Why Innovation Teams Fail (And How to Design One That Won't)

Most innovation teams are set up to fail before they even begin. Here's how to break the pattern.

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The Pattern is Painfully Familiar

A leadership team decides the organisation needs to "be more innovative." They assemble a team of smart, enthusiastic people. Give them a mission to "drive innovation." Maybe even a budget and some fancy job titles.

Twelve months later, the team has produced some interesting ideas, a few pilots, perhaps a glossy presentation. But nothing has fundamentally changed. The core business carries on as usual. Eventually, the innovation team quietly dissolves, absorbed back into regular operations or disbanded during the next restructure.

Sound familiar?

I've seen this pattern repeat itself across industries and organisation types. The frustrating part? These failures aren't due to lack of talent, effort, or good intentions. They're failures of understanding and design.

Before you create an innovation team, you need to understand why they fail—and what actually makes them succeed.

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The Restaurant That Never Opens

Imagine you're opening a restaurant. You've hired talented people and given them a deadline. But here's the problem: no one agreed on what type of restaurant you're opening. One person is planning a five-star fine dining experience. Another is building a fast-casual burger joint. A third is training staff for a family-style Italian trattoria.

Opening day arrives. The space is confused. The systems don't work together. Customers don't know what they're getting. The restaurant fails—not because any individual did poor work, but because no one agreed on what job the restaurant was supposed to do.

This is what happens with innovation teams.

Organisations hire smart people and tell them to "innovate" without clarity about what problem they're solving or what success looks like. The team creates solutions for questions no one asked. They build capabilities the organisation isn't ready for. They operate on a different timescale than the business requires.

The team fails—not because they weren't innovative enough, but because they were never set up to succeed.

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The Three Core Reasons Innovation Teams Fail

Through working with many organisations building innovation capabilities, I've identified three foundational failures that predict whether a team will succeed or flounder:

1. Unclear Mandate and No Accountability

The problem: Leadership says they want innovation but can't articulate what job the team is supposed to do. Is it new revenue streams? Operational efficiency? Culture change? Future-proofing against disruption? Without this clarity, the team has no direction and no way to demonstrate value.

What cascades from this:

Without a clear mandate, the organisation can't identify what skills are actually needed. They might hire brilliant strategists when they need executors, or bring in technical experts when they need people who understand people and culture. The skills don't match the mission because the mission was never clearly defined.

Without accountability, the team can't articulate how to measure success beyond vague notions of "being more innovative." They can't prove value, can't learn from failures, and can't demonstrate progress. Eventually, many resort to innovation theatre—focusing on looking innovative rather than being innovative. Beanbag chairs, whiteboards covered in post-it notes, innovation labs with trendy names—all the trappings of innovation culture without the substance.

The team chases every shiny opportunity, spreading themselves thin and failing to deliver meaningful impact on any single dimension.

What it looks like:

The team produces lots of activity—hackathons, design sprints, pilot projects—but struggles to show clear business value. When asked about results, they point to outputs (ideas generated, workshops run) rather than outcomes (problems solved, value created).

Again, when asked "how's it going?", they describe activity rather than impact. They showcase their cool workspace and talk about "building an innovation culture" but can't point to concrete business results.

The team is full of talented people who aren't equipped for the actual work required—like hiring a Michelin-star chef when you need someone to streamline your drive-through operation.

2. Resource Starvation and No Political Protection

The problem: The organisation creates an innovation team but doesn't commit real resources—budget, talent, time, or leadership attention. Worse, the team has no powerful sponsor to remove obstacles, secure resources, or protect them from organisational politics.

What cascades from this:

The team is expected to "prove themselves" before getting proper support, but they can't prove anything without resources to experiment. It's an impossible catch-22.

When tough decisions arise—budget cuts, competing priorities, resistance from other departments—there's no one fighting their corner. They get stuck in bureaucracy with no one to help them navigate it. Their ideas die in committee or get watered down through endless compromise.

Without executive protection, the team becomes vulnerable to every organisational headwind. Other departments see them as fair game for criticism. The team spends more energy defending their existence than actually innovating.

What it looks like:

"We love innovation, but we can't allocate any budget until you show results."

"That sounds interesting, but let's run it through the governance process first." (Six months later, the opportunity has passed.)

"The innovation team? Oh, they're doing... something. I'm not really sure what."

