Why Organic Growth and Innovation Efforts Fail: Companies Often Get These 6 Things Wrong

Large companies often face tough challenges when it comes to growing and innovating. They must find ways to introduce new ideas into established structures, foster an entrepreneurial mindset within a culture of operational efficiency, and manage a diverse portfolio of growth initiatives. To achieve successful growth and innovation goals, organizations should focus on 6 factors across two broad capability areas: 

1. Developing and managing an overarching growth and innovation program and
2. Managing how individual growth initiatives (new products and services, new businesses, and business improvement) are developed and commercialized.

However, we often see big gaps in these two extremely important capabilities, and they are key to enabling large companies to act with the agility and foresight of nimble startups, turning potential into progress.

Overarching Challenges Managing Growth and Innovation Program

Taking a pragmatic and programmatic approach to growth and innovation requires entrepreneurial talent, clear articulation of the program’s goals and strategy, and a set of consistent processes that reduce wasted time and resources while improving the outcomes for customers, the company, and other stakeholders: governance, stage-gate approval processes, and formal portfolio (of individual initiatives).

1. Lack of Operators with Startup Experience: Large corporations often excel in operational efficiency but may need more nimbleness and risk-taking ethos inherent in entrepreneurial ventures. Skilled intrapreneurs combine entrepreneurial talent with organizational agility to navigate internal processes to secure internal talent, funding, and other resources needed to bring new growth opportunities to fruition. Bridging this gap requires fostering an internal culture that values innovation as much as operational success. Companies can establish internal incubators or growth and innovation labs that operate with the agility of startups, focusing on rapid prototyping and iterative development to bring new ideas to life.
2. Informal Growth and Innovation Program Management: Companies should institutionalize the process to avoid innovation becoming a sporadic effort. This involves setting up dedicated innovation teams with clear mandates, integrating innovation metrics into corporate scorecards, and establishing a systematic idea generation, evaluation, and development process. Furthermore, allocating a fixed percentage of the budget to innovation projects can ensure they have the resources to flourish.
3. Limited Portfolio and Program Performance Management: Many large companies, at any time, might be pursuing scores or one hundred or more individual growth and innovation initiatives. Generally, lacking rigorous portfolio management leads to slow time to market and failure to meet customers’ expectations or financial objectives. Managing a portfolio of growth initiatives requires a strategic approach akin to financial portfolio management. Companies should classify initiatives based on risk, potential return, and strategic alignment and allocate resources accordingly. This balanced portfolio approach enables companies to pursue disruptive innovations while investing in incremental improvements and core business extensions.

Challenges Developing and Commercializing Individual Initiatives

While the previous section addressed the company or growth program challenges, we now turn to challenges companies face throughout the idea to execution cycle of individual initiatives.

The journey towards sustainable growth and innovation is fraught with complexity and challenges that demand more than just sporadic bursts of creativity and entrepreneurial spirit. The second main idea of this piece delves into the common pitfalls and structural barriers that organizations face when attempting to embed a culture of innovation and growth within their DNA. It underscores the necessity of a disciplined, repeatable approach to transforming market insights into tangible business outcomes and highlights the crucial role of resilience in the face of inevitable setbacks.

At the heart of this discussion is the recognition that while many companies possess the raw ingredients for innovation—data, talent, and technology—the alchemy of converting these resources into new, viable business models is a rare competency. This section explores the significance of crafting a detailed, rigorous Innovation Blueprint that guides ideas from conception through execution, the implications of lacking a repeatable framework for innovation, and the transformative power of redefining failure as a cornerstone for learning and evolution. Through this lens, we invite readers to reevaluate their strategies for growth and innovation, emphasizing the importance of structured processes, collaborative ideation, and a culture that tolerates and celebrates the lessons learned from each setback.

1. Lack of a Repeatable Process from Idea Through Commercialization: A concentration of startup talent and experience is rare in most businesses, so a lack of a detailed, rigorous, and repeatable process of building a business from idea through execution puts the entire growth program at risk. Developing a standardized framework for growth and innovation can streamline the process from ideation to commercialization while providing products and services that better meet customers’ needs. Such a framework should include stages like market analysis, concept development, prototyping, and scaling, with defined exit criteria for each phase. This not only ensures consistency across initiatives but also allows for the accumulation of best practices and lessons learned.
2. Lack of Tools to Accelerate Commercialization: Converting market insights into actionable business opportunities requires a deep understanding of customer needs, competitive dynamics, and emerging technological trends. Techniques such as Design Thinking, Lean Startup, Agile, and a suite of fit-for-purpose tools can help empathize with customers, ideate solutions, and build solutions to meet their latent needs. Collaborating with customers and partners in co-creation workshops can yield innovative concepts grounded in real-world applicability. Many companies can aggregate and analyze various data and insights about customers, ecosystems, tech, and trends. However, the ability to translate that into NEW business models is rare.
3. Failure is not an Option: Thomas Edison said, “I have not failed. I’ve just found 10,000 ways that won’t work.” That sentiment is frequently true when creating new products, services, and businesses – hopefully with fewer ways that won’t work. Cultivating a culture that views failure as a learning opportunity is crucial for sustaining innovation and involves celebrating intelligent failures (those that provide valuable insights) and quickly pivoting away from unviable initiatives. Encouraging teams to share their learnings from failed projects can foster an environment where risk-taking is supported, and continuous improvement is embedded in the innovation process. Growth and innovation require resilience – failure happens publicly, while success is often experienced privately.

What’s Next?

This post emphasizes the need for a strategic approach to achieving growth while highlighting the importance of individual growth initiatives. Success lies in embedding these principles into the corporate culture, where every failure is a learning opportunity and every success a milestone. The goal is to balance strategic foresight with the relentless pursuit of execution excellence. We highlight a path for organizations to follow, guiding them towards a future where innovation and organic growth are perpetual components of the company culture, illuminating the path to address the challenges inherent in organic growth and innovation.

Sprosty Network brings decades of growth and innovation experience to every client challenge. Our approach was developed and refined based on years of business operator experience, academic insights, and specific frameworks (examples: Design Thinking, Lean Startup, and Agile). We specialize in tailoring our core Pragmatic Innovation approach to each client’s organization based on its culture, business model, current growth and innovation capabilities, size, and several other factors.

We are eager to share the details of our growth and innovation approach. To learn more, please complete the contact form to get the ball rolling: