Too focused on the bottom line
Oftentimes, the easiest way to get things done is to demonstrate the ROI. But when it comes to fostering innovation, ROI can be hard to prove. Therefore, innovation often never gets off the ground, because it is seen as too risky if the person behind the idea can't demonstrate how the company will profit. The study reports that 7 percent of respondents see an "inability to justify ROI" as the biggest challenge to innovation. "Even very senior executives had no real way of accounting for what they're spending on innovation. They didn't have that calculation. It didn't exist as a line item and they had to try and fudge or guess from different parts of the actual corporate ledger," Townsend says.
For executives, the idea of embarking on a new plan without a clear idea of the ROI might be nerve-wracking, but it's the only way to see if an idea will actually work. If a business is hung up on proving the financial benefit of an innovative idea before it launches, it'll probably never get off the ground. Townsend says it goes back to the idea of properly funding innovation and ensuring there are resources behind it, because that's the only way innovation won't wind up being an abandoned afterthought.