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10 Reasons Corporate Innovation is an Oxymoron

About 80% of new businesses fail within the first 18 months. And when a company tries to innovate, the more bold and out-of-the box the project is, the more like starting an entirely new business it becomes. You can probably put two and two together. Corporations practically represent the antithesis of innovation in the current zeitgeist. 

It's not that large companies don't have the money, or the desire to create breakthroughs or disrupt markets, but rather a much more complex confluence of structural issues, institutionalized thinking, and -- well, red tape. Still, if the big dogs want to avoid disruption from smaller companies and instead be that disruptor, they'll need to have a strong push towards a system that works.

So here are 10 reasons that corporate innovation tends to fail more often than not. Do you find yourself or your company being described here?

  1. Departments tasked with “innovation” aren't given appropriate goals and criteria, so they aren't actually working on major transformations. The process is not well-defined, so the results are messy and people aren't held accountable for real change. The project is not easily replicated.
     
  2. Innovation teams often work by consensus, rather than by collaboration. Consensus requires everyone to agree and slows the process down immensely. Collaboration means taking everyone's point of view into consideration when making a decision – often made by just a single person.
     
  3. Innovation is hard, and many companies don't have the resources or talent to develop a creative, experimental lab that can produce actionable ideas over a long period of time.
     
  4. Financial forecasts only work for fairly small changes, and they can't predict the impact of groundbreaking innovations. This makes it hard to get feedback on new ideas.
     
  5. The customer experience is not taken into account enough when trying to imagine the response to a new product or technology. Market validation needs to be considered.
     
  6. Innovative and daring projects don't get the funding they need if they threaten “core” operations. There is always plenty of inertia to keep doing things the same as always. It's easier, and doesn't require much thought to just keep trudging along.
     
  7. The business model and culture is left up to managers, but it's not really their job. The spirit of innovation needs to come from the top of a company down.
     
  8. The goals of real innovation are confused with an incremental improvement. People end up focusing on building a better product, rather than designing a better way to accomplish whatever task that product performs.
     
  9. Most people look to the past to predict how the future will be, hampering visions of a new way of doing things. People (and corporations) are naturally risk-averse.
     
  10. The innovation sector of a large company doesn't always sync up with the rest of the business. It ends up being hard to follow up on any successes because the different departments aren't aligned in their goals.

Coming up with an innovation today isn't easy, but it's what we need to solve our most pressing problems. Check out the HeroX Challenges Page to see if any of the contests speak to you – the world is waiting for your bright new ideas!

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