Why is it hard to innovate? what are the obstacles for innovation? Why innovation success rate is so little? This paper is aimed at discussing these questions on an academic level.
Referring to innovation as a change, sometime a major change, I shall first present the difficulties of promoting a change, in general. Kotter (1996) discusses the reasons for the high rate of failed change initiatives. Among them are lack of urgency/ too much complacency, lack of sensible vision/ under-communication of the vision, and other, leadership related issues. Obviously, the strongest obstacle to any change-of-direction is what known as the inertia, the virtual power that keeps moving at the current direction, and rejects any deviation from it. As Gary Hamel states it, "companies are toxic to innovation…
Most large companies have a change model that is essentially borrowed from poorly governed Third World dictatorships. The only way you can change them is with a coup"QUOTES BY Kirkpatrick, 2004.
When it comes to innovation, Tidd, Bessant, & Pavitt (2005) highlight it by the metaphor of "riding two horses", when referring to the innovator's dilemma. For being successful, firms should therefore, focus on "doing what they do, better". Nevertheless, Gary Hamel insists that "in order to remain resilient as a business, you really have to routinely innovate… Many companies are reaching the point where it will be impossible to raise prices, grow the top line, or even significantly reduce costs without innovation" (Kirkpatrick, 2004).
Another obstacle to innovation is the long time it takes (3-5 years), which is the average time a large corporate CEO expects a tenure (Kirkpatrick, 2004); this fact and the way CEOs are compensated, result in short-term thinking: "It's much easier [for a CEO] to take a restructuring charge that resets the performance bar, or to do a big deal, than to actually transform the company". Among the few exceptions, by Gary Hamel, is GE's Jeff Immelt, who has focused the company on innovation, because he plans to be in the firm at least a decade.
Gary Hamel lists few myths about innovation: that innovation is risky, that innovation is mostly about products, that innovation is about big ideas, and that innovation is about the top line – all these myths, Hamel argues, are questionable and challengeable. Yet, they do play as barriers to innovation.
Innovation is a process, as explained in other papers, and managing this process of innovation pose special difficulties and challenges, that requires specific management skills.