10 Signs That a Company Struggles with Innovation

by Stefan Lindegaard

10 Signs That a Company Struggles with InnovationI recently did a workshop where we got into a great discussion on issues that can hinder innovation at a company. Among many, I especially took notice of these 10 signs that a company struggles with innovation.

Let me know what you think and please add other signs.

  1. Unclear strategy for innovation: There are no short or long-term goals on innovation or they have not been communicated well enough.
  2. Lack of process: There is no process on how to develop an idea or a concept.
  3. No entry point for external contribution: External contributors have no clear entry point for their input. They are forced to rely on personal contacts.
  4. People are empowered, but not enabled: Employees are asked to make innovation happen, but in reality they do not have the decision-making power for this and thus decisions are pushed up.
  5. No smartfailing process: Failure is inevitable, when you push the edge. Learning from failure processes needs to be in place.
  6. No time for personal development: Employees are simply too busy to reflect and thus think of new ways of doing things.
  7. Defensive mindset at legal: The legal department is too busy focusing on minimizing risks rather than working with the other functions on creating new opportunities.
  8. Lack of encouragement/feedback: Employees that submit ideas do not get proper feedback on what happens with their ideas. They do not get proper recognition either.
  9. Gap between research-thinking and non-research thinking: The different business functions need to better understand each other in order to maximize the output of their innovation efforts.
  10. The HR function does not get innovation: If HR does not understand innovation, it becomes difficult to hire the right people and create proper development programs.

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Stegan LindegaardStefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

No comments

  1. You mentioned HR and Legal, but I would add sign #11:

    “The CIO reports to the CFO, not to the CEO.”

    In the C-suite, the CIO often times can be the best source or resource for innovation (after the CEO). When the CIO reports to the CFO, it is clear that that company views their entire IT function, including the CIO’s role, as nothing more than a cost center.

  2. Great list – I recognise them all! I would add “No defined pathway or resource to develop ideas”. I have seen a large organisation start to generate some great ideas through their creative processes, but as these processes were set up with no regard as to what would happen when a good idea was generated, there was nothing to “catch and develop” the great ideas which then withered on the vine and were forgotten. It is important to nurture the whole innovation eco-system!

    Related to this I might also add the dangers of “The Innovation Initiative”. Too often a sub group is sent off with the brief to “Tell us how to be more innovative”. This group is then sent into a corner, separate from the business, with no resource, time or direction and are basically doomed to failure. This failure then creates organisational antibodies to innovation – “See, I told you it wouldn’t work, now let’s get back to our core business”

  3. I Will not add any more because the list is comprehensive. I think it may be better to add experience based perceptions to the list. Mine are India centric and based on working only with small business venture funded start ups and for NON profit organizations.

    The fundamental observation is that most clients seem to have a short term need for Batch Innovation (ideas for a specific new initiative) and not necessarily to create an innovation culture.

    1.Unclear strategy for innovation: I find that this may be due to the word innovation being overused so much. Few know WHAT innovation is and what is it that they seek? As a buzzword, Innovation seems to be sought when anything NEW is to be developed. Therefore most seek out innovation consultants for getting ideas for there BATCH NEED, rather than for getting their managers to learn ; how to think innovatively.
    2. Lack of process therefore follows.Few realize or expect that Innovation is a facilitation process and not just a passive learning. Most company managers are used to consultants who spoon feed them with ideas which they can implement and claim as their own. Since they are paying; they expect the external resource to “deliver ideas” for their batch need.
    3. No entry point: Since the company does not know the deliverable; there is no entry point for an external contributor.
    4.No smartfailing process. Empowerment is essentially fiscal and discretionary. While there is claim of empowerment by both employer and manager; there is little fiscal authority. There is thus little acceptance that failure is an obvious part of innovation.
    5.No time for personal development. Since Innovation inputs are sought mainly for NEW developments there is negligible demand for innovative thinking to become a skill set for routine work.
    The company must want to create/develop an innovation culture/environment BEFORE trying to become innovative.

    ALL stake holders must be present during innovation workshops. Most companies are erroneously trying to create isolated “innovation cells” who have little empowerment, are not responsible for the implementation. They thus have no deliverable responsibility beyond “good ideas”. Innovation inputs have little meaning if they are not implemented, and hence employees who are “sent to attend innovation learning or seminars” come back with ideas that they cannot implement. Many companies have mentioned that they have an excess of ideas and the CEO now has a big file called “good but pending unimplemented initiatives”.

    We have thus over the years learnt and now seek to start only if the following are present:
    a) There must be an acknowledged challenge/problem for which they seek innovative solutions and hence there is a deliverable.
    b) Only implementable ideas (generated by the team) are to be the focus.
    c) All existing resources are identified, carefully listed and considered as the total resources available. This includes all what may not be currently used, considered useful or currently classified as waste.
    c) All stake holders must be present so that the creation of an implementation matrix is part of the delivery.
    d) If the process produces the above then there is a BUY IN with the managers .
    e) ONLY After the buy in, it is advised to create innovation as a culture and then develop the formal process for them to use on their own!

    For many who are evaluated to be “innovation-negative” ( now your list should save even more time) we then sell the concept of BUYING INNOVATION. This requires a team/cell to be created which GOES OUT TO SEEK INNOVATORS working on their areas.
    This gets resistance from operating managers but rarely from TOP MANAGEMENT!

    Thanks for making our work easier. I hope some of the above helps.

  4. Great post, thanks!

    The list is pretty complete, the only thing that I could think of that isn’t already mentioned, but that is peripherally related to #2 is “incomplete execution”: imagine a scenario where great ideas are gathered but the opportunities they represent are not seized, for whatever reason (lack of process, funding, stakeholders etc.).

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