The success of a corporate innovation program is often determined collaboratively, involving various stakeholders—each with their own priorities and interests. C-suite executives, department heads, business unit leaders, and investors typically focus on how innovation impacts the organization’s financial performance and market position. To set your innovation team up for success, it’s critical to understand these dynamics, align goals, and communicate effectively. In other words, corporate innovation programs often fail because they are disconnected (or perceived as disconnected) from core business objectives.
1. Misalignment: innovation team’s goals vs. business unit’s goals
One of the most commonly cited reasons for the failure of corporate innovation programs is the misalignment between innovation team’s goals and business unit’s goals. This misalignment could stem from siloed working style, i.e. the lack of collaboration and communication across departments, and poorly defined priorities or KPIs.
For example, a business unit may be after increased short-term sales, while the innovation team focuses on developing disruptive technologies or new business models that require long-term investment and timeline to yield returns. This disconnect can lead to inter-organizational tension, questions of resource allocation, different KPIs (quarterly revenue growth vs. successful pilot projects or patents filed). While both pursues may have merits and roles to play, in this scenario, innovation initiatives will not receive the backing they need at the evaluation table, and business unit teams would not see the case for innovation team’s work.
Why does this matter? A business can only move forward if all of its parts move in the same direction. To achieve alignment in your corporate innovation programs, you could consider:
- Foster cross-functional collaboration and communication: set up dedicated channels, regular sync-ups, joint workshops.
- Create cross-functional teams that include members from both the business unit and innovation team, or appoint a dedicated “innovation liaison” to consolidate and translate priorities. For instance, Google’s Area 120 innovation lab brings together employees from different departments to work on experimental projects, ensuring alignment with broader business objectives.
- Set shared KPIs to incentivize teams to collaborate.
2. Inadequate resources and management support
Many corporate innovation efforts fail due to insufficient resources and a lack of leadership buy-in. Without managerial support, innovation teams struggle to secure budgets, talent, and tools.
Leaders often hesitate to invest in innovation because of perceived risks or unclear ROI. To counter this, innovation teams must build a compelling business case that demonstrates the potential value of their initiatives. Some steps organizations can take are:
- Provide coaching for Innovation leaders to equip them with the skills to articulate the business case for their projects.
- Start small with pilot projects (low-risk experiments) to demonstrate the value of innovation before scaling. For example, Unilever’s Foundry program tests small-scale innovation projects with startups before integrating successful ideas into the broader business.
- Highlight success stories: share examples of how innovation has driven growth in other organizations.
3. Bureaucratic hurdles and slow decision-making
In corporate innovation, speed could be critical. However, overly complex processes and too many gatekeepers can stifle progress. Long approval cycles and unclear roles can delay innovation initiatives and frustrate teams. These are typical examples of red tape in corporate innovation work.
How to overcome this, organizations could:
- Clearly define roles and responsibilities in the innovation process.
- Streamline decision-making, i.e., simplify approval processes and empower innovation teams to make decisions within clear guidelines. Spotify’s “Squad Model” gives small, autonomous teams the freedom to experiment and make decisions without waiting for top-down approvals.
- Use agile frameworks to accelerate innovation cycles and adapt quickly to changes. For example: IBM uses agile practices to reduce development time for new software products.
4. Failure to leverage technology and AI
In today’s fast-paced world, failing to leverage technology and AI is a missed opportunity. Automation can handle repetitive tasks, freeing up teams to focus on strategic work.
For example, corporate innovation software like Innopipe can automatically pull out all tech startups and companies that answer an organization’s needs, removing the need for manual searches across various databases and keeping track of them on spreadsheets. NLP tools like IBM Watson or Google Cloud Natural Language API can quickly analyze customer feedback and categorize them into themes, while Crayon or Kompyte can provide real-time insights into competitors’ activities.
Additionally, with AI developments, it is nowadays possible to quickly look up academic research articles with keywords relevant to your project and ask AI to summarize their key ideas or suggest related studies. Teams can reduce hours of manual work to tens of minutes.
With clear benefits, one may wonder why organizations fail to adopt these tools in their innovation efforts. Common barriers are: the team’s lack of awareness or expertise in emerging technologies, and organization’s resistance to change. These need to be addressed in order to catalyze the use of technology in improving innovation work.
- Invest in training and education, e.g., organize regular workshops and seminars to educate employees about new technologies, enable team members to take online courses, and facilitate internal knowledge sharing.
- Build a culture of innovation
- Work with change management
- Consult experts and leverage partnerships with academic and industrial institutions as well as technology vendors to stay ahead of the curve. For example, Pfizer partners with universities and startups to accelerate drug discovery using AI and machine learning.
Setting your corporate innovation programs up for success
Corporate innovation is fraught with challenges, but by addressing misalignments, securing resources, streamlining processes, and leveraging technology, organizations can set their innovation teams up for success. The key lies in fostering collaboration, demonstrating value, and embracing change.
In Part 2, we’ll explore some other factors that stand in the way of successful corporate innovation efforts. Stay tuned!
What are the challenges you’ve met when working with corporate innovation? Help us by responding to this short survey.
Related read: