No matter how large or small, innovation challenges are essential hurdles to overcome. No business idea or model stays popular forever. In changing markets, the ability to adapt, change and come up with new solutions is essential.
That said, a company’s internal organization can often be one of the largest challenges of innovation. A business that isn’t culturally, structurally or mangerially prepared for enablement will do the exact opposite: discourage and prevent. In other words, one of the biggest innovation problems in business can often be the business itself.
What are the challenges of innovation?
There are many innovation challenges in business, but we want to focus on the 7 most common: the biggest innovation management challenges you will find in most businesses struggling today.
1. Impatient Leadership
Innovation of all forms takes time. In many ways, it is an investment with long term returns. However, when a company’s leadership is eagerly prioritizing fast returns, some of the most important innovations can get overlooked or dismissed relatively quickly.
Such innovation problems are worsened when you consider the fact that the cheapest and quickest innovations sit relatively close to the current product or solution. And the closer they are to current practices, the less impactful they are, the quicker they become outdated, and the less worthy of the term “innovation” they end up.
In the long run, jumping from small innovation to small innovation can feel uncomfortably similar to an organization simply trying to keep up with the times. Meanwhile, competitors investing in key, strategic innovations that pay off much later are often ready to take advantage of the larger opportunities.
2. Lack of Innovation Culture
A rigid and traditional management model can also be one of the biggest challenges in innovation and creativity. After all, even if the company is willing to embrace and invest in new ideas, what good is it if the majority of the organization isn’t able to bring such ideas forward?
Many managers view new ideas with fear. Innovation is often seen as a distracting or otherwise removing resources from today’s pursuits of profits. As a result, time is prioritised to maximise current tasks as much as possible, with no space for innovative thinking or creative problem solving; management is based on current performance, so the future is always pushed back.
Worse yet, these key skills are often not encouraged at all. Fresh insights are an invaluable driver for innovative solutions, but many organizations will not invest in training or development. The most skilled engineers can’t create market-changing products overnight. Companies need to invest in a culture that both encourages and exercises these vital skills.
3. A Fear of Change
Being innovative means doing something different. With established companies with longer histories, this often meets strong resistance internally.
In such situations, innovation usually comes from the fringes: areas of the business that aren’t tied to the core model. Thus, while they have the freedom to be creative and to explore new spaces, such sidelined teams are not valued throughout the company, often dismissed as fanciful or extreme proposals.
This is where a fear of the new and different often takes hold. When the company holds firm to how things are normally done, how different such ideas are or, as discussed early, how the proposed investments move too far from the established model, such innovative teams can find themselves without support – and, in addition, without internal funding.
4. Lack of Ownership
One of the most pressing innovation challenges, for any business, is determining who is responsible. Without responsibility or ownership, there’s no impetus to succeed.
Here, however, we often face the duality of the business innovation challenge: while innovation cannot be exclusive to one department, there must nonetheless be an owner of innovation.
Just as the IT and digital technologies lead to the rising prominence of CTOs and CIOs, organizations also need people to own the concept of innovation. This is more so important for innovation; an owner needs to defend long term investments, or ideas that are still unproven, amidst the typical focus on short term profits and growth.
The ideal solution for this is to appoint a dedicated position; a role that works higher up in the structure, as a part of the management team, able to access all departments and ensure proper enablement (in turn, growing the previously mentioned innovation culture). Yet businesses with impatient leadership and a fear of change are, unfortunately, very unlikely to appoint such roles – such a position would be too much innovation in and of itself.
5. End-to-End Processes
Ideation is just the first step in the innovation process. After such ideas are established, there must be numerous stages of development, testing and refinement. Ideas need to be validated but not all will succeed. This is often viewed as a vast use of time and money, with no guarantee of success. And as we established earlier, the focus on profits and immediate goals means that more secure ROI strategies will often take priority.
Yet a great idea that lies undeveloped has no market potential. Likewise, skilled teams can’t build on new ideas if they aren’t developed. Innovation in this area is in many ways a form of research and development. Companies need to be willing to give the time and resources to ensure it happens, without implementing gates that rely too strictly on proven market results, being open to accept the fact that the new product or solution may never reach the global audience.
6. Inadequate Benchmarking
When focusing on the here and now, companies have a wealth of benchmarks to compare to. They can, for example, look to simply exceed this year’s KPIs, or even look to their competitors for a like-to-like comparison. All of these will ensure the organization stays competitive, but innovation is focused much more on the future and such benchmarks will fail projects before they’ve had a chance to succeed.
Sales and revenue metrics can often be one of the largest innovation challenges in business – every idea gets tested for market validity before the process even begins. More so, an organization-wide culture of chasing KPIs can prevent teams from even having ideas; solutions that that don’t have immediate KPI value will be dismissed, or not shared among their communities.
Before companies can assess its value, each idea must be weighed against the problems it’s trying to solve. Unique ideas require unique variables.
Of course, such variables need to be agreed on; even in innovation, it’s easy to chase vanity metrics. This is where the wider process of development and testing (see our previous point) alongside an owner of innovation (who can ensure such concepts are tested and assessed fairly within the company) are absolutely essential.
7. No Innovation Ecosystem
Finally, innovation is about new concepts, many of which often come around through the sharing of ideas and knowledge amongst different teams. Consequently, a silo-driven culture is a huge business innovation challenge. After all, a company that can not cooperate within itself can’t share new ideas.
Put this another way: when every team is isolated – or worse, pushed to compete internally – they will focus on many of the above problems: chasing their own KPIs, ensuring high performance to look good for the board and ultimately not bringing anything potentially controversial, new or risky to the table.
This is the very same reason startups and younger organizations favour hackathons and special ideation sessions. Organizational isolation is one of the biggest creativity and innovation challenges. An ecosystem ensures every department has a role to play. As a result, every department helps to secure funding and push new innovations forward to develop new ideas and solutions that can make a real change in the world.
How to Solve Innovation Challenges
There are many ways to solve the aforementioned innovation challenges, but there’s one clear theme throughout: enablement. When leadership is afraid or unwilling to invest resources and time, it denies a bottom-up culture where new ideas are free to be generated, tested and brought forward.
In the opinion of experts, the biggest problem is, as in many cases, the company’s management. People on top need to be innovation leaders to their communities that can implement the new approach to innovation challenge.
Especially this year, in the era of growing importance of digital economy due to the covid pandemic, organisations need to learn how to develop innovative, digital solutions that will be empowering them in this rapidly changing world. The challenge is to do it efficiently.
Repetition and complacency are the enemies of innovation. These changes can take time, but it all starts with a decision from the top to retain some resources and time for solving new, forward-facing or even unusual problems.
So, are innovation challenges easy to overcome? Probably not – in the opinion of experts, most companies still operate in an old-fashioned way and have a tendency to reject innovative ideas as too risky. But the world is changing and we just have to adapt – and the major step in this adaptation process should be the openness to innovation.
This article was created by MIT Enterprise Forum CEE. Want to know more about the MIT EF CEE Startup Accelerator? Check out how our program can help your startup grow!