The word “innovation” is as commonly used as “optimization,” “synergy,” and “I’ll be ready in five minutes.”

Organizations that build a culture of innovation reap benefits in employee satisfaction and ROI. COOs, Directors of Operations, and even Directors of Innovation, oversee the progression of business processes, but the potential risks of innovation can bog down or paralyze a potential success.

Here is why you shouldn’t innovate: you have to interrupt the proven, optimized, and synergized workflows that already have forecasted ROI.

If you’re involved in operations on any level, you probably just cringed. You don’t have to be a COO to understand that to get drastic results, change and drastic measures are needed and normal. Everyone understands that, so why isn’t every business innovating?

Many operations leaders are held back by money, the potential risk, or they think that new products equates to innovation.

Why companies don’t innovate


Consulting group Booz and Company has consistently found in their Global Innovation 1000 study that R&D spend has no correlation to financial performance. They actually found that the top 10 R&D spenders did not have as much revenue growth or market capitalization compared to their industry peers.

For example, Apple spends less than 2.5% on R&D as opposed to the industry median of 6.5%, and they’ve been named the most innovative company for the past 3 years in a row.


It is a common misconception that innovation is inherently risky.

As Inc. Magazine’s Adam Bluestein states in his article “Debunking the Myth of Innovation,” on average the most successful companies devote about 70 percent of their innovation assets (time and money) to “safe” core initiatives (optimizing internal workflows); 20 percent to slightly more risky adjacent ones; and just 10 percent to transformational or disruptive ones. Such companies outperformed their peers. (Read the full article by Adam Bluestein here)

The lie that a new product = innovation

According to research done by Doblin Innovation Consultants, organizations that spend the most R&D resources on producing new products don’t get an ROI (only a 4.5% success rate).

They found that the highest ROI was in optimizing the customer experience, internal processes, and their own business models.

But, when you do come out with a new product, Uri Neren, an acclaimed pioneer in the industry of innovation said, according to a post on Forbes, “Obsolete yourself. Reward engineers and R&D for building, designing, or concepting the next innovation that will act to obsolete one of your products or processes before the competition does it for you.”

Apple does this wonderfully. While they do come out with new and unique products that are risky, they obsolete everything they make. Their competition can’t obsolete Apple because Apple has already done it.

Turn it around

If your company has lost the drive to innovate, start by optimizing internal processes. They have the lowest risk and the greatest ROI. Part 2 of this series, Why Your Company Isn’t Being Efficient, is now posted- check it out!