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Every quarter, innovation teams gather in conference rooms with whiteboards and sticky notes. They brainstorm. They vote. They rank ideas on matrices measuring feasibility against impact. Then something curious happens. The boldest ideas die quiet deaths while cautious increments march forward. By the time proposals reach senior leadership, the innovation pipeline looks less like a fountain of breakthroughs and more like a conveyor belt of marginal improvements.
This isn’t an accident. It’s a feature of how most organizations have designed their innovation processes. The very systems built to capture brilliant ideas have become sophisticated filters for mediocrity.
The Paradox of Professional Innovation
Companies invest millions in innovation programs. They hire chief innovation officers. They create venture arms and accelerators. They send employees to design thinking workshops. Yet despite this infrastructure, truly disruptive ideas rarely emerge from these formal channels. Instagram wasn’t born in Facebook’s innovation lab. The iPhone didn’t come from a committee vote at Apple. The most transformative products tend to emerge from obsessed individuals or small teams working around the system, not through it.
This creates an uncomfortable question. If formal innovation processes don’t produce breakthrough innovation, what are they actually selecting for?
The answer becomes clear when you examine the incentives. Innovation funnels aren’t designed to maximize innovation. They’re designed to minimize regret. Every stage gate, every review committee, every feasibility study serves one primary function: ensuring nobody gets blamed if something fails.
Consider what happens to an idea as it moves through a typical corporate innovation funnel. First, it must be articulated clearly enough for strangers to evaluate. This immediately penalizes ideas that are genuinely novel, because truly new concepts don’t fit into existing frameworks. They sound confused or half-formed because the language to describe them doesn’t quite exist yet.
Next, the idea faces a feasibility assessment. Can we build this with current technology? Do we have the capabilities? Can we launch in twelve months? These seem like reasonable questions. But they contain a hidden bias. Revolutionary ideas, almost by definition, require capabilities you don’t have yet. The computer mouse failed early feasibility studies at Xerox because it would cost three hundred dollars to manufacture. The team that persisted found a way to make it for fifteen dollars. But in most organizations, that idea would have died at the feasibility stage.
Then comes market validation. Can you prove customers want this? Show us the data. Never mind that customers are notoriously bad at articulating desires for things they’ve never imagined. Henry Ford’s apocryphal quote about faster horses captures a real phenomenon. People optimize within existing paradigms. They ask for better versions of what they know, not category-creating alternatives.
By the time an idea survives these filters, it has been sanded down into something familiar, buildable, and demonstrably safe. It has become mediocre.
The Economics of Safe Bets
Organizations gravitate toward safe mediocrity for rational reasons. The payoff structure for innovation is asymmetric in all the wrong ways. If you champion a bold idea that succeeds, you might get a bonus or promotion. But if you champion a bold idea that fails, you risk your reputation and potentially your job. If you back ten safe ideas that deliver modest improvements, you’ll probably be fine. You’re making progress. You’re being responsible.
This creates what economists call a principal-agent problem. The people evaluating ideas have different incentives than the organization itself. The organization can afford to fund ten risky projects if one succeeds spectacularly. Individual managers cannot afford to sponsor even one visible failure.
The medical field offers an illuminating parallel. Doctors face lawsuits for errors of commission but rarely for errors of omission. Prescribing a treatment that causes harm carries more professional risk than failing to try a treatment that might have helped. This drives defensive medicine, where doctors order unnecessary tests and procedures primarily to protect themselves from liability.
Innovation funnels produce defensive innovation through the same mechanism.
The result is a portfolio that looks active but plays it safe. Companies launch new features, new packaging, new marketing angles. They stay busy. But they’re running on a treadmill, expending energy without gaining ground against competitors willing to take genuine risks.
The Mirage of Data-Driven Decisions
Modern organizations worship data. Every innovation proposal must come armed with market research, customer surveys, and financial projections. This seems rigorous and scientific. In reality, it’s mostly theater.
The dirty secret of innovation is that the data doesn’t exist yet. You cannot A/B test your way to breakthrough innovation because you need something to test against. You cannot survey your way to discontinuous improvement because customers don’t know what they don’t know. You cannot build a business case with reliable numbers because you’re venturing into territory where historical patterns don’t apply.
Successful innovators understand this. They use data, but they don’t worship it. Jeff Bezos famously ignored data suggesting there was no market for Amazon Web Services. Steve Jobs didn’t conduct focus groups for the iPad. They made bets based on vision and conviction, then figured out the details.
But corporate innovation funnels demand data upfront, before resources get allocated. This creates perverse incentives. Teams learn to manufacture the data innovation committees want to see. Market sizing becomes creative fiction. Customer validation involves finding the handful of early adopters who validate your hypothesis while ignoring everyone else. Financial projections get reverse-engineered to hit required return thresholds.
Everyone knows the numbers are made up. But the numbers serve their true purpose, which isn’t accuracy. They provide cover. If the project fails, you followed the process. You had data. Nobody can blame you.
Diversity Theater
Innovation leaders often talk about needing diverse perspectives. They’re right, but not in the way they think. Most diversity initiatives focus on demographic characteristics. They ensure the innovation team includes people of different ages, genders, and backgrounds. This helps, but it’s not sufficient.
The diversity that matters most for innovation is cognitive diversity. You need people who think differently at a fundamental level. The engineer who sees every problem through an optimization lens. The designer who obsesses over emotional resonance. The philosopher who questions foundational assumptions. The hustler who just wants to ship something and see what happens.
