The issue may be external or internal. Externally, new competition may be displacing their offering, or target audience sentiment may be shifting. Internally, companies can get too close to their business or become accustomed to operating under assumptions they need to challenge. And once a solution is found, often there’s not enough organizational buy-in.
Companies can develop great strategies on paper but execution fails when leaders don’t articulate a clear case for change and empower everyone to support the new direction.
They may be No. 1 in their category or maxed out on market share; or the category may simply be becoming more competitive. But executives, understandably, don’t want to risk losing the business they have and often are reluctant to change.
So they repeat the strategies that got them to where they are, even though the returns are diminishing. They know they need to identify fresh strategies that will take the company into the future in a way that balances risk and reward.
They don’t know their current and potential customers well enough to fully understand how their product or service could be designed to make their lives better. They’re not asking enough provocative, “naïve” questions that could unlock bigger opportunities to serve them at the highest possible level. They may be listening too literally to what consumers say and not actively envisioning and proposing solutions consumers can’t articulate for themselves. Most important, they may be putting company performance ahead of the customer experience.
Short-term priorities can take up a disproportionate amount of management attention, particularly for publicly held companies that are under the gun to deliver quarterly results to shareholders. It’s also natural for management to feel pressure to respond to a short-term trend or to react to what a competitor is doing today. But that often shortchanges the time they could be investing to tee up bigger opportunities for the future.
Companies need to ensure they are anticipating trends, filling their product pipelines and actively searching for emerging markets and customers while still delivering short-term results.
Many companies say they want to be more innovative, yet few excel at it. Often the issue comes down to culture:
These are just a few of the possible barriers to creating a more innovative culture. The good news is that culture is under the company’s control.