10 Signs Your Innovation Strategy Needs an Overhaul

Even the best innovation strategies, once highly effective, can become outdated over time. What worked five years ago may no longer be applicable in today’s digital-first, rapidly shifting landscape.

In this article we’ll walk you through the most common signs that it is time for reassessment as far as your innovation strategy goes. By identifying these warning signs early, you can take proactive steps to revitalize your approach and stay competitive.

Sign 1: Slow Time-to-Market

The success of a product often depends on how quickly it can reach the market. If your organization takes too long to get new products or services to market, this may indicate that your innovation strategy is bogged down by rigid processes or excessive bureaucracy – a clear sign that your approach needs an overhaul.

For example, although technologically superior to VHS, Betamax was slower to market and ultimately lost out to VHS due to a combination of this and other factors, including its shorter recording times and higher prices. The approach of Sony towards more gradual and cautious change allowed VHS to acquire an early lead which Betamax was never able to overcome, proving the importance of speed in product development​.

Sign 2: Lack of Cross-Departmental Collaboration

Innovation really does thrive with diversity of perspective. If your projects are siloed within specific teams, you're likely missing out on valuable ideas and insights from other departments. Isolated teams mean a more fragmented, less effective way of innovating, reducing overall effectiveness of business.

For example, CarMax – a leading US-based used car retailer known for its no-haggle pricing model, transparent customer service, and innovative online-offline sales integration – embraced cross-functional teams as one way to accelerate innovation to match up to changing technology and shifting customer needs. CarMax brings together functions like marketing, sales, and IT for faster and more cohesive product development​.

Sign 3: Customer Feedback is Being Ignored

Customers can help drive innovation through their feedback. If your strategy has failed to put the customer at the forefront, the chance of developing products or services that do not meet the demands of the market is very high. Not paying attention to customers' needs can lead to costly miscalculations or even total failures of complete product lines.

Example: Curves, the first women-centric fitness franchise, enjoyed early success by offering a unique gym experience tailored to women’s needs. Over time, members voiced frustrations regarding limited hours, high fees, and inconsistent service across the independently-owned locations, yet Curves’ leadership failed to address these concerns. This disregard for customer feedback led to a rapid decline in membership, forcing the closure of many Curves locations. Although not a product-focused example, this failure does highlight the risks inherent in ignoring customer feedback.

Sign 4: High Rate of Project Failures

Frequent failures can be a good indication that something is wrong with your process, especially if nothing is learned from them. Failure itself is an important part of the innovation process, how companies learn from and adapt to such failures makes all the difference. Each failure should be seen as an opportunity to gain valuable insight.

Amazon is one prominent example of the firm that views failure as an intrinsic part of the process of innovation. Instead of penalizing failures, Amazon encourages teams to be bold, take risks, experiment, and learn from their failures. A major reason for such an approach toward failure is that it  permits a culture of continuous learning and improvement to stay abreast. Their philosophy, “If you’re not failing, you’re not innovating enough,” has enabled them to turn failures into opportunities.

Sign 5: Innovation is No Longer a Priority for Leadership

When innovation is no longer championed by leadership, it can lose momentum quickly. Without strong support from the top, innovation initiatives may stagnate, and the business risks falling behind in the market.

A cautionary tale is Kodak, a company that was once synonymous with photography innovation. However, Kodak's leadership remained heavily invested in its legacy film business, despite early recognition of the potential of digital photography. This reluctance to shift priorities was just one of several factors that led to Kodak's eventual decline. Combined with other missteps, like delayed technological adaptation and a rigid corporate structure, Kodak missed key opportunities to adapt to market shifts, ultimately contributing to its bankruptcy in 2012.

Sign 6: Heavy Reliance on Legacy Systems

Outdated systems and tools can significantly slow down your innovation efforts. Relying on legacy systems often creates inefficiencies, making it difficult for businesses to adapt to new opportunities and market demands. These older technologies limit flexibility and can prevent seamless collaboration, ultimately hampering innovation.

A well-known example is Blockbuster, which stuck with its traditional brick-and-mortar model for too long. As digital streaming became the preferred method of content consumption, Blockbuster's inability to pivot and embrace new technology led to its downfall. By the time the company attempted to introduce its own streaming service, it was already too late to compete with nimble competitors like Netflix​.

Sign 7: Inconsistent Metrics for Measuring Success

If there’s no clear way to measure the success of your innovation initiatives, it becomes nearly impossible to determine what’s working and what isn’t. Inconsistent or vague metrics can leave teams guessing about the effectiveness of their innovation strategies, leading to wasted resources and missed opportunities.

A notable example of this is 3M's Six Sigma program, which, while successful in improving efficiency, became too focused on rigid performance metrics. This strict adherence to metrics led to a reduction in creative risk-taking, ultimately stifling the very innovation 3M was known for. The focus on improving existing processes through Six Sigma came at the cost of exploring new ideas, which limited breakthrough innovations​.

Sign 8: Resistance to Change and Risk Aversion

A culture that avoids risks and clings to traditional methods can stifle innovation and prevent the company from keeping pace with more adaptable competitors. When employees are afraid to fail or explore new ideas, innovation stalls, and the company risks becoming stagnant.

A telling example is IBM's early reluctance to fully embrace cloud computing. While competitors like AWS rapidly advanced in the cloud space, IBM initially hesitated, focusing instead on its traditional hardware and software services. This delay allowed AWS to capture a significant portion of the market, leaving IBM scrambling to catch up. By the time IBM shifted its focus to cloud solutions, competitors had already established dominance​.

Sign 9: Innovation is Seen as an Isolated Initiative

When innovation is perceived as something that only happens within the R&D team, the rest of the organization may feel disconnected from the process. This can limit the potential for fresh ideas and perspectives, stifling innovation across the company.

An example of this is Sears, once a giant in the retail industry. As the digital marketplace evolved, Sears failed to adapt. Part of the problem was that innovation was seen as an isolated effort rather than a company-wide priority. This lack of broader involvement and adaptation led to its eventual bankruptcy, as Sears struggled to keep up with more agile and digitally-focused competitors​.

Sign 10: You’re Not Adapting to Market Changes

In today’s business landscape, failing to adjust your innovation strategy based on market shifts can lead to missed opportunities and stagnation. Companies that are slow to respond to industry disruptions risk falling behind more agile competitors.

Example: A clear example of this is Toys "R" Us, which struggled to adapt to the rise of e-commerce. While competitors quickly embraced online retail and transformed their business models, Toys "R" Us continued to rely heavily on its physical stores. The failure to recognize the growing importance of e-commerce, coupled with delayed digital transformation efforts, contributed to its eventual bankruptcy​.

It’s Time for an Innovation Overhaul

 Slow time-to-market, resistance to change, siloed teams, and outdated systems are all indicators that an overhaul of your innovation strategy might be needed. A successful innovation strategy today requires flexibility, collaboration across departments, and strong leadership support. If you’ve recognized any of these signs within your organization, it’s time to reassess and adapt your approach.