The Saboteurs of Your Innovation Initiatives

The Obvious Saboteurs of Your Innovation Initiatives

The conference room was thick with disappointment. For six months, this talented development team had designed, debated, and developed a next-generation platform that was to be a bridge between a universe of entrepreneurial partners and customers and the Fortune 50 company that had contracted the agency to build it. But now, just a week into the new quarter, the client pulled the plug on the project. What went wrong? That’s what the team now gathered to discuss. 

Scenes like this happen in corporate meeting rooms every day. Projects started with great ambition and seemingly clear intent go off the rails with remarkable regularity. In fact, the late Harvard Business School professor Clayton Christensen is often credited with the estimate that 95% of new product innovation projects fail. While that number continues to lead search results, a closer look suggests fail rates for corporate innovation over the last 5 to 10 years hover between 70 and 90%. Still, with failure rates that persistent, it’s no wonder that product teams more often gather for a postmortem analysis than they do for a post-launch champagne toast.

These postmortems are intended to surface the decisions and actions that lead to those failures, and they do shine a light on obvious barriers to success. We call these the tangible blockers. 

Tangible blockers are easy to spot because they are, well, tangible. And because they are easily identified, these tangible blockers grab the lion’s share of our attention. The obvious blockers to innovation - resource constraints, inability to clearly define customer needs and deliver business value, technical constraints, prioritization of core business demands, and the lack of cross-functional collaboration - take on outsized responsibility for the failure of innovation initiatives because the blame is obvious. If only we had more budget. If only we had more technical expertise. If only we simplified the design. These “tangible” blockers are easily identified, and so they get most of our attention and most of the blame.

But here’s the thing: Our experience and research suggest that tangible blockers account for only about 40% of project failures. 

Some innovation projects are doomed from the outset. “The top reason for project failure is the project itself,” write Montclair State University professors Te Wu and Ram B. Misra in the Harvard Business Review. “Wrong projects defy business rationale, creating outputs that few people want, add little to no value, or undershoot their goals because they are so difficult to achieve.”¹  

It’s often the best of intentions that doom innovation. A tug-of-war for resources to support current product lines, a masterful idea championed by a chief executive, or prioritizing today’s interests over tomorrow’s opportunities. These well-intentioned business decisions can create misalignment and drive companies to build the wrong product for the wrong market.

Competing for Resources in the Budget Cycle

Most often, innovation initiatives exist in the realities of transactional budget cycles and business objectives. They must compete for finite resources while the core business is pressured to grow. “We are burdened with the success of our run-rate business,” one client told us in a familiar lament. “It is difficult to invest outside of our core business when you have the pressure of double-digit growth.”

Even the most compelling concepts struggle to gain traction without the capital required to bring them to life. Too often, leaders are left to “innovate off the side of their desks,” as one colleague put it. They are forced to pull limited resources from the core business while trying to build new products.

The Influence of Executive Pull on Innovation

A significant barrier to innovation is C-Suite bias. Top executives exert outsized influence on the direction of projects, often without a deep understanding of innovation management, product development, technology, customer requirements, or market dynamics. While these projects may be well-intentioned, they receive disproportionate funding and attention, not because they align with customer needs, but because the executive has the authority to make it so.

This executive pull introduces blind spots into innovation strategies. Promising projects that could resonate with customers and drive long-term growth are often deprioritized in favor of executive projects or trend-chasing initiatives. Executive pull can introduce additional bias into innovative strategies, too. An executive might, for example, presume the company’s brand is stronger than it is or believe the organization has technical prowess it doesn’t have. Perhaps the executive is overconfident that customers will adopt these pet projects and over invest in initiatives that lack real market demand or are too complex to implement effectively. In this environment, valuable market opportunities are missed and teams become demoralized and disempowered as their expertise and insights are disregarded.

Prioritizing the Core Business

Many organizations focus heavily on maintaining and growing their core business, as they should. Yet too often, that core focus comes at the expense of new and innovative ventures. This over-prioritization of existing operations limits the time, resources, and attention teams can dedicate to exploring greenfield opportunities—those new and uncharted areas with the potential for future growth. While optimizing the core business may generate essential and immediate results, overfocusing on the core hinders long-term growth and innovation. In a rapidly-changing market, companies that neglect emerging market opportunities become vulnerable to disruption by more agile competitors.

Legacy Systems as Barriers to Innovation

It goes without saying - yet here we are saying it - that product innovation relies heavily on technology for its success. Yet perhaps surprisingly, technology often proves to be the greatest barrier to innovation. Many organizations rely heavily on legacy systems. In fact, as much as 50% of IT workloads remain on-premise. These outdated systems are expensive to maintain and lack the agility needed to integrate with cloud services, AI, or advanced analytics. Security and compliance requirements block experimentation. Technical debt sucks up resources that could be allocated to greenfield projects or future-facing initiatives as teams work to maintain outdated systems. 

Innovation, then, is stalled by technological inertia, forcing organizations to focus on maintenance rather than new developments. No product strategy will achieve its full potential without addressing these technology blockers. Building - and in many cases re-building - an organization’s technical capacity is a prerequisite investment in a sustainable innovation strategy. 

Back in the conference room, our development team had quickly churned through the tangible blockers that torpedoed their project.

After the project had been awarded to the team, they said, the client disengaged. It was difficult to get sign-off on design decisions, and with deadlines looming, the developers forged ahead. As the project progressed, the team recognized that the “entrepreneurial partners and customers” who were to be served by the platform represented a very wide range of needs, needs that didn’t always align with the products and services the client wanted to sell. Reconciling this design disconnect had quickly expanded the scope of the project. But the real death knell came when the client missed its quarterly projections and went on a cost-cutting rampage. No project, the team concluded, could survive those obstacles.

They weren’t wrong, of course. Disengaged leadership, product-market misfit, scope creep, and budget cuts are a toxic combination for any project. Satisfied that their post mortem had identified the cause of death, the development team brought the meeting to a close with assurances they had learned some valuable lessons and were better prepared for future challenges.

But were they?

The post mortem effectively processed the tangible blockers, the visible 40% that puts every project at risk. Sure, they would handle that 40% better in the future. But what about the 60% that they didn’t see? What about the Intangible blockers? Did this team - and so many like them - miss something important that might have affected the outcome of the project had they even known to look for them?

Without a doubt.

Curious to learn about the 60%? Follow us and check back next week to find out what you may be missing. C/R Strategy Partners works with transformational leaders to make the right growth bets and set the conditions to win them.

Note:

C\R Strategies works with transformational leaders raise innovation performance by identifying signals faster, aligning teams and capital, and building sustainable, repeatable capabilities. To learn more, follow us on LinkedIn

References:

¹https://hbr.org/2023/11/how-corporate-purpose-leads-to-innovation#:~:text=Researchers%20estimate%20that%2070%25%20to,evidence%20those%20numbers%20are%20improving.