Scott Kirsner’s HBR article, The Biggest Obstacles to Innovation in Large Companies, analyzes a survey of large companies who were asked about obstacles they face when tackling innovation.  Top responses include the importance of politics, lack of executive alignment, a culture that doesn’t embrace change, and an inability to react to disruptions.

I couldn’t agree more with Kirsner’s assertions – they’re central to our work at enlight because executive alignment, planning for change, and designing a business model that can handle a little disruption are critical to positioning a company for long-term value creation. I applaud the article for identifying key barriers.  And based on our experience, I’d add two more barriers that stifle innovation:

Barrier 1: Lack of Understanding

‘Business model’ is one of the most over-used and ill-understood terms in business. If you ask ten different people to define the term, you will undoubtedly get at least ten different answers…plus a couple of blank stares. A business model, as the post suggests, is simply how the company makes money delivering value to customers. It is determined by the revenue and cost drivers of the business. At enlight, we view defining the business model as one of the three critical elements of determining the company’s strategy. (The other two elements are: 1) target customers and 2) the unique value you deliver to customers.)

Barrier 2: Lack of Customer Intimacy

Not only will customer intimacy reveal flaws in business models, but it will also reveal opportunities for innovation. Unfortunately, most companies are too busy trying to control the message or convince customers that they don’t take time to listen. Really listen. Embrace complaints and praise equally. Ask questions. Observe. Learn from your customers. Learn about them. The investment is invaluable. Countless opportunities to innovate will reveal themselves.

At enlight, defining our client’s business model and exploring ways to innovate is central to positioning companies for long-term value creation. Once we define the business model, we begin to get to know the company and customers to identify ways to refine it and innovate.