The 5 Biggest Barriers to Innovation and How to Overcome Them

Innovation can be complicated and can sometimes feel like an uphill battle for heads of innovation at large companies, but that can’t stop you from moving forward in the midst of constant digital disruption.

The Benchmarking Innovation Impact 2018 report by KPMG and Innovation Leader compiles information gleaned from 270 innovation, strategy and R&D executives so you can get a bird’s eye view of the state of modern business innovation and how companies pursue change.

This report includes a list of the top five reported barriers to innovation.

Understanding these barriers can go a long way toward helping you and your company navigate the innovation process, so we dove into each of the five barriers to clarify what they really mean, and how you can avoid them.

1. Politics/Turf Wars/No Alignment (55.1% of Respondents)

As a company grows, so does the complexity of its internal politics. This is why smaller startups often have an easier time innovating than larger corporations.

Implementing a new innovation program can require sweeping internal changes, meaning that some employee roles will change for the better, and others will change for the worse.

Illustrate how innovation as a whole and individual innovation initiatives can benefit the company, to pull everyone together on the same team. Click To Tweet

As such, people begin to think politically when the idea of organized innovation efforts come up. Those who feel threatened by the change might then actively work to undermine it.

Avoiding these issues can be quite tricky, and sometimes impossible, but there are a few things to keep in mind.

First, create an environment where people feel comfortable being open and honest. Many times, people will voice objections to a change, but remain silent on what truly drives their hesitation. In order to steer clear of rumors, hearsay and personal attacks, make sure everyone’s cards are on the table in order to even the playing field when advocating for innovation.

Also, be sure to illustrate how innovation as a whole and individual innovation initiatives can benefit the company, to pull everyone together on the same team.

2. Cultural Issues (45.3% of Respondents)

Risk and innovation go hand-in-hand. As the cliche goes, you can’t make an omelet without breaking a few eggs.

Innovation will inevitably lead to some failures, and for some businesses, any missteps are viewed as unacceptable.

Risk and innovation go hand-in-hand. Click To Tweet

This stigma of failure can slow down a company’s innovation processes, and in many cases even grind them to a halt. Considering that innovation can save a company by helping them to avoid becoming obsolete, this can be a big issue.

One great way to minimize risk aversion in an innovation program is by optimizing your proof-of-concept process. While this will not completely eliminate risk, it can allow your company to make informed decisions that will have a higher rate of success.

3. Inability to Act on Signals (41.6% of Respondents)

A large part of enacting an innovative new product, service or procedure is recognizing the need for the change in the first place.

KPMG states that executives identified the inability to act on signaled market changes as the third highest obstacle to innovation.

Businesses can sometimes stagnate in their past successes. They spend most of their time optimizing their current model and their current processes that they forget to take a step back and evaluate what is working and what is not in their industry.

This is how Uber surprised the taxi industry and AirBnB upended the vacation rental sector. These service companies recognized how their respective industries were failing to take advantage of the benefits of new technology and changing market demands, and they innovated to fill that void.

Make sure that your business has a dedicated innovation program with an established leader at the helm who has experience in the technical and/or business side of innovation, and the knowledge to recognize relevant trends.

4. Lack of Budget (40.8% of Respondents)

As innovation is an ongoing endeavor that often has long-term goals, it can be difficult to measure its impact. This can lead to a frustrating back-and-forth with those allocating the company budget because if innovation takes time to deliver, funds may be cut. But if innovation funds are cut, then it is virtually impossible to deliver.

According to the Harvard Business Review, the key to making your innovation budget a priority is to start small and to stop thinking about innovation as a one-size-fits-all undertaking. In the beginning, only start a few projects.

Don’t overextend your resources, but think of it as an investment. Once one of those smaller projects begins showing results, then you can slowly expand until you have a thriving innovation culture that cannot be stopped.

5. Lack of Strategy, Vision (35.6% of Respondents)

For many companies, the benefits of innovation are well understood. For those companies, staying relevant is important and they encourage disruption wherever possible.

However, that can also be part of the problem. Many innovation experts cited a lack of vision and strategy as one of the biggest issues facing potential innovators.

This is yet another reason why every innovation program needs a clearly defined leader who presides over a dedicated innovation department.

What companies need to avoid is having several different departments sinking resources into overlapping issues. It’s a waste of money, and a sure way to prevent any real innovation because every department will have diverging goals.

A dedicated innovation unit can streamline the innovation process and ensure that nobody is doubling up on the work and the research.

Fostering an Innovation Culture

Doing what you can to avoid these five barriers can help ensure that your business has the right atmosphere for innovation.

With that in mind, every business is unique, and there is no magic bullet or secret formula that can guarantee innovation success.

Several other less common innovation hurdles outside of these five are listed in the KPMG report, including a lack of executive support, inadequate recruitment and several others.

Truly knowing your business, flaws and all, can help you identify which issues are more likely to arise as you kick-start or expand your innovation program. Harnessing the power of innovation can complement an already good business and transform it into a great one.