Barriers to corporate innovation and how you can overcome them

Almost every business I work with places innovation high on the agenda because everyone recognises that without it your business will stagnate, competitors will overtake you and your business will die.

There seems to be a plethora of information detailing what innovation is or should look like, yet many businesses still struggle with the concept and how to make innovation work within their organisation.

Here are five of the key barriers I have seen blocking innovation within the corporate context as well some approaches to overcome them.

1. The innovation black box

In an effort to innovate, many businesses make a critical mistake. They build what I call innovation ivory towers, which they silo off from the rest of the company. They pull their best and brightest into these towers and task them with innovating. In the process, they alienate everyone else in the business and in turn create an information ‘black box’. Ideation, development, testing, key learnings and other relevant information isn’t shared and there is no visibility of work being done. Only the final output of innovation efforts is shared with the wider organisation.

This creates a problem when it comes to accepting new ideas. Modern organisations are like bureaucracies. Change is anathema to them. It’s like an allergen getting introduced into the body. Innovation ivory towers separate your people from the change you want to make. That means they don’t recognise it and won’t accept it.

That’s the hurdle you have to overcome. To get past it, you need to create cross-functional teams that bring every group in the organisation together.

Cross-functional teams offer socialisation benefits. Each participant is a representation of the particular challenges you must overcome to innovate. These challenges become the constraints for your ideation.

I have a formula for this:

Good innovation = best innovation × organisational acceptance

This tackles the innovation for the sake of innovation issue. It also means that the organisation as a whole becomes more accepting of the change that you want to create.

2. Lack of customer empathy

It’s possible for barriers to form between your product developers and your customers. This can lead to developers getting a skewed idea of what their customers actually need. They instead focus on what they think their customers want rather than generating meaningful customer insights. In some cases, this leads to them producing updated versions of the same product. However in reality, this will not improve the lives of your customers¹.

To successfully innovate, a product development team needs to understand the following:

the job the product needs to do,
how these jobs solve the customer’s problems, and
insights into the context surrounding the customer’s problems.

There are several reasons why breakdowns can emerge:

Many organisations engage third parties to carry out consumer research for them. Or, they create special research teams within their organisations. This is understandable from the perspective of wanting to remove bias from the research process. But it only really works for quantitative research. The problem comes when you expand this to cover your qualitative research — which often uncovers people’s motivations.

Other organisations create a different type of barrier. Once a product reaches maturity, they create relationship management teams. These teams surround customers to maximise value. The problem is that this protection can act as a barrier too.

That last one is especially important. Third-party research and heavy-handed relationship teams prevent product developers from gaining customer insights. Thus, they became less empathetic to customer needs which are used as fuel for game-changing ideas.

3. No capacity to innovate

Most modern organisations have an efficiency-first mindset. Leaders want to get the most out of their teams while keeping costs as low as possible. Instead of innovating, they focus on maximising every product the business creates.

This worked well before the dawn of the digital age. Products and ideas had much longer shelf lives. Plus, disruption wasn’t as prevalent as it is in this day and age.

Unfortunately, the model falls apart today.

This drive towards efficiency means your product teams are at maximum capacity. They’re so focused on creating the product that they’re not looking at what they can do to improve. That means they don’t have the capacity to innovate.

That’s where many leaders create the innovation black box that I mentioned earlier. We’ve already covered the issues that causes.

Achieving agility and innovation means you need to change the efficiency-first approach. The goal is to build over-capacity into your system. This allows your teams to focus on innovation alongside the business-critical activities.

Incremental innovation² is a potential solution. This is where your team adds new features to existing products to account for consumer needs. These increments can also account for the disruption that the modern business world brings.

4. Innovation is messy

Another barrier I see is that many organisations fail to redesign for today. They commission research and conceptual work but the problem is that these concepts are often divorced from the reality of what’s achievable. The shiny design gets presented to the board and approved. Then, it’s sent to the people who have to turn the concept into a reality. Much head-scratching ensues as the concept’s ambition outstrips what’s feasible in the current landscape.

The concept ends up on the scrapheap as a result. There’s a general lack of understanding at play here as organisations don’t know how to conceptualise for the future while acknowledging what is possible at present.

Concepts need to go through a second process after they’re first presented. This process must focus on re-imagining the concept so that it benefits the organisation right now.

Redesigning for today does not mean reworking an idea either. That’s the efficiency-first mindset at play again. It’s not wasted hours on something that won’t work. It’s figuring out how to implement innovation based on what’s feasible now. From there, the concept can evolve into its future state. First and foremost, this means figuring out the first steps needed to bring such concepts to life in the future.

5. How long to persist

Eric Reis’ work with the Lean Startup Movement established the current best practices for innovation³. He built on the work of Steve Blanks to provide a model for building an MVP. The idea is that we only build what we need in order to test a hypothesis. That testing tells us if a product will succeed in a market.

The problem I’ve seen is that many organisations believe they can move through this cycle quickly. They only dedicate a couple of months, if not a couple of weeks, to it. That’s not how you build a successful product or service organisation.

I think this problem arises from a common misconception. Such organisations see the rise of companies like Uber or Netflix and view them as overnight successes. But that’s not the case. Most of these overnight success stories spent years in the market before achieving anything.

A true disruptive innovation creates a new market. That’s not something that you can short-cut. Attempting to fast forward through the MVP cycle creates a barrier to innovation. You don’t give yourself the time needed to truly test the service. That means you could end up abandoning something that shows true promise.

Innovation can take years to implement. That means it’s a constant iterative process of failing, learning, and rebuilding³.

Breaking down the innovation barriers

Each of these barriers on their own can prevent innovation within your business. Combined, they make it almost impossible. Overcoming them is the key to avoiding stagnation.

Ensure your product development teams empathise with your customer. Avoid the innovation black box scenario that makes it difficult for people to accept change. Build over-capacity into your processes and be conscious that the efficiency-first mindset hinders innovation.

It’s about achieving a balance between your future focus and what’s feasible today. Give your change the time to breathe and develop. That’s how you achieve a sustainable innovation culture.

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