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4 Key Challenges of Innovation Management

Ilkka Auer

Co-founder, CEO

May 23, 2023

Welcome to the world of innovation management! This is a place where every day is filled with endless possibilities and the next big breakthrough is always just within reach. However, the path to innovation is not always a smooth one. Innovation is a critical part of the modern business landscape, but managing it can be quite challenging. It's like navigating a complex maze - it demands skill, patience, and a strong understanding of the territory.

As the ones in charge of managing innovation, we are at the forefront of this journey. We are the trailblazers leading our organizations towards new frontiers, pushing the boundaries and breaking new ground. It's an exciting role, but it also comes with its fair share of complexities.

Whether it's tying innovation to business strategy, building a culture that welcomes change, or dealing with limited resources and feasibility issues - we've all experienced these. And then there's the task of leading and measuring the innovation efforts. Sounds familiar, right? However, these challenges aren't unbeatable. In fact, they can be opportunities for learning and growth, helping us refine our strategies and improve our skills.

In this blog post, we'll explore four main categories of challenges in managing innovation: Strategy, Culture and Execution Challenges; Resource and Capacity Challenges; Process and Feasibility Challenges; and Leadership Challenges. We'll dive deep into each one, discussing what they involve and how they might show up in your organization.

But we're not stopping there. We'll also share useful tips and strategies to help you tackle these challenges and use them as stepping stones towards a more innovative future.

1. Strategy, Culture, and Execution Challenges

Innovation is more than just a buzzword. It's a vital element of your business strategy, ingrained in the culture, and reflected in the way your organization operates. However, aligning innovation with business strategy, fostering a culture of innovation, and ensuring its effective execution can be quite challenging. Let's take a closer look:

Alignment with Business Strategy

Innovation should not exist in a vacuum. It needs to be tied to your business strategy and should contribute to your organization's overall goals. This alignment ensures that your innovation efforts are purposeful and value-adding. However, bridging the gap between innovation and business strategy is often easier said than done. This is where clear communication of strategic objectives, frequent alignment checks, and ensuring innovation projects are aligned with the business strategy become crucial.

Therefore it's crucial to balance creative freedom and strategic alignment within the innovation teams. A common pitfall is either providing too much restriction, rendering teams as mere extensions of traditional development, or granting excessive freedom, leading to a lack of a clear innovation agenda. The optimal balance allows teams to explore and experiment, yet within a framework that aligns with the organization's objectives.

Innovation efforts must complement the organization's overall strategy. Misalignment can lead to ideas that, while innovative, are difficult to integrate into existing operations, wasting resources and potential opportunities. Successful innovation requires a strategic approach that fosters a creative yet result-oriented environment.

Building a Culture of Innovation

An organization's culture significantly influences its ability to innovate. A culture that embraces change, encourages risk-taking, and rewards creativity is more likely to foster innovation. However, building such a culture can be a daunting task, especially in organizations that are traditionally risk-averse or where change is resisted. Patience, constant communication, and leading by example can go a long way in driving cultural change.

Execution of Innovation Initiatives

Even the most brilliant ideas can fall flat without proper execution. It's one thing to brainstorm innovative ideas, but bringing them to life is a different ball game. This involves managing project timelines, coordinating teams, and ensuring the idea is translated into a tangible outcome. Challenges in execution can range from lack of clarity in roles and responsibilities to delays in decision-making. Robust project management practices and clarity in communication can significantly enhance the execution of innovation initiatives.

Remember, strategy, culture, and execution are interconnected and mutually reinforcing. A strategic approach to innovation, backed by a supportive culture and effective execution, can pave the way for a successful innovation journey. We will also discuss the importance of systematic process more in the section 3.

2. Resource and Capacity Challenges

The innovation process requires substantial resources and capacity, including time, funding, and skilled personnel. However, these resources are often limited, making it a challenge to manage innovation effectively. Here's how to navigate these hurdles:

Time Constraints

Innovation takes time – time to ideate, develop, test, and implement new ideas. Yet, time is often in short supply, with teams already stretched thin managing day-to-day operations. One strategy to overcome this hurdle is to dedicate specific time for innovation, creating a balance between daily tasks and innovative work. There are two approaches for achieving this: either allocating certain percentage of working time to be spent for innovation or alternatively timeboxing sprints when team members are allowed to spend 100% of their time into innovation. These sprints can for example be focusing into running set of experiments to develop new ideas into validated concepts.

Limited Capital or Investment

Investment is a critical fuel for innovation. From research and development to prototyping and market testing, each stage of the innovation process requires funding. However, securing sufficient capital can be a significant challenge, especially in cost-conscious environments. Organizations must, therefore, establish a clear business case for innovation initiatives, highlighting potential ROI to secure necessary funding. However this can be really difficult because of the uncertain nature of innovation and lead into extreme variability between estimated business cases and realised results.

Therefore instead of spending too much time on trying to build a perfect business case and budget from the very beginning, it's more recommended approach to use metered funding to increase your bets incrementally and providing follow-up funding when evidence from experiments suggest risk reduction and real-world project potential.

If you want to learn how to establish clear metrics for metered funding our team is happy to help on that.

