Why do companies fail to innovate? What barriers prohibit the implementation of new ideas?
Led by Karl Ulrich, CIBC professor of entrepreneurship and eCommerce and vice dean of innovation, more than 30 alumni came together to debate the road blocks to innovation and the potential paths to success. But, before beginning this conversation, Ulrich laid out a few key definitions.
“Innovation is a new match between a solution and a need,” he said. “Successful innovation… means that you as a holder of the need are willing to pay me more for the solution than it costs for me to provide it.”
Innovation seems straightforward, but why is it so difficult for companies to implement innovations—internally or externally?
Participants voiced a variety of reasons: risk aversion, short-term horizons, institutional barriers and bureaucracy, legal and image issues, lack of strong and willing leadership, and resource scarcity. And while employees are frustrated by an inability to get new ideas implemented, employers often don’t see the wealth of opportunity in their employees.
As an example, Ulrich discussed Penn Medicine, which recently held an idea tournament during which employees submitted and voted on ideas for innovations that would help the hospital system—much in the same style as the Wharton School asked its alumni for Reunion Weekend session topics. The Penn Medicine idea tournament generated more than 2,000 submissions.
“The overwhelming senior management response was, ‘Wow, these people work for us? We had no idea,’” Ulrich said.
If the barriers to implementing innovation typically frustrate employers and do a disservice to employees, how can we break through them?
Act during a crisis. When an industry or company is in crisis, it’s more likely innovations can be implemented. The sad irony is that if innovations had been put in place earlier, a crisis could have been averted.
Work with shorter time frames and more information. Implementing an innovation can be risky because of the unknowns: how much will it cost, how long before it becomes profitable and how much profit will we make in the long run? When these questions can be answered the likelihood of implementation goes up.
Allocate resources without micromanaging projects. Organizations that create centralized resource pools—both funding and staff—allow selective staff members to work with other internal departments to implement innovations.
This discussion occurred at the Thought Team workshop, “Implementing Innovation,” held during MBA Reunion Weekend. The session was one of the “winners” of the alumni idea tournament, in which alumni suggested and voted on topics for Lifelong Learning sessions at Reunion.