The team struggles to get time with decision-makers. They can't run meaningful experiments. They can't hire the expertise they need. Eventually, leadership loses patience because there's no champion keeping the team's work visible and valued, and no resources to create real impact.

3. Innovation Island Syndrome

The problem: The team operates in complete isolation from the core business and disconnected from real customer needs. They're given a separate space, separate processes, and told to "think differently." They build solutions without testing with real customers or understanding operational constraints. While I’m a proponent of innovation teams being protected from the core business, it can’t operate sustainably or successfully without strong links to core business assets and customer needs. 

What cascades from this:

When they eventually need to integrate their innovations back into the organisation, there's no bridge. The innovations don't work with existing systems. They ignore the operational realities that make implementation difficult or impossible.

They build solutions for problems the business doesn't actually have, or solutions that customers don't actually want. The core business sees them as outsiders who "don't understand how things really work."

Without connection to the core business, the team lacks the practical knowledge needed to design implementable solutions. Without connection to customers, they lack the insight needed to solve real problems.

What it looks like:

The innovation team celebrates a breakthrough while the rest of the organisation rolls their eyes and continues business as usual.

The team unveils a solution to great internal fanfare, only to discover customers don't want it, or the business can't integrate it because it doesn't work with existing infrastructure, regulations, or operations.

"This is brilliant, but we can't actually deploy it because it doesn't integrate with our systems/violates our compliance requirements/requires capabilities we don't have."

I once inherited an innovation lab that had been operating for two years with virtually no connection to business units. They'd produced fascinating prototypes that solved problems the business didn't have and that couldn't be deployed within our technical architecture. When I arrived, few projects had a business sponsor. The team was talented, but they were completely isolated and people in the core business were frustrated the team wasn't solving problems that mattered. 

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What Actually Makes Innovation Teams Succeed

The good news? These failure patterns are avoidable. Teams that succeed have three foundational elements in place:

1. A Clear Charter with the Right Skills and Accountability

Successful teams can articulate exactly what job they're hired to do—with defined scope, boundaries, and success metrics. Not "drive innovation" but "identify new revenue streams in adjacent markets measured by X" or "reduce customer onboarding time by 30% through process innovation."

With this clarity comes the ability to:

• Assemble the right mix of skills for the specific job

• Define clear metrics for both learning (experiments run, assumptions tested) and business impact (revenue, cost savings, customer satisfaction)

• Say no to opportunities outside their mandate

• Demonstrate progress even when individual experiments fail

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This clarity comes from understanding the organisational context—not just what you want to achieve, but why it matters now and what success looks like.

2. Executive Sponsorship with Adequate Resources

Not just a senior leader's name on the charter, but someone who actively removes obstacles, secures resources, and protects the team from organisational antibodies. Someone with real power who uses it on the team's behalf.

This sponsor ensures the team has:

• Sufficient budget to run meaningful experiments

• Time and attention from decision-makers

• Protection from political headwinds

• Visibility with key stakeholders

• Authority to make decisions within defined boundaries

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When I set up an incubator to work on national security challenges, we had a C-level sponsor who attended our weekly check-ins, cleared roadblocks with other departments, and secured resources. That sponsorship was critical to the progress we made.

3. Bridge-Building to the Core Business

Successful teams actively build relationships with the core business and maintain relentless focus on real customer needs. They understand operational constraints, speak the language of different departments, and involve key stakeholders early. They test with real users and can demonstrate how innovations integrate with existing systems. They know what assets (e.g. technology, data, customers, skills) the core business has that can help them scale their innovation. 

This means:

• Regular engagement with business unit leaders

• Early involvement of implementation teams

• Continuous customer testing and feedback

• Understanding of technical and operational constraints and assets

• Translation between "innovation speak" and "business speak"

  
  

They're not trying to disrupt from the outside—they're enabling change from within.

Additional Success Factors:

Appropriate Autonomy with Clear Guardrails: Enough freedom to experiment and take risks, but not so much isolation that they can't integrate back into the business. They know what they can and can't do, but have freedom to move quickly within those boundaries.

Diverse Skill Sets with Psychological Safety: A mix of capabilities—some people who can envision the future, others who can build it, and still others who can connect it back to the organisation. But diversity means nothing without psychological safety where team members feel safe proposing bold ideas, challenging assumptions, and admitting when something isn't working.

