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5 Common Reasons Organizational Innovation Fails And How To Avoid Them

Posted by Mark Hemmer on 4/18/16 10:00 AM  | 
Mark Hemmer
4 minute read

Organizational Innovation

Every business is going digital. They don't have much of a choice. Technology is forcing businesses to reevaluate their most basic functions or risk falling behind permanently. That may sound extreme, but consider this stat from a recent TechCrunch article:

"When you consider that 88 percent of the Fortune 500 companies in 1955 are now gone, it’s not hard to see that change has always been with us, but the rate of change is accelerating dramatically due in large part to the disruption brought about by digital transformation."

Transforming an entire organization is a big ask. Organizational Innovation requires change at every level, from every employee. It's not surprising that some companies fail to hit the mark.

Here's a look at 5 common reasons Organizational Innovation fails and things to keep in mind as your business navigates a world of disruption:

1. Innovation is Forced

While technology has forced innovation to the top of priority lists, innovation itself has to happen organically within the enterprise. If the right atmosphere isn't in place, innovation is reduced to a buzzword.

OneFire's Director of Innovation Harsh Shah said, "Innovation has to be a positive thing. Just because your title has 'innovation' in it, it doesn't make you innovative."

Placing someone in charge of "innovation," then sitting back waiting for it to happen makes that person's job impossible and keeps your company mired in misguided convention. Innovation needs to be promoted and nurtured company-wide. It's also important to put a process in place. As with any part of a business, direction is essential to seeing results. "Go do the innovation!" is not enough.

Putting a repeatable framework in place can guide your company's innovation efforts and a develop the right mindset to be applied across your business.

what's the fix?

Put a process in place that elevates ideas and allows for organic innovation.


2. People are Afraid to Fail

With how some businesses operate, it can sound false, but it is true: people are the most important part of your business. People are prone to all types of emotions. When it comes to being tasked with innovation, the prevailing feeling is fear. Innovation and failing often go hand-in-hand and most employees in most businesses have learned that 'failure' is never acceptable.

While employees across the company are being asked to rapidly adopt and learn new technologies (which is an overwhelming obstacle by itself), those tasked specifically with innovation are being asked to transform the company completely. Unless it has been clearly communicated otherwise, employees are going to believe that failing is going to land them on the unemployment line (or at least in the doghouse). That fear of failure is crippling innovation. It leads to only safe ideas. Safe ideas and ideas that lead to transformation are rarely the same.

"You have to reward innovation. Because you will fail. People are scared to fail. For every 10 ideas that fail, one succeeds. You have to foster failure. Failing leads to success. Failing has such a negative rep that people are afraid to fail," said Shah.

What's the fix?

Embrace failure as an important step toward success.


3. Culture Sabotages Innovation

Enterprise culture isn't conducive to innovation. Over the years, businesses develop standards for how each department should run. Those standards aren't very flexible (as anyone who has worked in an office can attest to). In fact, when questioning policy, one of the most popular management comebacks is "that's the way we've always done things." What happens when you're asked to rethink all of the ways you've always done things? Resistance. Negativity. Red Tape.

That kind of culture doesn't promote innovation. It promotes stagnation. But there are blueprints for what a successful innovation culture could look like:

"Being innovative is like having a Hackathon every week. Start from scratch, have a deadline. It is ok to fail. Enterprise needs hackathon culture," said Shah.

'Hackathon' culture is open-minded, loose, and collaborative with all participants pushing toward one goal. For innovation to take hold in the enterprise, companies need to follow the examples around them.

what's the fix?

Foster a culture of learning and collaboration.


4. Innovation Happens in the Dark

While Labs and Incubators are a successful driving force in organizational innovation, there needs to be a clear means of moving those pockets of innovation into the heart of the business:

"The issue with the lab or incubator concept is how you move the kind of innovative thinking from that internal innovation test bed into the organization at large. The reasoning behind isolating innovation was sound enough, because those fledgling ideas would very likely be sucked up into the vacuum of existing business policies where they get lost forever in a haze of bureaucratic negativity," said Ron Miller for TechCrunch.

If innovation is tucked away in a dark (and forgotten) corner of the business, it's going to have an uphill battle affecting the big picture of the organization's future. Whether you go the lab/incubator route or integrate your innovation efforts another way, it has to be factored into the company's central function and aim. If not, innovative ideas might be born on one side and never make it across the bridge.

what's the fix?

Know how innovation will be implemented from Day 1.


5. Unclear Vision

Vision for what an organization is and what it will be comes from the top. How executives approach organizational innovation determine how the rest of a company's employees will receive it. To position a business for successful innovation, an executive has to part ways with traditional ways of running a company. 

Most traditional businesses have a hierarchical culture that values a top-down structure. Innovative businesses are collaborative, placing more emphasis on teamwork than title. Instead of focusing on finding the cheapest way to get the job done, innovative businesses will focus on finding, cultivating, and keeping talent.

In almost every way, executives must shift their approach to meet the needs of their shifting business. For some, the way they've been doing it is too ingrained. Instead of serving their company as the sail that propels the enterprise forward, they become the anchor that keeps it stuck in the sand.

what's the fix?

Empower executives who embrace change.


Successful Organizational Innovation is uncommon and now you know some of the common reasons why (and how to fix them). Businesses of all kind now have to adapt to the changing enterprise climate.

Innovating isn't a trend. It's the only way to survive.


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Topics: Innovation