In a challenging economy, companies are focused on costs, but they want the big-bang results of disruptive innovations without spending the money required. They have not prioritized innovation, they don't have a strategic approach to it, and they have a low tolerance for risk.
These companies are seeing their competitors taking off, often with big innovations, but don’t know how to respond. They may try approaches that just produce a lot of small ideas that are not going to help them break out.
I work with companies that may have, for example, two kids’ brands. Consumers don’t know the difference between them. The company needs the brands to stand out from each other and in the marketplace. Otherwise, they risk cannibalizing each other.
This happens often after an acquisition. The company has been growing five or 10 percent, and the new owner says, "I want to grow this business 30, 40, 50 percent." You can’t get that kind of growth by just doing what you’ve done before, only a little better.
Health care companies, for example, are always worried about legal and regulatory issues. Other companies use systems such as stage-gating, which sets up various numbers “gates” – concept scores, cost of goods, etc. – that innovations must meet.
If they can’t get through a particular gate, the project can get killed. That makes it very hard to do big innovations.