My Hand-Picked Top 11 Challenges with Innovation in Large Corporations

As I coach product leaders and product teams, one topic we spend a lot of time on is innovation constraints. What stops them from innovating? It's usually not because they don't know the theory; it's because their windshield is clogged with so many constraints that stop them from applying the theory. Consciously or unconsciously, they end up sacrificing innovation for the day-to-day necessities of corporate life.

In my last article, I wrote about my experiences with innovation at our startup, ExperiRace. In this article, I would like to expand on my experience from the "non-startup" setup and the challenges a product manager or product leader can face when trying to manage innovation. There are so many challenges in doing so, so I handpicked my top 11 challenges.

For all the product leaders reading this, I encourage you to share your thoughts on these challenges. Which one do you resonate with the most, and are there any additional hurdles you would add to the list?

1. Not Managing Distractions

In large corporations, development teams often face numerous distractions that can derail innovation efforts. These distractions come in many forms, such as the need to "keep the lights on" with ongoing maintenance tasks, customer escalations, sales feature requests, and operational issues that disrupt planned sprints and pull developers away from innovation.

To manage these distractions, it's crucial to establish clear boundaries and processes. Dedicating specific team members to handle urgent issues and implementing a prioritization system for incoming requests can help ensure that only the most critical items reach the development team. Additionally, fostering a culture that respects focused work periods can significantly reduce unnecessary interruptions.

2. Applying "Scalable" Processes to New Projects

Within large enterprises, it's common to have robust processes in place for compliance, approvals, regulations, and security. However, applying these fully-scaled processes to new innovation projects can stifle creativity and slow progress. When trying new things that might fail before scale matters, it's important to minimize these bureaucratic hurdles to allow the team to validate assumptions about value, feasibility, usability, and business viability quickly.

To foster innovation, reduce as many of these constraints as possible in the early stages. Let the team experiment and iterate rapidly without being bogged down by the processes designed for mature, scalable products. Actually, allow them to do anything by definition and stop them only when it hurts, instead of restricting them upfront and allowing exceptions only when they insist.

3. Not Defining Outcomes

In corporate environments, the success of innovation projects heavily depends on clearly defining outcomes. When objectives and goals are ambiguous or undefined, projects can lose direction, wasting resources and demotivating teams. Unclear outcomes lead to conflicting priorities, scope creep, and ineffective decisions that hinder project success. Without a clear understanding of desired outcomes, measuring progress and adapting strategies becomes challenging.

To address this challenge, it's critical to articulate specific, measurable outcomes for each innovation project. These outcomes should align closely with strategic objectives and customer needs, providing clear expectations and milestones. This clarity helps teams remain focused and motivated, ensuring that efforts contribute meaningfully to achieving desired results. Use outcomes for regular communication and alignment with stakeholders. these are essential to maintaining clarity and accountability throughout the project lifecycle, enhancing the likelihood of successful innovation outcomes.

4. Being Slow or Forgiving about Lack of Outcomes

In large corporations, once goals are set, there's often a tendency to overlook or delay corrective action when outcomes aren't met. This hesitance to act promptly can result from organizational inertia, resistance to change, or reluctance to acknowledge shortcomings. However, failing to address underperformance swiftly can lead to wasted resources and missed opportunities for improvement.

To overcome this challenge, organizations must foster a culture of accountability and proactive review. It's crucial to establish clear mechanisms for monitoring progress against defined and clearly measured outcomes and empower teams to take decisive action when deviations occur. This involves regular reviews, transparent communication channels, and a readiness to adjust strategies as needed.

5. Chasing Too Many Things at the Same Time

Pursuing too many projects at once without adequate resources or focus compromises on quality and timelines and often leads to team burnout as well. When teams struggle to allocate enough time and expertise to each initiative, it leads to project failure and missed opportunities for innovation.

To overcome this challenge, organizations should prioritize innovation projects strategically. Leaders must assess each project's alignment with organizational goals, resource needs, and potential impact before deciding on "the one" to focus on. Focusing on a manageable number of projects allows teams to concentrate their efforts effectively, enhancing the chances of success.

