UK: What Is Your Main Inhibitor To Innovation?

Last Updated: 18 June 2015
Article by BDO LLP

Many organisations with which we work have a good understanding of what is driving their need to innovate.  Of course, most are also very quick to explain why delivering on innovation is a particularly hard task!  Sometimes it feels that every organisation believes that they face a uniquely hard set of challenges.

It is not only those businesses setting out on the first steps of their innovation journey that face barriers.  Sometimes organisations grow quickly and, in maturing, find that they seem to have less room for innovation. However, when companies don't have an entrepreneurial or innovative element, they start to slip into a more passive mode, which can be dangerous.

Our feedback from working with a wide range of medium sized businesses was that those organisations that have been focussing on innovation for a long period of time tend to perceive entrenched cultures and structural challenges as the primary drivers.  However many others focus on more tangible barriers so we conducted a survey around four of the most common.

What is your main inhibitor to innovation? 

Lack of funds 36.84%
Lack of employee time 31.58%
Concerns around IP 7.89%
Lack of innovative talent 23.68%

We found that there was a reasonable balance between the top three potential inhibitors.  In reverse order, lack of innovative talent was cited by 24% of our respondents as the most challenging hurdle.

Very few organisations saw IP concerns as a main inhibitor.  However, if you would like to read more about IP, our guide to commercialising cleantech is coming out soon and deals extensively with this issue. 

Our conversations with more than 200 business leaders showed us that having the right people is not just about having creative inventors with lots of good ideas.  Innovation is also about commercialising ideas and having a capable team to deliver the different steps of the innovative process.

The next most significant issue identified by our respondents is time.  Time is a scarce commodity for medium sized businesses.  Asking employees to take time out to focus on "innovation" is a big ask – and means many innovations projects fail to get off the ground.  One of our interviewees told us that "it is one thing having creative people but unless they have time to be creative all their skill will go to waste." Meanwhile, a highly innovative IT business told us that they also saw a lack of time as being the biggest barrier in meeting goals:  "We look back at ideas or reflect on things that didn't get done and we ask ourselves 'why didn't that get done' and then we realise it's a lack of time" said the MD.

The biggest issue was, inevitably, a lack of funds.  It is easy to argue that good innovation will find the funds it needs but whilst mid-sized businesses can often be the most agile due to their size, they often struggle to find the financial resource to fund innovation. Having sufficient capital is crucial to fund many innovation projects, and many are stifled due to lack of funds.  One of our interviewees told us that many organisations are "so tightly managed" it is very difficult to find the money to realise innovative projects.

So, whilst cultural challenges can be a big issue, addressing resource constraints is seen by many firms as the biggest barrier to innovation.  Time, people and money all link together and whilst it is not possible to conjure resources out of thin air, a clearly articulated business plan with a strong focus on commercial outcomes can help unlock the necessary investment.

FIND OUT HOW TO EMBED INNOVATION IN YOUR BUSINESS

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