How internal barriers prevent innovation

Heather McIlvaine

22nd May 2018

Australian senior executives see internal barriers, including emotional factors, as the key reasons innovation initiatives fail, according to new research.

Released today, Canon Australia’s Business Readiness Index on Innovation includes the findings from a survey conducted by GfK Australia of more than 530 senior executives in more than a dozen industries, including retail.

The report reveals that while 78 per cent of survey respondents recognise the importance of innovation, only 38 per cent consider their business to be innovative.

Retail leaders are slightly ahead of the curve in this regard, with 80 per cent of industry respondents saying innovation is important, and 46 per cent considering their business to be innovative.

According to Gavin Gomes, director of Canon Business Services, the relatively high level of choice and competition in the retail sector means that retailers have always needed to innovate to survive.

But that doesn’t mean they are immune from the forces preventing innovation across industries.

Gavin Gomes, director of business services, Canon Australia

According to the survey, senior executives cited mostly internal barriers, such as bureaucracy or company culture, and emotional factors, such as reluctance to change, conflict between stakeholders and doubt, as the key reasons innovation initiatives fail, while the top reason was lack of budget, with one in two respondents saying limited resources prevents them from innovating.

Gomes noted, however, that there is no correlation between the size of an organisation’s budget and its ability to innovate.

Sean Sands, co-director of the Customer Experience & Insight Research Group at Swinburne University, agreed that organisations don’t need a lot of money to innovate.

“Many clients we work with work to lean innovation budgets and instead focus on design-led innovation or customer innovation labs as a centre for driving tech, service, or experience innovation,” Sands told Internet Retailing.

“Many cost effective methods exist for driving innovation, including the Google Ventures Sprint model which focuses on aligning rapid prototyping with a customer focus,” he added.

What really drives innovation

When looking at the factors that actually drive innovation, the survey respondents rated technology, including platforms and systems, as the most important of three factors. The next most important factor was people, including employee skill sets and company culture, followed by policies and process, including recruitment policies and an innovation strategy and framework.

Gomes noted that businesses benefit from hiring people who have worked at innovative companies, not only because they bring their talent into the organisation, but also because they bring an understanding of innovation policies.

Indeed, according to the survey, highly innovative companies are far more likely to clearly measure their progress on innovation than the average company.

Another shared trait of the most innovative companies is that they are more likely to collaborate with other businesses and universities than the average organisation.

The report notes that many businesses are missing out on an opportunity to collaborate with Australian universities on research. Sands agreed that academic insight is an under-utilised skill set.

“Universities tend to have an innovation focus and an often under-utilised skill set. If you can align with academics that have an industry focus and understand the dual needs of organisations and customers, it is possible to align academia and industry,” he said.