Difference between revisions of "What are the major obstacles to innovation in a company"
Jump to navigation
Jump to search
SHenderson (talk | contribs) (Created page with ' Future of Innovation Main Page') |
|||
| Line 1: | Line 1: | ||
One CEO summed up his companys dysfunctional approach to innovationsuccinctly We say innovation is our top priority, but we dont effectivelyallocate our time, resources and efforts to walk the innovation talk. Other | |||
executives tell us that the reasons their companies arent effective innovators arethat innovation is risky; the urgent (quarterly earnings) drives out the important(innovation) and we punish innovation failure but dont reward innovationsuccess. | |||
Weve all heard statements such as these that indicate that many CEOs dontknow where to turn to overcome a variety of innovation barriers. While anecdotalexamples of successful innovations abound, the reality is that most companiesare not good at innovation and few understand what it really takes to build asustainable organization-wide competence for innovation. | |||
Based on a combination of our extensive experience during the last 10 yearshelping companies develop a core competence in innovation and on the resultsof a recent in-depth innovation survey1, we at Strategos have three key pieces ofadvice for companies that aspire to be successful serial innovators: | |||
Dont just treat the symptoms. The obstacles most executives identify,such as the ones quoted above, are merely symptoms of a deeperinnovation problem. For real traction, you need to act on their root causesfound in four areas: leadership behaviors, management processes, peopleand skills, and culture and values.<br> | |||
Dont only act on one root cause. It can be tempting to only focus on oneunderlying issue, but companies that want to become truly good atinnovation need to act systemically in all four areas action in one area alone wont yield sustainable success.<br> | |||
Dont blindly copy best practices. Instead conduct an innovationdiagnostic to pinpoint your companys specific innovation issues andopportunities, learn from the ways others have addressed similarchallenges, and build a tailored action plan to address your companysmost critical issues.Major obstacles to innovation symptoms and root causesIn the Strategos survey of innovation practices of more than 550 largecompanies, an overwhelming majority of respondents in every industry ratedinnovation as critical and said that the importance of innovation would grow in thefuture. However, most respondents were critical of their companies innovationeffectiveness for example, only 19 percent said their companies walked thetalk on innovation, and a majority rated their companys innovation effectivenessbelow average.<br> | |||
The top six obstacles to innovation identified by respondents were consistentacross industries:<br> | |||
Short-term focus.<br> | |||
Lack of time, resources or staff.<br> | |||
Leadership expects payoff sooner than is realistic.<br> | |||
Management incentives are not structured to reward innovation.<br> | |||
Lack of a systematic innovation process.<br> | |||
Belief that innovation is inherently risky.<br> | |||
When respondents discussed their attempts to address these obstacles, itbecame clear that they were dealing with them piecemeal rather than in asystemic way. For example, some organizations sought to make theirmanagement incentive plan more innovation-focused, but couldnt sway theirleaders from focusing their energies on the latest cost reduction exercise. Othersdedicated more people to innovation but failed to get time and attention from the line organization. Others put an elaborate innovation process in place, butdidnt reward innovators and business leaders for innovation successes.<br> | |||
Many approaches to innovation only address the obvious symptoms of acompanys innovation problem. For example, if scarcity of ideas seems to be theissue, a common tactic is to hold more idea generation sessions. If resourcesappear to be the problem, then a standard solution is to appoint an innovationteam to carry the innovation effort forward. If lack of process is a concern, thenfirms often implement a stage gate process. While many of these suggestionshave merit in their own right, our work has shown that to become a successfulserial innovator, you need a systemic approach that addresses all four underlyinginterrelated root causes of innovation ineffectiveness --leadership andorganization; processes and tools; people and skills; and culture and values. Without a systemic attack in all four areas, your innovation efforts arelikely to fail or at best to produce a one-time gain that wont be repeated.<br> | |||
1. Leadership and organization.<br> | |||
In our survey, among the companies who walk the talk of innovation, 80 percenthave leaders who frequently reinforce the importance of innovation versus onlyeight percent among companies that are happy to be followers. Many companymission statements list innovation as a core value. But when executives ask onlyabout daily sales, the latest headcount reduction project, or the improvements ininventory turns, guesses what their people focus on? As one of the respondents toour innovation survey said: Executives that are serious about innovation think | |||
about it, demonstrate its importance through their actions, and then follow through to make sure it gets done. Innovation without follow-through isresources wasted.<br> | |||
The CEO of a large aerospace service provider provides a good example ofappropriate leadership behavior. He realized that his leadership team wasspending too little time on growth and innovation issues. He then ordered the | |||
entire senior team to meet over the course of 10 days to discuss only innovationand strategy issues until they developed a shared understanding of their growthstrategy, understood its implications and resolved associated resource concerns.Since then, the executive team has held regular venture council meetingsfocused only on growth opportunities, and leaders are evaluated based on theirsuccess in meeting growth objectives. The CEO personally holds his leadershipteam accountable for putting the dollars he has earmarked for innovation to gooduse. | |||
Of course, walking the talk of innovation needs to go beyond the CEO. But thatis where it has to start. Without this leadership, innovation efforts are doomed tofail.<br> | |||
2. Processes and tools.<br> | |||
In many companies we have worked with, people are told to go innovate, but they are not given the processes and tools they need to succeed. Other companies go the other extreme by implementing rigorous processes that | |||
squeeze the life out of would-be innovations instead of nourishing good ideasinto better ones. As a chemical company executive once told us we have agood New Product Development (NPD) process, but we are not getting results ineither size or number of opportunities. The company had become so caughtup in their stage gate process that they had lost sight of the outcomes. Peopleeven stopped submitting new ideas for fear of having to fill in the paperwork(their process required filling out over 50 documents). | |||
Our experience suggests that good innovation processes share the followingcharacteristics: <br> | |||
Allow divergence and exploration at the front end. This helps ensure thatthe new ideas generated arent simply a re-hash of what has been donebefore.<br> | |||
At Best Buy, members of the innovation team built new business conceptsbased on their hands-on experience of observing consumers behave intheir normal habitats.2 Best Buy realized that with the proper tools andguidance, anyone on the team could collect the insights that would formthe basis of its new businesses. Teams were empowered to conductstudy missions in the most atypical places. To expand their customerview beyond the typical young techno-centric male customer, Best Buyemployees visited the American Girl store in Chicago and learned how the store provided a destination for girls and their mothers. And to understandthe frustrations of less tech-savvy consumers, they went to the Amishcountry in Indiana and to the poorer neighborhoods of Mexico City. The | |||
result? Hundreds of new ideas in Best Buys innovation pipeline whichstretched the existing business model in new directions to newconsumers, to new shopping destinations and to new services. | |||
[[Future of Innovation Main Page]] | [[Future of Innovation Main Page]] | ||