The Two Reasons Why Organisations Struggle With Innovation And How To Fix It

The data suggests that the organisation you work for now will probably fail before you retire. Humans are living longer. Companies on the other hand are not. The company lifespan is shortening.

In the 1950s, the average tenure of a company in the S&P 500 was around 60 years. By the 1980s, the average tenure had fallen to approximately 30 years. Today, companies remain in the S&P 500 for an average of 20 years, and this number is projected to decline to about 14-15 years before we reach 2030.

The Shortening Innovation Cycle

The reason companies have shorter lives is that the innovation cycle is shortening. Historically, innovation followed a relatively slow and linear trajectory. The Industrial Revolution, for instance, brought about transformative changes over decades, with technologies like the steam engine and electricity taking years to reach full societal adoption.

At the heart of this acceleration is the digital revolution. Technologies such as artificial intelligence (AI), blockchain, and quantum computing are emerging at a rapid pace, building upon one another in ways that compound their impact.

Unlike past eras, where breakthroughs like the telephone or automobile required extensive physical infrastructure and years of refinement, digital innovations can scale globally almost instantaneously. Software, cloud computing, and the internet have removed many barriers to entry, enabling startups and tech giants alike to innovate, deploy, and iterate at speeds previously unimaginable.

The cultural shift toward agility and experimentation has also played a significant role. Practices like agile development, lean startup methodology, and continuous delivery have transformed how organisations approach innovation. Rather than waiting for a product or service to be perfect, companies now prioritise getting a minimum viable product to market quickly, gathering user feedback, and iterating in real time. This iterative approach not only accelerates development but also ensures that innovations align closely with market demands, further compressing the cycle.

“Creativity is thinking up new things. Innovation is doing new things.“ Theodore Levitt

The shortening innovation cycle also puts pressure on traditional business models. Established firms that once thrived on long product lifecycles and incremental updates now find themselves in a race against startups that can disrupt entire industries overnight. For these companies, survival requires a willingness to cannibalise existing products, embrace uncertainty, and invest in a culture of perpetual reinvention. Those that fail to do so often become the poster children of cautionary tales, as seen with Kodak, Blockbuster, and Nokia, all of which struggled to keep pace with change.

The Growing Impact of the No-Code Revolution

Adding to this acceleration is the rise of no-code and low-code development platforms, which have revolutionised how innovation happens by lowering the technical barriers to creating digital products.

In the past, building software required extensive programming knowledge and often large teams of developers. Today, no-code platforms like Figma , Bubble , Framer , Glide , Airtable and SmartSuite allow individuals with minimal technical expertise to create prototypes, apps, websites, and automated workflows in a matter of hours or days.

This has democratised the creation process, empowering entrepreneurs, small businesses, and even non-technical employees within large corporations to bring ideas to life without waiting for IT departments or hiring specialised developers.

"A prototype is worth a thousand meetings." David Kelley

No-code tools also enhance experimentation, a critical element of the modern innovation cycle. By enabling rapid prototyping, these platforms allow users to test ideas quickly and at low cost, making it easier to pivot or refine solutions based on early feedback. For example, an entrepreneur with an idea for a fintech app can build and launch a minimum viable product (MVP) in weeks, gather user data, and iterate—all without writing a single line of code.?

This speed to market not only levels the playing field for smaller players, but also pressures larger companies to match this agility, further compressing the innovation lifecycle.

The Risk of Doing Nothing

This is not an innovation call to arms article, but for organisations without a robust innovation strategy, the rapidly shortening innovation cycle represents an obvious risk.?You don't need me to tell you that the barbarians are at the gate.

It is true that disruption is often overplayed and indeed sometimes romanticised. In most cases, it is not disruptive but incremental. What is most likely to happen is for new entrants to leverage technology in order to pick off the most profitable bits of your business, leaving you with the rump. Often this isn’t enough to support your cost structure, and you end up severely downsizing or exiting the market altogether.???

"Most innovation is a gradual process. The modern obsession with disruptive innovation, a phrase coined by the Harvard professor Clayton Christensen in 1995, is misleading." Matt Ridley

The absence of innovation impacts more than just market performance—it affects talent acquisition and retention. Who wants to work for a stagnant company with thinning margins? Nobody with a zip in their step. Let’s face it, people happy clinging to a legacy business with no innovation strategy aren’t going to be the motors of growth. Over time, the lack of talent and product improvement within the organisation reinforces a cycle of decline. More on this later.

