Fortune 1000 innovation health verbatim comments

10 Key Obstacles In
Innovation Performance
A Summary Of Findings & Respondent Verbatim Comments From A
Recent Study Of Innovation Culture, Orientation, And Performance Inside
Fortune 1000 Companies
© 2014 Lodestar. All rights reserved. Confidential & Proprietary. 1

Introduction
At the end of a recent study of innovation culture, orientation, and performance inside Fortune
1000 companies,, Lodestar and our Canadian partners, Strategian, posed this open-ended
question:
What has been your biggest challenge in advancing innovation
initiatives inside your company?
Our goal was to capture the “voice” of the Fortune 1000 innovation practitioner and let
respondents share in their own words what was most top-of-mind for them in terms of their
day-to-day challenges in managing innovation inside their organizations.
280 usable responses were received, many quite thoughtful, detailed, and covering more than
a single innovation issue or challenge.
Content analysis yielded a classification framework of responses by theme/topic which
is presented on the following pages along with representative, illustrative verbatim respondent
comments.
2

Lodestar-Strategian Fortune 1000
Culture Of Innovation Performance Survey
Verbatim Comments: What has been your biggest innovation challenge?
280 responses were classified into 10 categories. Sample verbatim comments by topic/theme
are presented on the following pages.
Open-Ended Question
Response Topic/Theme
Frequency
(n=280)
Organizational Structure, Culture, Mindset, Openness to Risk,
Resistence to Change, Inertia, Moving From Status Quo
26%
Tools, Non-Financial Resources, Processes, Roadmaps, Blueprints,
Performance Measurement/ROI to Support Innovation
14%
Senior Management, Corporate Leadership, Commitment to Innovation,
“Walk the Talk”, Setting Innovation Priorities
13%
Funding/Resources for Investments in Innovation 11%
Execution, Seeing Innovation Initiatives
Through to Fruition, Staying the Innovation Course
8%
Gaining Cutomer Input to Drive Innovation;
Customer Acceptance of Innovation Outputs
6%
Building the Business Case for Innovation, Innovation Business Model,
Securing Management Approval
5%
Compliance/Regulatory/Legal Issues
(primarily among heathcare and financial services respondents)
4%
The Economy 4%
Miscellaneous 9%

Open-Ended Question
Response Topic/Theme
Frequency
(n=280)
# 1: Organizational Structure, Culture, Mindset, Openness to Risk,
Resistence to Change, Inertia, Moving From Status Quo
26%
“In today's economy our biggest challenge is in cultivating a culture where more associates think ‘outside the box’. This is very difficult to do
when associates are, for the most part, maxed out in terms of time with their current responsibilities.”
“Our biggest challenge is cultural. Our organization lacks a history of successful innovation and has not
yet committed to the effort and focus required to make innovation successful in the future.”
“The biggest challenges are with the employees who do not see this as a good thing and they feel threatened and/or they just do not like
change. There have been smaller meetings involving people who are specifically involved in the areas where there may be the most change
and this has been helpful for some of them. Communication is key! Best wishes.”
“Our biggest challenge is getting operations to embrace innovation
and help to implement change in our organization to facilitate innovation. Thank you for conducting this study!”
“I think our greatest hindrance to innovation is organizational inertia. We are a mature company that has developed a risk-averse culture.
Having a brand that is one of the most widely known in the world means there are continual moves to protect that brand which inhibits
innovation and risk-taking.”
“We talk a lot about being innovative but balk at the cost and effort to do so. We know we must be innovative
in order to keep up with our competitors, but lack the will to do anything about it. We tend to want to repackage what we already have and
use and call that implementing new technology.”
“Convincing colleagues that change is worth the risk.”
“We are not risk takers and we don't invest in innovation. But we also most importantly don't train or create
the environment for employees to either be innovative or offer ideas.”

“Our biggest challenge to innovation initiatives is resources. We keep trying to do what we've always done while at the same time with the
same people look for opportunities to implement innovative processes.”
“Our organization does not do well with change - partly due to a lack of knowledge about the industry
and partly due to lack of access to data to make decisions.”
“Our challenges include the process to vet ideas allowing only the strong to survive. If this step is too stringent we end up with too little
innovation. If this step is too loose we end up with innovation that does not sell, leading to waste and a negative P&L.”
“Telehealth has worked very well and we are leaders in that area.
Our challenge is being able to measure the benefits.”
“Our organization gives a tremendous amount of lip service to innovation,
however no processes are in place to aggregate creative solutions from employees.”
“Our biggest challenge has been ‘organizing’ around innovation internally. We are good at leveraging
external resources for the next big idea, but have not built the muscle internally as of yet.”
“We have an entrepreneurial culture but it is very grounded in the current technologies, processes and business models. Our margins are
very thin so it is very difficult to encourage a lot of innovation without the risk of damaging the near-term profits. We talk a lot about the
issue but we do not have tools in place or incentives that would drive further development of innovation.”
“Innovation in preparing for the next big thing is something we talk about,
but I have not seen a blueprint to get there.“
Open-Ended Question
Response Topics/Themes
Frequency
(n=280)
# 2: Tools, Resources, Processes, Roadmaps, Blueprints,
Performance Measurement/ROI to Support Innovation
14%

