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The Biggest Obstacles to Innovation in Large Companies

Here is an excerpt from an article written by Scott Kirsner for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here

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It turns out that the word “innovation” is not a Harry Potter-esque magical incantation that, once spoken, renders companies more inventive, creative, and entrepreneurial. The word can be uttered by a CEO speaking to employees or Wall Street analysts. It can be emblazoned on the door to a new innovation center in Silicon Valley. It can be inserted into people’s job titles. (Yes, even Toys R Us had a head of innovation.)

But there are thorny cultural, strategic, political, and budget issues that must be confronted by CEOs and other leaders if they want to ensure that their organizations can be hospitable to — rather than hostile to — new ideas.

In a survey fielded earlier this year for Innovation Leader, an online resource for corporate innovation teams of which I am editor, we asked about the most common obstacles to innovation in large companies. (To be constructive, we also asked about the things that foster innovation.) The responses, from 270 corporate leaders in strategy, innovation, and research and development roles, were illuminating.

We invited survey respondents to cite as many factors as they wanted from a list. The top five obstacles were each cited by at least one-third of respondents. They were:

Politics, turf wars, and a lack of alignment (cited by 55% of respondents.)

Some business units or functions believe they’re already doing innovation on their own, and that any sort of new initiative is edging into their terrain — and potentially competing for resources. Some may be hoping that the CEO’s “favorite child” of the moment, a new Chief Innovation Officer or Chief Digital Officer, will go away if ignored.

“Any time you start something new like [an innovation initiative], that cuts across many areas, there’s a potential for people feeling like you’re in their backyard,” says Michael Britt, a senior vice president who heads the Energy Innovation Center at Southern Company, a major utility operator. That’s especially true, he adds, when the core business is successful and doing well.

Senior leaders may not be able to squash every political squabble, but they can be clear about what the innovation or new ventures group is expected to do, and how others are expected to support it.

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Here is a direct link to the complete article.

Scott Kirsner is the editor of Innovation Leader, an information service for corporate innovation executives, and a long-time business columnist for the Boston Globe.

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