But corporate innovation processes have a homogenizing effect. Everyone in the room has survived similar filters to get there. They’ve been selected for fitting into the organization. They’ve learned which ideas get rewarded and which get dismissed. They’ve internalized the same risk calculations and career incentives.
This creates what psychologists call groupthink, but in slow motion. Nobody is actively suppressing dissent. The group doesn’t need to. The selection process has already filtered out the people who would propose truly contrarian ideas. Everyone who remains is playing the same game by the same rules.
The Tyranny of Consensus
Most innovation funnels require some form of committee approval. This seems democratic and fair. It prevents individual bias and ensures multiple perspectives weigh in. But it virtually guarantees mediocrity.
Consensus emerges around the lowest common denominator. For everyone in a room to agree, an idea must threaten nobody’s territory, contradict nobody’s assumptions, and fall within everyone’s comfort zone. Breakthrough innovations fail this test. They’re polarizing. They make some people uncomfortable. They require trade-offs that benefit some constituencies while disadvantaging others.
Consider the history of disruptive products. Many faced fierce internal resistance. The first iPhone cannibalized iPod sales and threatened carrier relationships. Amazon’s marketplace threatened their retail business. Netflix’s streaming service undermined their DVD rental cash cow. These initiatives succeeded because a powerful individual or small group pushed them through over objections, not because they achieved consensus.
Committees serve a valuable function in organizations. They’re excellent at error-checking and risk management. But these strengths become weaknesses in innovation contexts. The committee’s job becomes finding reasons to say no. And there are always reasons. The market is uncertain. The technology is unproven. The business model is unclear. A good committee can kill any genuinely innovative idea through reasonable-sounding objections.
What Actually Works
If formal innovation funnels produce mediocrity, how do breakthroughs actually happen? They follow a different pattern. Someone becomes obsessed with a problem or possibility. They gather a small team of true believers. They operate with unusual autonomy, either because they’ve secured executive sponsorship or because they’re flying under the radar. They move fast, iterate based on real feedback, and adapt as they learn.
Amazon’s two-pizza team concept captures this insight. If you can’t feed the team with two pizzas, it’s too big. Small teams with clear autonomy can move faster and take bigger risks than large groups requiring coordination and consensus.
This suggests a different approach to innovation. Instead of funneling all ideas through a single process, create parallel paths. Keep the formal innovation funnel for incremental improvements. It’s good at that. But create alternative mechanisms for breakthrough innovation.
Give small teams real autonomy and resources without requiring them to justify every decision to committees. Accept that most will fail. Plan for it. The goal isn’t to maximize success rate. It’s to create the conditions where breakthroughs become possible.
Some organizations are experimenting with this. Google’s twenty percent time, before it was quietly killed, produced Gmail and Google News. These programs work not because of the time allocation but because they temporarily suspend normal accountability structures. Employees can pursue ideas without needing approval or building business cases.
The venture capital model offers another useful template. VCs know most investments will fail. They don’t try to prevent failure. They build portfolios expecting the distribution to be extreme, where one or two successes generate enough return to cover all the losses. Corporate innovation typically does the opposite, managing risk to ensure nothing fails too badly, which also ensures nothing succeeds spectacularly.
The Cultural Shift Required
Fixing clogged innovation funnels isn’t primarily a process problem. It’s a cultural problem. Organizations need to genuinely tolerate failure, not just claim they do in mission statements. Leaders need to reward bold bets that fail more than safe bets that succeed modestly.
This runs against every instinct in professional culture. We celebrate winners and quietly forget losers. We promote people who deliver results, not people who tried something ambitious that didn’t work out. We create incentives that encourage caution, then wonder why nobody takes risks.
Sports provide a useful contrast. Basketball players who never miss shots aren’t praised for accuracy. They’re criticized for not shooting enough. Great shooters miss frequently because they’re taking difficult shots. Teams understand this. They don’t bench players for missing. They bench players for playing scared.
Organizations need similar frameworks for innovation. Judge people on the quality of their bets, not the outcomes. Did they identify a genuine insight? Did they test it rigorously? Did they learn from failure? These are controllable factors. Whether the market embraces the idea involves luck and timing.
Starting the Unclogging
If you recognize your organization’s innovation funnel is producing safe mediocrity, what can you do? Start small. Don’t try to overhaul the entire system. That triggers immune responses and gets blocked by the same forces that created the problem.
Instead, create small experiments that operate outside normal processes. Fund a few tiny projects with no oversight requirements. Let teams work in secret until they have something to show. Create explicit permission for failure by celebrating intelligent experiments that don’t work out.
Track what happens. Not just whether projects succeed but what kinds of ideas make it through. Are you seeing genuine variety or the same concept in different packaging? Are teams proposing things that make you uncomfortable or only things that feel safe?
The goal isn’t to eliminate structure or stop being thoughtful about resource allocation. It’s to create spaces where different rules apply. Where the bias toward safety gets temporarily suspended. Where genuinely novel ideas can develop without being prematurely optimized into familiarity.
Your innovation funnel will always carry some safe ideas forward. That’s fine. The problem isn’t that safe ideas exist. The problem is when they’re the only ideas that survive. Fix that, and you won’t just unclog the funnel. You’ll fundamentally change what flows through it.
