The Innovation Paradox: The contradiction between wanting innovation and not providing the conditions for its developmen

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Innovation requires a change in mindset and the recognition that many ideas can fail because, at the beginning, there is only one set of hypotheses about what might succeed.

In a world where the ability to innovate is more than desirable, being essential for organizational survival and growth, many companies still face a dilemma: they desperately want to innovate, but they are unable to provide the necessary conditions for innovative projects to happen. This paradox manifests itself in many ways, in organizations of all sizes and sectors. Let’s explore the barriers that impede innovation and the strategies to overcome them, in order to create an environment where innovation thrives.

Exploration x exploitation
Innovation requires a delicate balance between exploring new ideas (exploration) and extracting the most that the current business model can offer (exploitation). Both are fundamental in a world in constant email data transformation. Many companies get stuck in what is called exploration, focusing too much on what they already do well, while neglecting to explore new opportunities that may be essential to their sustainability. This duality between maintaining the existing business and investing in new paths creates a tension that can prevent investment in innovative projects.

Types of Innovation
We can understand innovation as creating value in different ways. But not all innovations are created equal. Distinguishing between efficiency innovation (doing what is already done better today), sustaining innovation (new products, services and geographies within the current industry) and transformative innovation (engineering the business of the future supported by new business models) helps to contextualize the different risks and rewards. Confusion about the types of innovation needed can result in misaligned expectations between leadership and teams. A company that focuses solely on efficiency innovation may be effectively heading for the death of its business.

Professionalization of innovation
Innovation should not be treated as a hobby or a sideline. Organizations that succeed in this field invest in robust processes and training. Design thinking and corporate innovation exemplify frameworks that help create a culture of innovation by providing practical tools that facilitate the discovery, development, testing, and execution of ideas.

Satisfaction gap
According to data from major consulting firms such as McKinsey, there is a disparity between the perception of the importance of innovation and satisfaction with the results achieved. Many companies recognize the need to innovate, but the lack of adequate resources, training and processes results in a gap in execution. Furthermore, research shows that to find a “grand champion” it is necessary to experiment with several projects, a principle that venture capital funds understand very well. This approach, however, is rarely adopted by organizations, which often seek certainty in increasingly uncertain contexts.

Causes and obstacles
It’s hard to pinpoint just one factor. Major obstacles include lack of leadership involvement in innovation, lack of time dedicated to the topic, lack of adequate training and tools, and nonexistent or ineffective processes. Organizational cultures can be resistant to risk, and leaders often focus on immediate results, neglecting long-term initiatives. Innovation requires a shift in mindset and the recognition that many ideas can fail because, at the outset, there is only a set of hypotheses about what might be successful. Assumptions need to be tested in practice, just as in the scientific method.

Strategies for Overcoming the Paradox
Some strategies to address these challenges include involving the CEO and senior management in the innovation agenda (as proposed by Rita McGrath), implementing specific time to innovate, such as the “20% rule” inspired by Google, which allows employees to dedicate part of their time to innovative projects, and even creating internal accelerators. Open innovation initiatives and tools such as Adobe Kickbox or the DHL Startup Lab Playbook can help systematize and boost idea generation. However, more than one type of initiative or another, it is important to know the different possibilities and, within the context in which the organization operates, design the innovation strategy.