Innovation Program Pitfalls


To build an evidence basis for five innovation program pitfalls (e.g., strategic misalignment, lack of resources, lack of governance, lacking business model, and a lack of a diversified workforce) and provide ways that they may be avoided.

Early Findings

  • Price Waterhouse Cooper performed a 2017 evaluative study, which found that 54% of business executives struggle to align innovation strategy with business strategy.
  • Further, 65% of the companies included in the study that invested more than 15% of their revenue in innovation strategies reported aligning business with innovation strategy as their top management challenge.
  • Innovation strategies may be categorized into three, main categories: need-seeking, which leverages insights on customers' needs to generate new ideas; market reading, which improves upon products proven to be successful within the market; and technology driving, which leverages technology capabilities to develop new products.
  • It is critical that executives are clear in their communications about the strategic approach for their innovation program and ensure that the innovation strategic framework connects back to the overall business strategy of the organization.
  • A lack of resources, either financial or human capital, may lead to a block in innovation programs; therefore, it is essential for businesses to emphasize the importance of innovation to executive leaders and to lobby for more resources.
  • Garcia-Quevedo, Segarra-Blasco, and Teruel's (2017) paper confirmed the correlation between financial constraints and probability of corporate abandonment of innovation projects among Spanish firms; however, an important distinction is that this abandonment probability is higher among companies perceiving external financial constraints and that internal financial constraints significantly impact innovation programs only at the conception stage.
  • Innovation centers, which are increasingly being funded by companies to generate innovation strategies, are at risk for failure due to the lack of governance and company cultural cohesiveness.
  • A 2018 study by Capgemini’s Digital Transformation Institute found that while governance metrics were strong during the early building phase for majority of innovation centers, by the time of establishment the number of centers reporting strong governance had dropped down to a third.
  • A lack of support from senior leadership has led to a risk for innovation programs to be sidelined in favor of other strategic priorities for companies.
  • A lack of diversity in opinions from workers, particularly if certain members are selected for strategies based on preferential treatment, may lead to a blockage in innovation for companies.
  • To mitigate this problem, companies must hire a diversified workforce and ensure that all members are encouraged to contribute their unique opinions.

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