Why do some of the world’s biggest companies end up blindsided? The problem is often internal. Silent killers inside companies often undermine innovation, leaving even industry giants vulnerable. Companies like Yahoo and Adobe, once leaders in their fields, fell victim to internal blockers that stifled innovation, blinding them to the disruptive changes that happened outside.
Open innovation isn’t just about inviting fresh ideas from startups and external partners—it’s about overcoming the deeply embedded obstacles that can suffocate new opportunities. This article reveals these hidden threats, how to spot them, and how to fight back.
The Silent Killers & How to Spot Them:
1. Fear of the Unknown
How to Spot It: Teams hesitate to explore new areas or share resources with external partners. They are comfortable with “business as usual,” anything novel is met with resistance or skepticism.
Why It Matters: The fear of the unknown can paralyse even the most capable organisations. Consider Klarna, the Swedish Fintech, which disrupted the payments space by offering buy-now-pay-later (BNPL) solutions when traditional banks and financial institutions hesitated to embrace this new model. Established financial players were initially wary of this shift, fearing increased consumer risk. Klarna capitalised on this hesitation, pushing the BNPL concept and now has 150mn consumers globally and processes 2mn payments a day. The hesitation of traditional banks to embrace this shift left them playing catch-up in the rapidly evolving digital payments market.
How to Fight Back: Foster a culture that sees the unknown as opportunity. Internal training on the benefits of external partnerships, joint pilot projects, and embracing diverse ideas can help teams grow more comfortable with risk and uncertainty. Encourage and reward experiments, no matter the outcome.
2. Hidden Bias Against External Ideas
How to Spot It: Look out for phrases like ‘We’ve tried that’ or ‘That won’t work here. These are signs of ‘Not Invented Here’ syndrome, common in big companies
Why It Matters: The “Not Invented Here” bias was a major factor in Xerox’s struggles to capitalise on its own ground-breaking technologies. Yahoo, once worth $125bn, turned down chances to buy Google and Facebook, underestimating external potential.
How to Fight Back: Regularly highlight successful external innovations, both within your industry and beyond, as examples of positive disruption. Reward those who embrace external perspectives and build connections.
3. The Corporate Bureaucracy Bottleneck
How to Spot It: Nimble initiatives get buried in approval processes and inter-departmental red tape. Look for delays, authority confusion, and outdated metrics for new projects—symptoms of bureaucracy strangling progress.
Why It Matters: In 2012, then-CEO Jeffrey Immelt aimed to transform GE into a “top 10 software company” through GE Digital, which was meant to lead the adoption of the industrial internet. However, the ambitious vision crumbled under the weight of corporate bureaucracy. The unit was subjected to traditional matrix structures and used KPIs that were irrelevant to innovation. Immelt himself admitted that the opposing norms of GE’s industrial and digital sides—slow vs. fast, risk-averse vs. risk-taking—eventually stifled the transformation.
How to Fight Back: Think beyond your four walls to avoid stifling innovation. Set up independent, cross-functional teams with the authority to make decisions without needing approval from every department. Set KPIs that track learning speed, pilot success, and engagement, not just revenue. Fast-track ideas before bureaucracy kills them. Additionally, leverage external partnerships to bring in fresh perspectives and utilise outside resources to bypass internal constraints. Working with startups, research institutions, or even other corporates can infuse agility and expertise that might be missing internally.
4. Risk Aversion Masked as Prudence
How to Spot It: Phrases like ‘Let’s review next quarter’ often hide fear of failure. Teams call it ‘being careful,’ but it’s often just fear.
Why It Matters: Risk-averse cultures stifle transformative ideas. Consider Canva, which entered the content creation space by offering simple, user-friendly design tools for non-professional users. While Adobe dominated the professional design market, it was slow to react to this new wave of democratised design. By the time Adobe introduced simpler tools and a freemium model, Canva had already captured millions of users globally, proving that the fear of disrupting existing revenue streams can stifle necessary innovation.
How to Fight Back: Encourage a ‘safe-to-fail’ mindset where small experiments are celebrated, regardless of the outcome. Sharing risk with partners encourages bolder moves. Use frameworks like rapid prototyping to take calculated risks without committing all-in upfront. Finally, use risk assessments as tools for informed action—not as barriers to progress.
5. Disconnected Expectations and Misguided Focus
How to Spot It: Innovation teams see value in partnerships, but other departments are stuck on immediate goals. There’s a heavy reliance on senior stakeholders to approve initiatives, leading to slow decision-making. Startups, meanwhile, expect rapid scale, while corporates assume startup flexibility is limitless, resulting in a clash of expectations. Miscommunications often arise when expectations aren’t set early, leading to frustration and unmet goals when partnerships are on the table.
Why It Matters: Misguided focus and a lack of awareness around the true dynamics of partnerships lead to frustration, missed opportunities, and stagnation. Walmart, for example, hesitated to move aggressively into e-commerce, allowing Amazon to dominate online retail. Startups that could have helped Walmart scale its digital operations, eventually went to other players, forcing Walmart to make expensive acquisitions to catch up. But now, even Amazon—the original disruptor in the retail space—faces its own challenges from the rise of platforms like Temu, which is gaining traction with its low-cost, cross-border e-commerce model. Temu’s approach proves that even disruptors must stay vigilant and agile to maintain their lead.
How to Fight Back: Start partnerships with clear goals—clarity prevents disappointment. Create a culture where partnership and external collaboration are core values, not added extras. Hold regular check-ins and appoint liaisons who understand both sides.
Conclusion:
Innovation often fails silently from within. The companies that thrive are those who stay vigilant and are willing to confront these silent killers head-on. By identifying these obstacles and fostering openness, you can unlock your organisation’s full potential.
Are you ready to spot and eliminate these silent killers in your own open innovation journey? At Co:cubed, we help the world’s biggest companies solve the world’s biggest problems through our network of 12m+ startups. Get in touch with us to learn more at joel.wallington@cocubed.com.
