was written to CIOs, but this principle applies to everyone: "Because the digital agenda likely has multiple owners, CIOs often must cultivate strong collaborative relationships with other business and functional leaders. CIOs are responsible for delivering technologies to help these leaders transform work processes that are often decades old—for example, connecting with CMOs to enable customer-centric technologies or COOs to implement the IoT.”
Last year, we worked with a Tier 1 automotive manufacturer on an innovation project for tracking engineering work on new projects. Working across the silos of engineers, testing labs, IT, and business analysts was one of the trickiest parts of the project. Even one bad apple could have caused scope to balloon or persuaded management to bail. Only by working for the good of everyone instead of an individual business territory could the project succeed. Thankfully, everyone worked toward the greater good, and the project provided to be a model of success for the entire international organization.
Satisfaction with the Status Quo
Sometimes, innovative ideas are shot down because of a belief that the way things are is good enough, or the way it will always be.
But this is usually a fallacy. Things are changing—all the more frequently in our rapid technological age.
Miller put it this way in her keynote: “It’s good enough. But so was Mapquest.” Of course, nobody uses Mapquest anymore. Things changed.
Sometimes, the status quo isn’t about denying change. It’s about failing to see the value of innovation. Companies either refuse to invest in new products or service, or they can’t structure their P&L in a way that moves them forward. Either way, that’s an acceptance of the status quo that will end up costing your business in the long run.
Innovation requires a mindset that does things that haven’t been done before. As a result, it often requires going against longstanding policies in your business. This may happen in terms of product development, or IT security, or in another area.
When an innovative project runs up against the policy, you need to decide whether to enforce the policy, give a one-time exception, or change the policy altogether. There’s no right or wrong answer here—but there is clearly a need to address policies in the quest to be innovative. So let down your guard enough to have an honest discussion about the value of the policy going forward in comparison to the value of the innovative initiative.
Sometimes company leaders thumb their noses at innovative projects because they don’t want to risk profit numbers or market share for existing products.
But protecting turf is the way down, not the way up. Think about this quote from the CEO of Blockbuster in 2008: Netflix doesn’t really do anything that we can’t or don’t already do ourselves.” Turns out, that turf wasn’t as safe as it looked. Not many people are looking to Blockbuster and chill nowadays.
Miller put it this way: If someone says “We can’t do that because it will eat our profits,” tell them the story of the iPad. That tablet did not kill MacBooks or iPhones—it established an entirely new product category that became a major profit center.
Sometimes the barriers to innovation in a company aren’t intentional. No one is lying in front of the tracks trying to keep the new bullet train (or Hyperloop) from coming through. But the roadblock is there all the same, because the ecosystem at the company doesn’t allow innovation to bloom.
A company needs to encourage innovation—whether with an 80/20 rule like Google once had, or a skunkworks division, or in some other way. Otherwise, you’ll start an innovation project so far behind that your innovation will be dated by the time it makes it to market.
Deloitte put it this way: "To execute their digital strategies, some organizations may require capabilities and resources that cannot be quickly cultivated internally. Ecosystems can create scale.”
Every innovation project isn’t advisable—but some will pay off big. So as your business evaluates innovation opportunities, you also need to proactively find and eliminate roadblocks so that you’re ready when the right moment comes along.