Shortage of Skilled Personnel

Innovation requires diverse skills – from creativity and critical thinking to technical expertise. Yet, finding and retaining such talent can be challenging, especially in today's competitive job market. Strategies such as continuous learning and development programs, hiring for diverse skill sets, and fostering a culture that attracts and retains talent can help tackle this challenge.

Overcoming resource and capacity challenges requires strategic planning, creative thinking, and sometimes, a willingness to make tough decisions. But remember, the investment in innovation today can yield substantial dividends in the future.

3. Process and Feasibility Challenges

The innovation journey can be a complex and winding road, with numerous potential pitfalls along the way. These can range from technical feasibility to workflow management, all critical components of a successful innovation process. Here's how to navigate these challenges:

Product Development Challenges

Developing a new product or service is often the heart of innovation, but it presents its own set of challenges. From generating ideas (ideation) to ensuring the product is market viable and developing a clear product roadmap, each stage has potential hurdles. Innovation is 20% creative problem solving and 80% systematic experimentation and learning. By establishing a clear and repeatable process, these challenges can be systematically addressed. This not only gives you more capacity to execute and experiment with a larger number of initiatives but also saves a great deal of energy for innovation teams so they can thrive in the most challenging part - which is the creative problem solving.

Workflow Management Issues

Efficient workflow management is crucial for innovation. It ensures that different teams and departments work cohesively towards common innovation goals. However, managing workflows can be a challenge due to issues such as unclear communication, lack of goals, or lack of stakeholder support. Clear communication, defined roles and responsibilities, and stakeholder engagement are key to overcoming these challenges.

Technical Feasibility

Technical feasibility is a significant consideration in innovation. An idea may sound great on paper, but if it's not technically feasible, it can't be implemented. Organizations must have mechanisms to assess the technical feasibility of ideas early in the innovation process to avoid investing in unworkable ideas.

Tackling process and feasibility challenges requires a methodical approach, technical expertise, and effective project management. With the right approach and tools, you can turn these challenges into stepping stones on your path to innovation success.

4. Leadership Challenges

Innovation is not a ship without a captain. It requires strong leadership to steer the course. Here are some of the key leadership challenges encountered in managing innovation:

Creating Excitement

The role of a leader in fostering an environment conducive to innovation cannot be overstated. A crucial aspect of this is creating and maintaining excitement around innovation initiatives. Leaders should be the catalysts of enthusiasm, continually infusing energy into innovation efforts.

Executing with a Clear Strategy

Clear and concise strategic planning is vital in the innovation process. Leaders must establish clear goals and communicate them with transparency, providing a roadmap for team members to follow. This clarity not only aids in focusing development efforts but also instills a sense of purpose in the team's actions.

Creating a Plan & Communicating with Transparency

Innovation cannot thrive in an environment of ambiguity. Leaders must devise a solid plan for change and communicate it with utmost transparency. This eases the adoption of innovation within the organization and allows innovators to concentrate on their creative tasks without additional worries about their innovation's organizational fit. This is also where previously mentioned clear strategy and systematic, repeatable processes become important. With the clear strategy everyone in the organisation what we are exploring and why this is important in terms of future success and systematic process helps to communicate how the projects are proceeding on their journey.

Pushing the Change

Leadership in innovation also entails pushing for change. This does not imply imposing strict control but rather providing gentle nudges and directional guidance to further change. Light forms of control—such as encouragement, feedback, and adjustment—are essential to transforming potential innovations into reality.

Measuring Innovation Performance

One of the more nuanced challenges leaders face is determining how to measure innovation performance. Traditional metrics like ROI may not fully encapsulate the value of the innovation, necessitating the development of alternative measurement approaches that better reflect the innovation's true value and impact. Scale platform helps organisations to tackle these challenges. Using our platform organisations can turn their innovation project data into actionable insights, which help teams to accelerate their ideas to market significantly faster.

In summary, as a leader managing innovation, your role isn't just about tackling these challenges, but also about turning them into opportunities. Your leadership can ignite the spark of creativity, guide your team through the innovation journey, and, ultimately, shape the future of your organization.


Facing and overcoming innovation challenges is a crucial part of any organization's growth journey. From understanding the need for design thinking, addressing product development challenges, fostering a supportive cultural environment, to implementing a clear and strategic approach, each aspect plays a pivotal role in the success of innovation.

However, it's important to note that these challenges aren't one-time hurdles but recurring aspects that need constant evaluation and adjustment. Innovation is not a destination, but a journey. It requires continuous learning, iterating, and improving. The key is not to avoid these challenges but to build the resilience and agility to navigate through them.

By acknowledging these challenges and proactively addressing them, organizations can transform these potential obstacles into stepping stones towards successful innovation, thus driving growth and competitive advantage in an ever-evolving business landscape. Remember, the challenges of today pave the way for the innovations of tomorrow.

At Scale Company, we have developed a solution that makes innovation management significantly more predictable.

Our solution allows organisations to start measuring progress and tracking the success of their innovation efforts in a more effective way.

Want to learn how we can help your organisation?
Book a demo with us!