Challenges with Innovation

What is innovation?

“Innovation is a concept, refers to a process or individual organization that undertakes to conceptualize new brand products, process or ideas or to approach the existing products, process, and ideas in new ways.”(Purcell, 2021)

Why is innovation critical for business?

With the ever-changing technology and competitiveness, it is a do-or-die for many organizations to be innovative and change to remain in the competition. The three main factors that make the organization embrace innovation are

Organization’s growth

It needs to build new products and processes that bring new revenues to grow organically. Though it is a slow path for growth, this incremental change will change the business model and make them more tuned to the customer needs. Improvement in the process and cost reduction helps to grow operational margin and strengthens the business model by adding new core capabilities.

To stay relevant

Innovation helps an organization to stay relevant by adapting to technological changes. Digital transformation is helping organizations to reinvent and modernize their core practices. For example, cloud computing brings opportunities by reducing time to market, investing less in CAPEX, and being easily scalable and highly available.


Innovation brings differentiation and adds value to the brand through products. For example, Apple differentiates itself by bringing simplicity to its products. Embedding the invention in the core process helps the organization stay relevant, meet the customer needs, differentiate itself through products, and build a competitive advantage.

Key Challenges

From the above details, it is clear that innovation brings modest growth to the organizations and defends from the competition. But what stops the companies from creating the environment that makes innovation? According to the (White, 2015) and survey conducted by Imaginatik’s some threats are

The wrong culture

If the company culture is more political, bureaucratic, and non-functional, it is highly likely to bring stifle to innovation. In this environment, the space for the experiment and failure significantly kills innovation. Even though the teams come up with the ideas, there are not enough systems to act on the idea. If creation feels out of place, it will be tough to bring change.

Lack of follow-through

For some companies, innovation is part of the roadmap and initiatives, but they fail to create synergies and scaled practices of the innovation lifecycle. The bottom line is that lack of follow-through will make employees fizzle out and fall to gain traction.

Limited funding and resources

When coming to yearly budgeting, large companies follow the framework of innovation portfolio by segmenting budgets in core/adjacent/transformational initiatives, spending 70% budget in transformation segments. While some companies with less R&D budget like retail, hospitality, and financial services, the innovation funds are below $1M. They do the development work or train the employees on innovation without much impact.

Lack of alignment

Some business units in the companies are way ahead of the innovation where they are utilizing advanced technologies and tools to foster innovative products. Some business units are behind because of a lack of alignment and resources among the business units. This turf among the business units demotivates the employees in bringing the ideas to the table and leads innovation to die quickly.

Lack of time

Change in large companies always feels foreign because they tend to cut across workplace habits and practices. And, instigating change on a large scale requires time and focus. With the innovation, the outcome may take further time to evolve than expected or planned.

Low Adoption rate

People come up with the ideas, but employees fizzle out quickly, figuring out how to enact them with their day-to-day process. Some innovative programs get off to a great start, but a lack of belief in the approach leads to abandonment soon after. Some feel sceptical or weary because of past failures and poor performance.

Overcome challenges

Leadership buy-in

Leaders need to build the environment around experimentation and a fast to failure approach to feel inclusive and to test the creative ideas without fear and restriction. Leaders should empower employees to use the latest technologies and tools to support innovation.

Growth mindset

Leaders should stress the importance of lifetime learning and the promise of unlimited advancement. They should understand the infinite improvement learning brings and differentiate between the good and great, being more adaptable to the change.

Functional business units

Companies need to build functional business units comprised of the departments instead of the business units that come together as cross-functional teams to solve the user problems. This enables collaboration and diversification to formulate solutions.


In a world where change is inevitable, companies need to build products and services that meet the customers and stay competitive. A couple of challenges that the organization faces are lack of business unit coordination, lack of follow-through, and wrong culture. To achieve sustainable, inclusive innovation, leaders need to adopt a growth mindset and build self-sufficient functional business units that stay relevant to competition.


Henderson, T. (2021, December 10). Why Innovation Is Crucial To Your Organization’s Long-Term Success. Forbes.

Purcell, W. (2021, May 28). The Importance of Innovation in Business | Northeastern University. Northeastern University Graduate Programs.

White, S. K. (2015, October 22). 7 big threats to innovation and how to overcome them. CIO.

Desjardins, J. (2020, July 2). 10 Types of Innovation: The Art of Discovering a Breakthrough Product. Visual Capitalist.

S.K. (2018, July 30). The Most Commonly Cited Barriers to Innovation in Large Companies? Internal Politics. Harvard Business Review.




Seasonal product manager with strong experience in management consulting, and Product management.

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Raviram Maddimsetty

Raviram Maddimsetty

Seasonal product manager with strong experience in management consulting, and Product management.

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