Portfolio Approach: They maintain multiple bets with different risk/reward profiles rather than putting everything on one big idea. Some experiments fail, but the portfolio generates overall value.

Regular Communication: They proactively provide consistent updates to stakeholders about progress and insights. They tell compelling stories about what they're learning and how it connects to business priorities.

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Three Questions Before You Build Your Team

Before assembling an innovation team, honestly answer these questions:

1. What's the specific job we're hiring this team to do?

If you’re in innovation, you’ll know about Jobs to be Done Theory. It’s time to turn that theory on ourselves. Organisations don't hire innovation teams just to complete functional tasks. Like any hiring decision, there are deeper motivations at play—some functional, some emotional, and some social.

Functional jobs typically fall into two categories:

Solving a problem: You need better, more creative ways to address persistent challenges. Perhaps your processes are inefficient, you’re being out-competed on your core product, or you're struggling to meet changing customer needs.

Seizing an opportunity: You see potential for growth or impact but lack the capability to pursue it. Perhaps there's an adjacent market you could enter, emerging technology you could leverage, or unmet customer needs you could address.

But the functional job is only part of the story.

Emotional jobs are about how the organisation wants to feel:

• "Feel more confident in our decision-making in uncertain times"

• "Feel like we're staying ahead of disruption rather than reacting to it"

• "Feel less anxious about our competitive position"

• "Feel excited about our future rather than worried about it"

  
  

Social jobs are about how the organisation wants to be perceived:

• "Be seen as innovative leaders in our sector"

• "Demonstrate to our board/investors that we're taking future growth seriously"

• "Signal to the market that we're evolving beyond our traditional business"

• "Show government/regulators that we're proactively addressing emerging challenges"

Here's the big idea: if you're only clear on the functional job but unclear on the emotional and social drivers, you'll struggle to get sustained executive support and organisational buy-in. Understanding all three helps you design a team that delivers value on multiple dimensions.

Get specific. Get honest. Get clarity from your leadership team on what problem you're actually trying to solve or what opportunity you're trying to seize—and why it matters emotionally and socially, not just functionally.

If you can't articulate the functional, emotional, and social jobs with clarity, you're not ready to build the team yet.

2. Have we honestly assessed our organisational readiness?

Innovation teams need certain conditions to succeed:

• Leadership commitment beyond just saying innovation is important

• Executive sponsorship with real power and willingness to use it

• Adequate resources to actually run experiments

• Strategic clarity about what matters to the business

• Cultural tolerance for experimentation and intelligent failure

• Customer focus and willingness to test with real users

• Operational readiness to integrate successful innovations

This is about meeting the organisation where it is rather than where you want it to be. If these foundations aren't in place, even a brilliant team will struggle. You might need to start smaller—building capability gradually rather than launching a dedicated team immediately.  

3. What have we learned from past innovation attempts?

Most organisations have tried innovation before, even if they don't call it that. What happened? What worked? What failed? Why? And then, what’s changed? 

I call this "innovation archaeology"—digging into what's been tried before, understanding why it succeeded or failed, and identifying what's changed since then that might make the next attempt more successful.

The answers reveal critical insights:

• If past efforts failed due to lack of executive support, you need stronger sponsorship this time

• If they failed due to unclear mandate, get better clarity on the job to be done

• If they failed due to isolation from the business, you need someone in the team who credible with the core business

• If they succeeded initially but couldn't scale, you need to understand what blocked scaling

Don't repeat past mistakes. Build on past lessons.

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The Path Forward

Innovation teams don't usually fail because of the people in them. They fail because organisations skip the diagnostic work and jump straight to solutions.

Before you post that job description or assemble that team, do the harder work:

• Understand your organisational readiness - take our self-assessment

• Get crystal clear on what job you're actually hiring the team to do

• Learn from your past innovation attempts

• Honestly assess whether you have the conditions for success

The teams that succeed aren't necessarily the ones with the biggest budgets or the most talented people. They're the ones designed for their specific context, with clarity about their purpose and realistic support for their mission.

Want to work through this diagnosis systematically? Download the Innovation Context Canvas  - a FREE and practical tool for mapping your innovation context, learning from past efforts, and assessing organisational readiness. It's the same framework I use with organisations building innovation teams.