Structural and political barriers that kill good ideas inside large companies and how to overcome them
Is “corporate innovation” the oxymoron of our time? Innovation theatre is the great pretense of how many large enterprises approach the future. They look like they’re innovating. They sound like they’re innovating. But dig deeper and there’s a highway of roadblocks littered with whiteboards, flipcharts and Miro templates blowing in the proverbial wind.
There are no new revenue streams. No untested markets. No problems identified and solved. Instead, there’s a lingering cloud of frustration and a balance sheet bleeding from a thousand paper cuts.
Too often, corporate innovation is dead in the water before it’s even given a fighting chance at life. So why is it happening?
It’s a comfortable lie to blame the lack of corporate innovation on an idea vacuum. But I can say with academic certainty and a founder’s bluntness: the corporate innovation issue isn’t a creative one.
A recent study of chief innovation officers at multinational organisations revealed a consistent insight. Kaihan Krippendorff, George S. Day and Jayshree Set conducted in-depth interviews with 25 CIOs from organisations including Cisco, Coca-Cola, LEGO, Microsoft, Red Cross and the World Health Organization, as well as 35 leaders of corporate venture capital programmes.
In the group’s published findings (Harvard Business Review, September 2025), they found enterprise leaders uniformly agreed that when their employees had “the bandwidth to explore a challenge internally,” they were capable of creating a solution around 70% of the time:
The researchers calculated the theoretical loss of potential earnings when ideas aren’t actioned within an enterprise. They concluded that if every employee generates around 75 ideas during an average work year and just 30% are shared but only 10% are acted on, an enterprise loses a significant proportion of its innovative potential. Using these metrics, they found that in a $1 billion company with roughly 5,000 employees, when corporate innovation development is ineffective, it conceivably leaves “tens of millions of dollars on the table every year”.
In Aotearoa New Zealand, despite only a limited number of companies operating at this scale (although, plenty to make a significant difference), the concentration of innovation decision-making power in the hands of a few could be even more pronounced. Meaning, the absence of effective organisational “idea marketplaces” in Kiwi corporates - with the potential success of around 70%, as above - may have an outsized impact on our entire national innovation ecosystem.
Regardless of the capability (or lack thereof) to nurture creative intrapreneurial efforts in enterprises, research and development investment growth in innovation productivity has slowed globally. In Aotearoa, proportionate to our GDP, our R&D spend pace of growth has also stalled, now sitting at just 1.54% against the OECD average R&D investment of 2.6%.
But we can’t expect Wellington to fix corporate innovation. Science, Innovation and Technology Minister Dr Shane Reti was explicit earlier this year, saying that the current government had no target for R&D spend.
There’s also been a global trend for organisations to portion R&D budgets into digital technology, a chunk increasingly directed towards AI. Yet Deloitte’s 2025 tech value survey of nearly 550 leaders across five industries concluded that: “Many leaders face a choice: fuel AI at the expense of other tech foundations or expand digital budgets to support the full tech stack as it scales.”
But innovation is not always a budget challenge. In earlier research, authors of the 2018 PwC Global Innovation 1000 study found that the crucial factor in R&D distribution is how resources are used to drive corporate innovation, not how much:
So, if corporate innovation isn’t suffering because of a lack of ideas from within, nor having the infrastructure to surface them. And it’s not the slowed growth in R&D spend or investment redirection towards AI. Where’s the block?
It’s not a question of where. It’s a question of who. The problem of corporate innovation is the gatekeepers, the people hiding in plain sight paid to do their job.
In an enterprise, a bold idea is a threat. It challenges existing revenue streams. It unbalances established processes. It makes demands on already allocated resources - human and financial. It could even be seen to undermine the power and relevance of people who manage the core business, who manage the bottom line.
As with the comfortable lie of blaming a lack of ideas as the reason for failed innovation, blaming the gatekeepers is overly simplistic. Typically, innovation gatekeepers are not malicious actors. More often they’re rational people hired to perform a role: the mid-level manager who controls the budget, the head of legal who controls the risk appetite, the IT architect who controls the tech stack, the marketing lead who controls the brand guidelines.
They’re responding to the incentives and pressures of their operational environment, to professional drivers, motivations and market forces. And sometimes, the gambit is where the move of least harm is to say no.
In doing so, the gatekeeper is protected from signing off on an unknowable outcome. They don’t risk a failed innovation stain on their hands by committing to an ROI of a new venture or untested idea. And they fold to the corporate hierarchy and structure that doesn’t allow for a productive healthy fail culture, where risk is not just discouraged, but punished.