The Intention Gap

In light of the above, it doesn't come as a surprise that studies by consulting firms such as McKinsey & Company and PwC consistently show that a significant majority of executives—typically between 80% and 90%—rank innovation as one of their top priorities.

However, there is a considerable gap between the importance placed on innovation and the extent to which it is actively pursued or successfully implemented within companies.

While many executives express the desire to foster innovation, only about 30% to 40% of organisations globally take consistent, strategic action to embed innovation into their business practices. This includes making tangible investments in research and development, establishing dedicated innovation teams or processes, and allocating resources to experiment with new ideas.

Innovation Theatre

Your LinkedIn feed may present you with images of sleek innovation labs, flashy hackathons and partnerships with startups. Many organisations appear to be actively embracing the future. Unfortunately, such innovation theatre rarely delivers meaningful change or results.

Corporate innovation theatre often begins with the best intentions. They recognise the pressure to evolve and the need to respond to changes in their industry. Leaders announce bold initiatives, unveiling strategies that seem forward-thinking and transformative. Glossy presentations and PR campaigns tout the company’s commitment to groundbreaking ideas, while resources are allocated to create visible symbols of progress—dedicated innovation teams, state-of-the-art labs, or partnerships with high-profile tech startups.

Despite these efforts, the reality often falls short of the promise. Initiatives labelled as “innovative” frequently lack substance or alignment with the organisation’s core business objectives.

Hackathons and idea competitions may generate excitement but rarely lead to actionable results or scaled implementations. Partnerships with startups can falter when mismatched priorities or slow-moving corporate structures stifle collaboration. Even well-funded innovation labs can become siloed, detached from the practical realities of the business and the market it serves.

At the heart of innovation theatre is a disconnect between the appearance of innovation and its execution. Many organisations focus on creating the perception that they are on the cutting edge, using innovation as a marketing tool to impress investors, customers, and employees. Yet, these efforts often lack the deeper strategic commitment and cultural shifts necessary to drive genuine transformation. The result is a cycle of superficial initiatives that may win headlines in the short term but fail to deliver long-term value.

The consequences of innovation theatre are predictable. Too often, it leads to wasted resources, missed opportunities, and growing cynicism among employees who see promising ideas go nowhere. Externally, customers and stakeholders may lose trust as the gap between rhetoric and reality becomes evident.

So What Prevents Organisations Moving Beyond Innovation Rhetoric to Execution?

There are, of course, a plethora of reasons offered up as to why organisations struggle to innovate. These include complacency, lack of expertise, culture, risk aversion, siloed structures, incentive schemes, short-term focus and misaligned leadership. Some of these are undoubtedly contributing factors, and others are easily resolved.

What we really want to know is where to start? We want to cut through the noise and focus on the few things that will make the most difference so we get positive results.

The good news is that you can choose to focus on just two things to start innovation in your organisation. These are the two essential yet surprisingly simple components of innovation - process and time.

The Innovation Process

Presumably you have many defined and functional processes in your organisation. If you’re struggling with innovation, the chances are your organisation’s process needs attention, or you don’t have a process at all. This is actually true for all parts of your business, and innovation is no exception.

An innovation process is essential because it provides a structured framework for turning problems into viable solutions, ensuring that innovation gets the oxygen it needs and is not left to chance. Without a clear process, companies risk falling into a chaotic, uncoordinated approach that often fails to deliver meaningful results. An effective innovation process establishes a roadmap for problem harvesting, ideation, validation, development, and scaling.

I have some more good news. The innovation process isn’t complicated. Innovation consultants won’t thank me for saying this, but the process is remarkable in its simplicity. There’s no complicated formula, and the lottery of life didn’t need to deal you a rare recessive creativity gene. It’s just a 10-step process that starts with the identification of a problem.

I call this first step problem harvesting. It is the most important step. Unfortunately, it is also the step that is most often ignored. The most accurate predictor of success is the quality of the problem you identify.

Einstein is credited with saying, “If I had an hour to solve a problem, I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”

Most organisations get this the wrong way around. Innovation is so much harder when you start ideating solutions to unvalidated problems. Typically, you end up with a solution looking for a problem or a product looking for a market. You might find it, but it’s a higher risk and less efficient way to innovate.

"If I had an hour to solve a problem, I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions." Albert Einstein

Although you’ll hear people saying you need to take risks to innovate, proper innovation management is all about reducing risk. The design of your innovation process is key to this.