Open-Ended Question
“Currently, our executives are very reactive instead of proactive to trends and new markets.”
“The biggest challenge is managing innovation with limited resources and selling it to upper management that has no experience or
knowledge with my areas of responsibility.”
“The biggest challenge for innovators is getting the trust of senior management who control resources. In large organizations there is a
strongly risk averse component since outcomes need to be positive for projects. Thus innovation is avoided due to lower POS and fear
that a program will be considered a failure and a waste of resources. This creates a vicious cycle of risk avoidance and lack of
innovation leading to inferior programs and products.”
“Upper management in this organization does not necessarily embrace innovation based on potential.”
“Fearful leadership has been a barrier. Top down leadership and need for ‘control’.
A lot of talk about innovation but no authentic outcomes.”
“Since I work for a Fortune 5 company, the biggest challenge is getting innovative ideas to be accepted
and approved by technical and corporate leadership.”
“A senior leadership team that micromanages innovation processes – and kills them dead in the process.”
“At this company, we are attempting to incorporate innovation into our process by providing a safe way for people to offer up
suggestions and then discuss how they could help our mission. Unfortunately, with funding always being the top of the list, our senior
leadership tends to take a position of looking at what we do and cutting, rather than looking at what we do and innovating. Old school
short -sighted thinking.”
Frequency
(n=280)
#3: Senior Management, Corporate Leadership, Commitment to
Innovation, “Walk the Talk”, Setting Innovation Priorities
13%

Open-Ended Question
“Our biggest challenge to innovation initiatives is resources. We keep trying to do what we've always done while at the
same time with the same people look for opportunities to implement innovative processes.”
“Biggest challenge within the company is reaching for innovation with shrinking and inadequate resources.”
“The biggest challenge is having the capital to move the innovative ideas forward to be first to market service.”
“The biggest challenge is garnering the funding we need to execute the ideas.”
“The biggest challenge has been to get funding for new, untested methodologies.”
“Biggest challenge - cash resources.”
“Our innovation initiatives have to be planned and thought out very carefully
because of our funding sources. Our biggest challenge is funding.”
“Money to invest in the venture is always the final stumbling block.”
Frequency
(n=280)
#4: Funding/Resources for Investments in Innovation 11%

Open-Ended Question
“Our biggest challenge to innovation initiatives is resources. We keep trying to do what we've always done while at the same
time with the same people look for opportunities to implement innovative processes.”
“Moving from prototype to scaled-diffusion is a big challenge, as is innovating with products.”
“Predictability has been our biggest challenge. We often proceed with our ideas, but
they tend to evolve into something different half way through.”
“A challenge is the constantly changing processes that underpin the search for innovation in certain categories.
Another issue is the fact that it is easier to present a compelling visionary landscape based on
breakthrough innovation than actually delivering it.”
“Once every few years we make a big push, but it always fizzles.”
“Still our biggest challenge is carving out resource time to execute these great projects while
the business is booming. Hard to keep focus on Innovation and still serve our
customers today!!”
“Where we fail to provide the proper leadership, we struggle with the creation of ideas
and usually have failed implementation.”
Frequency
(n=280)
# 5: Execution, Seeing Innovation Initiatives
Through to Fruition, Staying the Innovation Course
8%

Open-Ended Question
“Biggest challenge is getting customers to take a chance on new/innovative ideas/technology.
No customer wants to be serial no. 1 on a new product.”
“Biggest challenge with innovation is staying focused on the customer’s needs; it is easy to go off on tangents.”
“We've moved mountains to innovate in areas that our competitors were unable or unwilling to tackle. However, we've
done a poor job of asking the market about the business problems that need solving and have instead decided unilaterally
that the market will appreciate the innovations we create. That has often not been the case.”
“Our biggest challenge to innovation initiatives is resources. We keep trying to do what we've always done while at the
same time with the same people look for opportunities to implement innovative processes.”
“We don't lack for product ideas and innovations. We have been challenged in some areas to
commercialize it, but generally speaking we have not invested in making customers
want to do business with us.”
“Our primary challenges is creating an innovation portfolio that not only addresses
today's customer opportunities, but also tomorrow's.”
Frequency
(n=280)
# 6: Gaining Cutomer Input to Drive Innovation;
Customer Acceptance of Innovation Outputs
6%

