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Aruba, April 18, 2017 - When a CEO announces a major initiative to foster innovation, mark your calendar. Three years later, many of these ambitious ventures will have quietly expired without an obituary. Among those that have met that fate in recent months are initiatives at Target, Alaska Airlines, Coca-Cola, the New York Times, and Chubb.

The problem isn’t that large companies lack good ideas. In most cases we’ve studied at Innovation Leader, an online resource for people responsible for innovation and R&D, there’s a surplus of good ideas for new products, services and business models. Often, there is early data that shows customers are willing to buy.
The problems arise when projects need to be transferred to the business units for a large-scale launch. Is there enough communication? Does the business unit feel like the project is something they had a hand in shaping — or is it like a perishable package left on a doorstep? Are people moving from the innovation lab or pilot test team to help with the roll-out? Are there sufficient resources devoted to solving issues that occur with scale-up? Is anyone responsible for ensuring these projects don’t fall through the cracks, or drop to the bottom of the sales force’s priority list?
In a recent survey of 164 executives at companies with more than $1 billion in revenue, 26% of respondents told us the transition from innovation or R&D group to the business unit “needs serious work” at their company. Another 16% described it as “terrible,” and said they’d seen multiple projects wither following the hand-off to a business unit. Most respondents admitted that there was room for improvement.
So how to improve? At many companies, new innovation initiatives get the blessing of the CEO — but have little interaction with the business units. Each initiative thus becomes like a satellite orbiting the earth, communicating sporadically only with a few senior executives on the ground. Freedom to explore long-term ideas and emerging technologies is important. But most of these new teams will require help from the business units to make it out into the “real world,” and generate substantial revenues.