Time for Innovation

You need time to innovate. This is such an obvious point that it hardly bears mentioning. Except that it’s the biggest impediment to innovation. Employees are generally not paid to innovate. They are paid to complete the tasks involved in their day job. Their performance is judged on how well they do their day job. Their bosses' performance is also contingent on how well their team does its day job and so on.

The vast majority of people won’t find the word innovation in their job descriptions, and if they did, they’d be facing a tricky dilemma. People follow what you do (or don’t do), not what you say. If an organisation’s carrots and sticks focus on the tasks of the day job, that’s what will get done regardless of what else is on the job description or what the CEO says at conferences or what lofty ambitions are are on the website.

The inescapable truth is that people don’t have time to innovate at work. Not even at Google.?

Google's famous "20% time," which allowed employees to devote a fifth of their work week to passion projects, was once celebrated as a driver of some of the company’s most iconic innovations, such as Gmail and Google AdSense. Over time, however, the policy eroded, constrained by growing managerial oversight, productivity pressures, and shifting company priorities. In other words, just like at every other organisation.

Initially, 20% time was widely seen as a bold investment in creativity. Employees could pursue ideas that, while outside their formal responsibilities, aligned with Google's broader mission. This freedom encouraged a spirit of experimentation, and some projects became transformative products.

However, as Google scaled, logistical and cultural barriers emerged. Employees needed managerial approval to dedicate time to side projects, and concerns about maintaining productivity often stymied their efforts. Peer review processes also disincentivised employees from spending time on passion projects, as their performance evaluations favoured those fully focused on formal assignments.

By 2013, Google's 20% time had effectively dissolved.?

Microsoft has experimented with various programs to encourage innovation, including hackathons and structured innovation challenges. One of its most notable efforts is the annual "OneWeek Hackathon," which brings together employees from across the company to collaborate on passion projects.

As you can see, even some of the biggest brands in tech have struggled with the time problem. Despite this, several thought leaders, executives, and organisations advocate for companies to encourage employees to spend more time on innovation.?

Clayton Christensen, the prominent academic we referred to earlier, has emphasised the importance of giving employees time to focus on new ideas and disruptive innovations. In his revered book The Innovator's Dilemma, Christensen argues that successful companies should allow employees the freedom to experiment with new ideas, especially in the early stages of disruptive innovation.

Richard Branson is another well-known advocate for employee-driven innovation. He frequently highlights the value of encouraging employees to think creatively and take ownership of new ideas. Branson argues that companies should empower employees to innovate by giving them the space to explore unconventional ideas and pursue passion projects.

Harvard Business Review has also published research on how companies can benefit from creating an environment conducive to innovation. HBR stresses that innovation requires more than just investment in R&D; companies should actively integrate innovation into daily work.

Yes, we get it. It’s good to spend time on innovation, but we’re too busy meeting the monthly targets in our day jobs.

So Is There a Way to Square the Circle?

If there isn’t enough time at work, then that leaves the time we are not at work. In the modern age of hybrid working, that’s the time we are not focused on our day job. As we leave the culture of clocking in and out of work behind, it presents new opportunities to reframe how we divide our time.?

There are two categories of time we can use productively to start to innovate. The downtime at work when we are in between tasks and our free time. It turns out that our free time is the best time to innovate. You know that idea that came to you when you were in the shower or out walking the dog?

Infact, the idea that people are most creative in the shower is supported by both research and anecdotal evidence. Showers often create an environment conducive to creative thinking because they promote relaxation and activate the brain's default mode network. This network, which is responsible for daydreaming and spontaneous thought, thrives when the mind is not intensely focused on a task. While the shower may not be everyone's prime space for creativity, it exemplifies how certain environments can foster the mental freedom needed for inspiration.

At this point, you might well be wondering why someone would do yet more work for their employer in their free time, and indeed, that is a very good question. Showering aside, the answer has two strands:

• There are those that are purpose driven. When they work in a purpose-driven organisation and are offered new ways to contribute to the mission, they gladly accept.
• There are those that are financially driven. When they can correlate additional input into what they see as a fair share of the return, they happily contribute.

Of course, these are not mutually exclusive categories, in fact they are subcategories of the same underlying motive - reward.

Reward comes in many shapes and sizes. The important thing is that there is a reward and that it is fair. True, it is important that people are not pressured into working in their own time. Nor should they be prevented from doing so because of inflexible policies or a lack of support.