Open-Ended Question
Frequency
(n=280)
# 7: Building the Business Case for Innovation, Innovation Business
Model, Securing Management Approval
“Difficulty in adopting 'new ideas' (businesses, processes, etc.) is often encountered when the new model has not been fully
proven. This is where we see the disconnection between driving for innovation and taking action. Fiscal conservatism can often
counteract the great leap forward.”
“Significant amount of effort is involved in getting upper management buy in. Proof of concept is an important element in securing
that buy in.”
“Justification of significant capital investments into new tools and software has required comprehensive justification and often failed
to convince management and get approved.”
“Biggest challenge: creating a business model to support disruptive innovation development.”
“Challenges include backwards compatibility, reluctance to change what is working without understanding
the value proposition and will to risk the resource expenditures needed to pursue new opportunities.”
“Ensuring that investments are allocated not only to support existing core products, but also blue ocean projects.
This assumes a certain amount of organizational risk, but also ensures a good growth trajectory for the organization.
Getting the Executive Team to understand that a level of risk is required to meet future growth is key,
and that not every investment will meet it's business drivers is the expectation
that needs to be understood and set.”
“As a company we have measurement criteria to insure innovative ideas are monitored from inception through commercialization
that sometimes seem restrictive to quick movement. This is coupled with a conservative approach to investment to make an
atmosphere that at times seems overly restrictive and risk adverse.”
5%

“Developing new service line strategies. The biggest challenge is working under regulatory constraints.
Also having capital investment in the ever-changing healthcare environment.”
“A huge challenge in the world of banking and finance is the ever-increasing role of
compliance, both national and international.”
“Resources and that fact that our world is heavily regulated and audited. We might want to innovate,
but cannot due to regulations or audit expectations.”
“Biggest challenges have been working in a highly regulated environment and given all of the
opportunities to be innovative we are restricted because of the FDA.”
“Our largest obstacle to innovation in the healthcare provider market is overwhelming
regulatory burdens and shrinking revenue from Federal payer programs.”
“We have smart, creative people that could innovate much more than we currently do, but we are in a unique and unusual
situation of being heavily regulated and with additional Congressional oversight on our business. The uncertainty of our
future and the future state of our industry is the biggest challenge to any innovation or strategic planning.”
“Lack of adequate funding, state regulations, micromanaging from the top, a refusal to embrace change at the top. “
“The biggest challenge has been government cutbacks in funding for our clients
without corresponding relief from regulatory burdens.”
Open-Ended Question
Frequency
(n=280)
# 8: Compliance/Regulatory/Legal Issues
(primarily among heathcare and financial services respondents)
4%

“The biggest challenge has been the poor economy.”
“In this rough economy we were challenged to reduce all expenses by offering multiple choices to customers
to accommodate their needs into our business model with their available budgets in an effort to
increase customers loyalty, but also increase the company's margins.”
“The economy is our biggest challenge.”
“Our biggest challenge is the poor economy.”
“The economy is our biggest innovation challenge – hands down.”
Open-Ended Question
Frequency
(n=280)
# 9: The Economy 4%

Open-Ended Question
“I have personally improved a number of these processes yet there's been no reward for doing so. I believe
that also impedes innovation. People lack the concern for innovation because they are not incented to do so
and figure someone else will do it.”
“What has not worked well was coming up with the next 'big idea' and then asking everyone to implement it.”
“Our biggest challenge is to balance the need for rigor against the ambiguity of truly novel products.”
“Biggest challenge: getting to understand the international markets and their business cultures.
Various complexities, yet exciting challenges in prospering markets!”
“Our biggest challenge is getting operations to embrace innovation and
help to implement change in our organization to facilitate innovation.”
“Biggest challenges: competing priorities and little agility in IT.”
“The biggest challenge in enterprise innovation aligns perfectly to the classic problems defined and
described by Clayton Christensen in the Innovator's Dilemma.”
“Biggest challenge to innovation is effective leadership in management and the ability to pair talent/skills with
the best tools for innovation. I'm speaking innovation from a data perspective to drive business decisions. If
you build a Formula 1 racecar (data infrastructure and toolsets), but have a grandma to drive it, your ability to
innovate will be limited.”
Frequency
(n=280)
# 10: Miscellaneous 9%

Lodestar Background
Lodestar is an evidence-based advisory services firm that specializes in helping
clients create, manage, and utilize information and intelligence of all kinds to solve
complex business problems. Our work has two goals: improve business
performance and drive growth.
The firm is built around five major practice areas:
! Information Management
! Innovation
! Marketing Strategy & Performance
! Marketing Research & Marketing Sciences
! Strategy Acceleration
In addition, we offer specialized services in areas such as competitive intelligence,
technology scouting & intellectual property assessment, future forecasting,
performance measurement & ROI assessment, marketing communications, strategic
planning, change management, and organizational effectiveness.
Lodestar works with Fortune 1000 and SMB clients across a variety of industries
including financial services, healthcare, media & publishing, technology, professional
services, manufacturing, and the public sector.
We achieve our work through a team of 35+ PhD-level researchers, analysts,
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technologists as well as a global network of strategic alliance partners.
For more information, visit our website at www.lodestarlink.com. For more on how
we think about brand and marketing effectiveness, visit our blog at
www.lodestarpartnersblog.com.

for more information:
Dr. Tom Nelson
President & CEO
Lodestar Advisory Partners
174 Nassau St. – PMB 330
Princeton, NJ 08542
215.801.0521
Tom.Nelson@LodestarlinkAP.com
www.lodestarlink.com

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