The Top 5 Barriers to Organizational Innovation

The 2018 Benchmarking Innovation Impact report gathered powerful perspectives regarding why new projects fail. The report surveyed 270 innovation, strategy, and R&D executives with the objective of identifying the top barriers to organizational innovation.

The top 5 of these barriers are below. By understanding what they are you can take measures to safeguard against them.

#1. Internal Politics—55%

Ever wondered why startups deliver outstanding innovation, while tenured organizations sometimes struggle to innovate? The smaller an organization is, the more aligned the team is. Everyone is working together toward a common objective. It’s new and exciting and the potential is unlimited. There is also nowhere to go but up.

As organizations grow, it can be difficult to maintain the original alignment. Non-aligned hires slip through the cracks, the culture begins to erode with rapid growth, and sometimes original team members become territorial. If not properly managed, this can lead to counterproductive internal politics and turf wars.

Innovation requires change, and change can further the already existing divides. So much so, that some team members may actively work to undermine a new objective—even if only by doing nothing.

Solution

There is no one-size-fits-all solution to eliminate politics and turf wars. Some would argue they are impossible to avoid. These best practices can minimize their negative impact.

Human Resources – utilize your HR

team to their fullest and listen to their guidance. This might include working with both an internal and external team for hiring, recruiting, and the as-needed unbiased third-party perspective. For startups, hire an HR team as soon as you begin to grow to ensure a strategic approach.

Open Communication – open communication includes empowering team members to voice their objections to change and innovation and

their underlying concerns. For example, a leader, team, or team member may object to another team’s innovative new product out of concern for their job security if their idea isn’t selected.

Value Proposition – to capture buy-in at every level, focus on the internal benefits for all. Sometimes we get so focused on solving a consumer need, that we forget our internal consumers—who are our lifeblood.

#2. Fear of Failure—45%

Risk and failure are inevitable so they must be managed proactively. Some projects will never make it to market, while others will have one or more roadblocks. Or will require you to pivot along the way.

When tempted to “play it safe” remember that it is risky not to innovate, as a more innovative competitor can pass you by.

Solution

Minimize Risk – you can drastically minimize risk by strengthening your proof-of-concept process, working within a project management framework, generating timely consumer feedback, and knowing when to let go. Since internal bias is inevitable, working with an external innovation maturity expert can help. The more informed your decision, the greater your rate of success.

Reframe Failure – by reframing failure as a learning and growth opportunity, you and your team will feel more confident to innovate and develop your new project, service, or process. When failures occur, utilize data to pinpoint where things went wrong, how to avoid similar mistakes in the future, and what the learning and growth opportunity is.

#3. Recognizing the Need for Change—41%

The inability to recognize and act on signaled market changes is the third greatest area of opportunity. We can become internally blinded by products, services, and processes that are currently working that we forget to reevaluate their present-day relevance. The longer something has been working, the more difficult it is to recognize a need to change, evolve, or even shift gears.

A shining example of disruptive innovations that provided an alternative to products and services that had worked well for decades include Uber, rideshare programs, Airbnb, and the growing trend in short and long-term furnished rentals.

Your area of opportunity may not be as disruptive but can be as valuable. For example, almost every organization has fallen behind at one point or another in adopting or fully leveraging new and existing technology.

Solution

Leverage Data – put a system in place to monitor internal trends, external trends, and global trends that signal market changes. Thanks to modern data and analytics software, this has never been easier. The objective is to first identify the trend, and then the need for change.

External Insights – from keeping a close eye on your competitors to attending industry events and working with third-party specialists. For example, you likely hired an outside expert during your pre- or post-pandemic digital transformation process.

#4. Insufficient Resources of Time or Budget—40%

Allocating time and resources is a delicate balance. While you must not overextend your budget and resources, you must invest enough to bring each project to life.

If the budget, timeline, or number of team members and specialists allocated to a project is too tight or inflexible—you aren’t giving the project or your team a fair shot.

Solution

Expect the Unexpected – build in a small cushion. While the sooner the better is true, focusing too heavily on timeline or budget can compromise quality. You want your team to stay on time and on budget, but unexpected roadblocks are inevitable. Again, this is a balancing act. Curating reasonable creative constraints will help.

Innovate in Phases – by phases, I’m not just referencing measurable milestones, but phases that you can Beta test or gather consumer feedback. Your tests and feedback phases alert you to areas of opportunity early on and provide ongoing viability checks.

#5. Inadequate Strategy or Vision—35%

Creating original and disruptive innovations can be so exciting that sometimes we dive all-in, trusting our teams to do what they do best—even without a strategy in place.

This can lead to a variety of barriers. One of the most common is multiple departments or team members working on overlapping elements they should be working on together. Another common barrier is working without measurable milestones.

This mistake wastes resources and increases failure rates as each team’s vision may be different. It can also contribute to the politics and turf wars we discussed in barrier #1.

Solution

Designate a Project Lead – whether it’s someone from your innovation or R&D department or an internal project manager, there should be one dedicated person who monitors all teams and team members.

Strategic Partnerships – partnering with external R&D, Q&A, project managers, and innovation managers eliminate the “too close to see clearly” bias that you, your team, and project managers are likely to have.

Looking For a Strategic Innovation Partner?

If your organization would like to leverage the benefits of an unbiased innovation partner—we invite you to reach out to Idea Scale to discuss our services!