6. Not Empowering Teams: Not Explaining the Why

In large corporations, empowering teams with a clear understanding of the project purpose is crucial for fostering innovation. When teams lack this insight, it diminishes motivation, stifles creativity, and reduces ownership over outcomes.

Effective innovation requires more than task delegation; it necessitates aligning teams with broader strategic goals. Without a clear explanation of why their efforts matter and their contribution to organizational objectives, team members feel disconnected and uncertain, hindering collaboration and problem-solving.

To address this, leaders must prioritize communication and transparency, regularly explaining project rationale and emphasizing impacts on customers and stakeholders. This approach empowers teams to make informed decisions and take ownership, fostering a culture of open dialogue and collaborative innovation.

7. Not Defining Urgency in a Reliable Way, Just Setting Artificial Deadlines

In managing innovation projects at large corporations, a common pitfall is relying on artificial deadlines instead of aligning urgency with continuous progress toward meaningful outcomes. This can lead to rushed work and compromised quality.

To address this challenge, regularly monitoring progress through checkpoints, such as weekly reviews, is essential. Leaders should be prepared to pause or pivot projects that aren't progressing well, minimizing resource waste. Conversely, extending timelines for promising projects supports thorough exploration and high-quality outcomes, fostering a culture where results, not arbitrary deadlines, drive success.

8. Not Giving Good Access to Customers or Keeping Product Teams and Engineers Too Far from Customers

Maintaining direct and frequent customer interactions is crucial for successful innovation and product development in any project in any size of a company. In large corporations however, product teams and engineers often face challenges with limited access to customer feedback since there are too many "middleman" between them and the customer. This can result in products that do not meet market needs or user expectations.

To overcome this, it's vital to facilitate direct, regular and meaningful interactions between product teams (including engineers) and customers. Building strong relationships with 5-10 key customers that the team can reach directly, individuals who feel comfortable providing feedback day and night, offers deep insights into customer behaviors, pain points, and empathy at the desired level.

9. Not Leaving Room for Anyone to Be the Originator of the Idea

Innovation thrives when ideas flow freely from all organizational levels, rather than being confined to a select few. Creating an inclusive environment where creativity is valued across departments breaks down hierarchical barriers and fosters a culture of initiative.

Implementing a culture and methods for employees to submit and develop their innovative concepts, encourages ownership and drives ideas into actionable projects. This approach not only democratizes innovation but also enhances engagement and retention by leveraging diverse perspectives and talents within the organization.

10. Not Valuing Learning as an Outcome

Large corporations, tend to favor only successful outcomes over learning from both successes and failures. Emphasizing learning as a crucial outcome on it's own, is essential to continually improve and innovate.

To address this, leaders should foster a culture that encourages teams to reflect on and extract lessons from every project, regardless of its outcome. Conducting thorough post-mortem analyses helps uncover root causes, replicate successful approaches, and avoid repeating mistakes. Integrating a learning mindset promotes continuous improvement, resilience, and agility in innovation efforts, enhancing organizational capabilities and fostering innovation readiness.

11. Not Encouraging Teams to Take Risks and Make Bets

Innovation suffers when teams avoid risks, more common in larger corporations than startups. While playing it safe offers short-term stability, it often misses transformative opportunities crucial for long-term growth.

To overcome this, fostering a culture of calculated risk-taking and autonomy for experimentation is vital. Leaders should empower teams to explore new ideas, experiment with innovative solutions, and challenge norms. Recognizing and rewarding innovative efforts, regardless of immediate success, reinforces a culture where learning and growth are valued outcomes.

Take Action

Remember, innovation is about doing, not just thinking. Practical actions to confront the realities of large corporations are needed from leaders.

As we continue to explore and address these challenges, I invite readers to contribute their insights. What additional challenges have you encountered in your innovation journey? Share your thoughts and expand this discussion.

Additionally, I am available to provide mentorship and further insights into overcoming these challenges. Feel free to reach out for personalized guidance on navigating the complexities of innovation within your organization.