Five Obstacles That Impede Startup Innovation


If you’re building a startup, chances are that you’re aspiring to innovate – to create something new or do something differently. In fact, innovation and entrepreneurship go hand in hand. However, many startups unwittingly create obstacles that hamper innovation in their organization. What are some of those obstacles and how can you avoid them?

Fear of Risk-Taking

When Elon Musk put his last $35 million into the financially strained Tesla, did he know that the company would soon be worth $25 billion? Or when Steve Jobs attempted to enter the tablet market – something that many companies before him had tried, but failed – did he know that Apple would soon become the top tablet vendor in the world?

Perhaps not, but the point is that both entrepreneurs took big risks. And that’s what matters. Many startups, afraid of risks, lose out on critical opportunities for innovation and growth. A fear of failure can often be innovation’s greatest enemy, especially in today’s fast-changing world.

So, instead of avoiding risk, foster a culture of calculated risk taking. Encourage your workforce to think through each risk scenario carefully, gather as much data as possible, evaluate the odds of success – and failure — and then determine if a risk is worth taking.

Another best practice is to share successes and failures as learning opportunities across the organization. This is a great way for people to become more aware of how to successfully mitigate risks, and manage uncertainty. It also raises awareness that failures are accepted and part of the journey to success.

Finally, support your workforce as they experiment, and learn – sometimes by trial and error – and perfect the art of smart risk taking. When people are not afraid to fail, that’s when innovation will flourish.

Poor Governance

Innovation doesn’t occur in a vacuum. If innovation isn’t aligned and embedded within your business objectives and budgets, and if there isn’t clear accountability for innovation-related decisions, then things can get chaotic. That’s why governance is critical for innovation to succeed. Governance involves implementing appropriate guardrails that allow innovation to flourish without going overboard.  It’s about having a framework with clear roles and responsibilities, while also encouraging autonomy.

So, what can you do to effectively govern innovation? Emeritus Professor Jean-Philippe Deschamps wrote an insightful piece, “What is Innovation Governance?” in which he lists out six fundamental questions that companies should address:

1. Why do you want to innovate?

2. Where should you focus your innovation?

3. How much innovation should you target?

4. How can you innovate more effectively?

5. With whom should you innovate?

6. Who should be responsible for what in innovation?

Thinking through these questions carefully can help you define a clear framework to guide innovation, and ensure that it actually contributes to the bottom line.

Weak Organizational Culture

Many startups think that initially, at least, culture doesn’t matter. But that’s not true. Whether you’re aware of it or not, your organization has a culture right from Day 1. The question is – how conducive is it to innovation? Are people inspired to be creative and productive? Are they willing to try new approaches and ideas? Or are they afraid to take new risks?

Cultivating a culture that encourages innovation is no easy feat. It takes time and effort, and must begin at the top. When your leaders actively embody values such as risk-taking, trust, respect, transparency, and teamwork, the rest of the organization will follow suit.

At MetricStream, innovation is one of our core cultural tenets, and it’s actively supported and carried out across our other cultural tenets including Customer Focus (everything we do needs to create value for our customers), Team Work (if we work together as a team, we can achieve big results), and Never Say Die (tenacity and perseverance make all the difference in the world). These values guide the work we do everyday, they unite as one team, and support us as we continue to adapt, evolve, improve, and grow.

Rigid Operating Structure

Innovation is often hampered in organizations with complex or hierarchical models that promote micromanagement and a “command and control” style of leadership. Fortunately, most startups are flat and agile. But the trick is to maintain the same structure, especially as the business scales.

One of the best ways to do that is to keep communication lines open. Listen to people. When someone suggests a new idea, discuss how it could work. Try to say “yes” more often. Provide ample opportunities for feedback and improvement – both top-down and bottom-up.

Early on in MetricStream’s history, one of our teams had the idea of creating an on-demand learning portal to meet the growing need for GRC (Governance, Risk Management, and Compliance) training, content, and thought leadership. This innovation is, which today is a leading provider of GRC training and advisory services. The portal connects over 700 GRC consultants with 3 million plus users worldwide, while hosting over 700 seminars every year, and housing a library of 1,700 on-demand GRC training programs.

None of this would have been possible if we, as an organization, hadn’t listened and encouraged people to share, and act on their ideas.

Lack of Good Leadership

You can spot good leaders just by watching how they interact with others. They inspire people to do better and be better. They rally the workforce around a shared vision. In a chaotic startup environment where you’re working against the odds every single day to succeed, a good leader can make all the difference.

Many of the most successful tech startups today are synonymous with their leaders – be it Ben Silbermann (Pinterest), Drew Houston (Dropbox), Jack Dorsey (Twitter), or Evan Spiegel (Snapchat). It’s no surprise that these individuals also received approval ratings of more than 90 percent from employees, in a 2014 report compiled by Business Insider, based on CEO ratings from Glassdoor.

There are many traits that make up a good startup leader. But in my experience, I’ve found that truly transformational leaders are those who motivate people, earn their trust, and raise the company’s morale not only with what they say, but also what they do. They set clear goals, envision the road ahead, and steer the team forward. They are also passionate about their work, and courageous in taking new risks.


The concept of innovation is often illustrated as a light bulb that suddenly switches on when an idea strikes. But in reality, innovation doesn’t just happen in a moment. It requires continuous and deliberate focus. The key to success lies in taking smart risks, fostering a culture that encourages creativity, and removing obstacles such as complex internal reporting structures and bureaucracy. Also, implement systems and processes that help govern innovation. And most importantly, make sure that you have strong leaders across the organization who help inspire innovation and drive success across the organization.

Shellye Archambeau is CEO of MetricStream, a Palo Alto, CA-based company offering governance, risk, compliance, and quality management solutions to enterprises in the pharmaceutical, medical device, high tech manufacturing, energy, financial services, healthcare, manufacturing, food and beverage, and automotive industries. Follow @metricstream

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