In my career, I’ve been hands-on growing successful ventures and had the opportunity to apply academic rigour to innovation processes within enterprises. This is where I uncovered the Gatekeeper’s Gambit. Here’s my observation on where good ideas go to die:
This is innovation paralysis; where innovation bleeds out slowly. The gatekeeper asks for more data, another business case, a revised forecast. They bring in more stakeholders for "alignment," each layering their own set of requirements. The team spends all its energy on internal justification rather than external validation. Momentum stalls. Enthusiasm wanes. The idea simply fades into the background, another victim of risk mitigation theatre directed by the gatekeeper. The gatekeeper never has to say no; the process does the killing for them.
The idea is approved, but it’s not resourced for success. A venture that needs a dedicated team of five is given one-and-a-half FTEs. A project that requires a $500k seed investment is given $50k and told to "prove it out." This is framed as fiscal prudence; as forcing the team to be "scrappy" like a startup, which is a fundamental misunderstanding of how startups work. Startups are scrappy by necessity, but they are also sovereign. They control their own destiny. A corporate venture starved of resources and forced to beg for scraps from the parent company has all the constraints of a big enterprise with none of the freedom of a startup. It’s the worst of both worlds. When the venture inevitably stumbles, the gatekeeper can shake their head and say, "Really, the idea was too improbable to work, but at least we gave it a shot."
The idea survives the key gatekeepers: it gets a budget, the right build team and starts to show some market success. On seeing the pilot’s success, the core corporate gatekeepers decide to “integrate” the venture into an existing business unit. The founder-minded leader is replaced by a “safe pair of hands” from the core business. The venture’s bespoke, agile processes are replaced with the parent company’s rigid stage-gate model. Its KPIs are changed from growth, learning and iterating, to short-term profitability. The proffered logic is to leverage company scale. But the reality is the corporate mothership simply absorbs and suffocates the venture. Innovation potential is neutered and the energetic culture fostered throughout the original build dies. The venture (which could have been the company’s north star for innovation) becomes just another side project loosely attached to the core business offering.
The corporate environment bears responsibility to let corporate innovation flourish, not be relegated to a headline in a PowerPoint presentation. The answer is not to change the culture, but to change the system, and the culture will follow.
A new system needs to be built in parallel to - but outside of - the core business. It needs to be designed from the ground up in a way that fiercely builds and protects a new culture of innovation that tests, nurtures and scales new ventures within its own perimeters. This is how it could look:
New ventures need to be housed in a structurally separate entity that gives them the autonomy to operate at speed and on its own terms. This acts as a firewall that protects the venture from core business operations and incentives, while having access to the parent company’s strategic assets, such as customers and data, or seconded team members to help with building the products and brand.
Ventures need to be funded like startups, with tranches of capital unlocked by hitting pre-agreed milestones. This instills discipline and focuses the build team on what matters most: incremental evidence and testing that shows they’re on the right track. Internal justification is replaced by external validation, from subjective debate to an objective review of progress.
Seasoned corporate managers can’t lead a new venture. For corporation innovation to meaningfully succeed, it needs founders. These are the people who seamlessly blend vision and resilience, and have a strong bias for action. They are a rare breed, and your system needs to be designed to attract, empower and incentivise this unique talent by providing the freedom to build as well as a material stake in the outcome.
The board of a new venture needs to be a small, dedicated group of both internal and external experienced venture builders and investors whose sole mandate is to remove blockers to ensure the venture succeeds. Their job isn't to manage risk for the parent business; it's to guide the venture to market success.
This is not theory. This is the model we have used at Gravity to build ventures for ourselves and for our corporate partners. It’s a model founded from the brutal honesty of the startup world, refined by academia, and proven with real world ventures.
It works because it acknowledges the hard truth: your existing system is designed to do exactly what it’s doing. Your established enterprise is a world-class execution engine that perfectly delivers its current business model.
Why would you ask it to also build the next big idea? It’s the wrong structure, wrong team, hierarchy, timelines and rewards.
Innovation requires courage. It requires taking a long term view, and the admission that the way you’ve been trying to innovate may have been stifling your organisation’s innovation potential. Your choice may be to innovate or become irrelevant.
It’s time for the gatekeepers to understand how innovation can future proof your operations. And for a new commitment to corporate innovation, one that’s not oxymoronic.