There's also a key distinction here between incentive and reward. Incentives are designed to get you to take a particular action. Rewards are what you get for achieving an outcome. The reward structure we propose isn't designed to encourage people to innovate, it's to ensure those that create value through innovation are justly recognised and rewarded.

Components of Employee Empowerment

Several things are needed to empower people to innovate in their free time -

• A guided platform that provides them with all the knowledge, processes and tools they need to innovate. Innovation by numbers, if you like.
• A reward structure (a mix of financial and non-financial) that is fair and recognises value added, and that this is a partnership-style relationship.
• Ideally, the freedom to work on anything they like, not just within the status quo of the organisation’s traditional activities. Of course, an organisation can set specific challenges it would like to see solved and set guardrails to prevent work on areas that aren’t compatible with the brand or the law.?

That is what we are building at Uusia - The Platform for Employee-Led Innovation . Uusia is an entirely new way for organisations to innovate in partnership with their employees. In my experience, and maybe you have seen this too, organisations are full of people who have ideas. Yet, in almost all cases, these ideas never reach further than the water cooler conversation. This is enormously wasteful. Organisations miss out on potentially transformational ideas, employees feel frustrated, and your best talent leaves for greener pastures.??

Wouldn’t It Be Good If…

Most ideas in an organisation go nowhere. This is because there is no structure for processing ideas or because there isn’t time to do anything with them. After making a few suggestions, learned helplessness kicks in and people stop sharing their ideas.

This is a problem because we need to generate many ideas. Most ideas fail. That means we need hundreds of ideas entering the innovation funnel because the rate of attrition is so high.?

"Innovation runs mostly on trial and error, the human version of natural selection." Matt Ridley

Not filling the start of the funnel to the brim is a common mistake in innovation management. It creates a mismatch between the extremely low probability of an idea being successful and your need for the idea you do have to meet your goals. If you only have five ideas working their way through your innovation process, you’re betting on a 20% probability of success, when in reality the probability of an idea being successful is less than 1%.

So How to Generate Hundreds of Ideas?

Well actuall it's problems we are after, not ideas. As we have seen, the first step in innovation is problem harvesting. There are two ways to generate hundreds if not thousands of problems - manual and automated.

• The manual method requires the involvement of as many people in the organisation as possible. That’s what the Uusia - The Platform for Employee-Led Innovation platform enables, an interface for capturing problems and ideas followed by a process for validating, scoring, ranking etc.?
• The automated method requires your organisation to hold data relating to the experience of your stakeholders. This might be a CRM, a call centre, a chat function, feedback forms etc. Basically anywhere your customers or other stakeholders interact with your organisation. Using AI, from this data you can identify, score, rank and assess problems for their potential viability. This is what we aim to achieve with our AI-powered problem harvesting tool, Quluq .?

The manual method is a logical starting point, and you can pilot it and calibrate before rolling out to the rest of the organisation.?

Key Takeaways

Look, I don’t want to be flippant about how easy innovation is, but I do challenge the narrative that it is exceedingly difficult and the gilded preserve of big tech with seemingly limitless resources. Innovation is for everyone no matter how big or small, whether you're for profit or non profit.

With the advent of no code tools, there is nothing technically difficult about the process. The challenge is that the attrition rate is very high. We need to feed the innovation funnel with lots of volume to get anything useful out of it.?

Over time, you will learn to improve your innovation process and improve its yield. That knowledge will be a significant source of competitive advantage, as you will generate a higher innovation output than the market and need less resource to do it. This virtuous circle will drive improved revenue, higher margins, the ability to attract and retain the best talent and improve your value proposition.

"Thomas Edison understood better than anybody before, and many since, that innovation is itself a product, the manufacturing of which is a team effort requiring trial and error." Matt Ridley

Perhaps the biggest leap for many organisations is extending the invitation to partner in innovation to as many corners of the organisation as possible. Sometimes, leaders feel like they should have all the answers. But why should that be the case? People feel more valued when they are included, and the collective intelligence of the hive is more powerful than that of even the most intelligent individual (especially when it’s leveraged still further by AI).? Besides, there are many facets to innovation that go way beyond what we traditionally might call intelligence.??

If you want to innovate and, if you have read this far, I am assuming you do, then time and process are all you need to get started.? You don’t need to complicate it much beyond that. The important thing is to cut through the noise, empower your people, and get started.