Successful innovation is key to financial performance, and getting it right is now more important than ever as we look forward from the pandemic.
According to McKinsey, companies that focused on innovation in past crises delivered superior growth and emerged stronger postcrisis, outperforming the market average by more than 30%.
But despite investment in innovation labs, incubators, and accelerators, companies often don’t get the results they expect due to a variety of barriers. At Netguru, we wanted to dig deeper into what these barriers are and help find ways to overcome them.
Our recent Disruption Forum Innovation Labs gathered more than 800 attendees registered for the event, and more than 4000 people watched selected sessions live on social media around the world.
So we took the opportunity to learn about innovation challenges worldwide and asked the audience to vote on what they felt the biggest barrier to corporate innovation is. Here’s how they responded:
Leading by a significant margin, more than a third of participants felt that culture and silos are the greatest barrier to innovation. 18% of them cited a lack of vision or strategy as the greatest barrier, and almost 13% felt that it was limited time, budget, and resources.
Throughout the event, innovation experts from top brands like Mastercard, Citi Ventures, Deutsche Bank, Roche, Sanofi, and HSBC shared their point of view on what works and how they are handling the many challenges to successful innovation.
We also reached out to experts in a range of other companies who shared some excellent insights and learnings.
EMEA Head, D10x at Citi Ventures
Validation is great, but invalidation is also great because it saves a lot of time and money spent building the wrong thing that nobody wants.
The ones [design sprints] I love are the ones where you get a really strong response. People either love it or they hate it. I think the stuff that's in the middle is often more problematic.
Head Business Model Innovation at Ivoclar Vivadent
One thing that really helps is to focus on minimum viable products because this can create a shared success story for all departments involved.
Once you have a successful minimum viable product, you can keep on growing the baby. But you need to focus on communication and be aware of what your silos are able to digest.
CDO and Head of Digital Strategy & Solutions at UNIQA Insurance Group
You need a sense of urgency. If you look at, for example, a war room or a task force, everybody cross-functional is on board. They have one goal – to survive. Urgency also makes people rethink how they work today and how they might work better tomorrow.
It's not easy. It needs a lot of C-level support, and it needs a cultural discussion mindset where you go into it, talk it out openly, and it must be transparent what you're doing.
Global Head of Innovation, Finance & Risk at HSBC
When managing risk, you want to eliminate failure. When innovating, you actually want to promote failure – you want to learn fast and learn from your failures. If you're not failing enough, you're actually not being innovative.
Producer at Empire Entertainment Japan
The biggest barrier to corporate innovation is lack of vision - the absence of leadership with a vision, the courage to challenge the old ways of thinking and adopt new ones as well as sharing this vision with the stakeholders and employees, encouraging and enabling collaboration and participation.
Director, Products and Innovation at Mastercard
As the organization becomes bigger, it's very difficult to manage the silos being formed – even if they are close to the agile methodology, they have their own agile mindset, which is separate from other parts of the organization or other business units.
Co-Founder & CSO at bsurance GmbH
Based on the learned culture, agile and fast project management is feared by some people and departments in such a way that they cannot recognize the advantage of an externally supported innovation process or project. This leads to a loss of speed or, in the worst case, a project that is never implemented.
Managing Director at zeb.applied
The biggest challenge to corporate innovation from my point of view is overcoming the lack of entrepreneurship or entrepreneurial spirit. The decision set needs to change from: is there one person in the organization who is skeptical about the endeavor somehow more towards: is there one person in the organization who is rationally enthusiastic about it.
Management Consultant at Sia Partners & Company
The biggest barrier to corporate innovation is C-Suite ROI buy-in. This is clear at legacy large corporates versus smaller, more nimble organizations.
Concurrently, corporates have ample funding for new projects, so they can often afford multiple innovation portfolios. The next challenge is timelines, meaning larger entities take time to approve new projects, whereas agile firms are able to launch new products quicker and easier. These factors combined basically form the ROI question.
Head of Corporate Innovation at SIGVARIS GROUP
Corporate silos and culture are major hurdles for successful innovation. There are many ways to respond to it. One factor can be distilled: people and the individual. Individuals shape the culture of an organization. Innovation is fostered by consciousness, an entrepreneurial mindset, and trust.
PhD, IT strategy practitioner
Innovations are not about business or organizational improvements. It is not about doing old things in new ways. An innovation’s result is always unknown. The goal and real value of innovations is verified knowledge coming from successful or failed projects based on market tests and experiments. From this, we can fastly find out whether the way we take will lead us and our business to the new quality.
Top managers’ understanding of the difference between regular business goals and innovations’ nature is often a barrier to developing a real creativity culture at companies.
The mission of innovations is gathering knowledge about clients’ real needs by quick verifying of our previous assumptions and turning them into a confirmed knowledge.
Founder of Crunchmoms
The biggest challenge to corporate innovation is the organization's ability to make bold moves and take big enough risks in budgeting and resourcing to make a significant change to its business model.
To truly create value that will disrupt an industry or business, a new business model can only be identified if you're willing to make significant shifts that will change the fundamentals of the place. Stay close to target customers, don't expect quick returns, and get buy-in from the top immediately.
Head of Technology & Architecture at LATAM Airlines
Companies need to have a clear vision of their influential role in the industry and to discover their competitive differentiation to get the best business advantage. A specific culture is needed to create market disruption, visionary products, and excellence in customer experience.
Flexibility, collaboration, creativity, data analytics, design thinking, experimentation, agility, a good understanding of customer behavior, and expectations and knowledge of new technologies are key factors in achieving continuous innovation. The top management has to be enthusiastic about this mindset and promote this culture.
Regional Director DACH at Qualco SA
In financial services, you constantly need to navigate between customer needs, technology, and regulation. To innovate and meet customer needs in new and convenient ways, partnering up with fintechs is crucial.
Fintechs focus on customer needs based on technology offerings, usually less restricted by legacy systems and regulation. That creates fertile ground for innovation.
For a deeper look into all aspects of innovation, including more tips and advice on overcoming the barriers, check out Disruption Forum Innovation Labs. You can get on-demand access to all sessions by signing up here.