Nurturing Innovation From Within

Innovation has become something of a paradox in many large orgs today. On the surface, companies claim to value creativity and new ideas, yet in practice, they often stifle internal innovation in favour of acquiring startups. This approach, while tempting, is a short-term fix that undermines long-term growth. Let me explain why and advance my theory on how orgs can break the cycle to foster meaningful, sustainable innovation from within.

I was recently reminded of this paradox during a conversation with a former colleague. We reminisced about our time together many years ago at a company that prided itself on its innovative culture. Employees were often encouraged to speak up, share ideas, and challenge the status quo. It was baked into the company’s DNA. Yet, under new leadership, something shifted. Despite the rhetoric, my colleague felt his team’s ideas were no longer valued. Instead, the company turned to what one might call “innovation by acquisition”, i.e. buying smaller, nimbler startups. 

Now this approach is of course understandable: startups move fast, take risks, and aren’t bogged down by legacy systems or entrenched thinking. They represent a convenient innovation shortcut. But as someone who has spent a few years helping businesses navigate this landscape, I’ve observed that acquisition-driven innovation often fails to deliver lasting transformation, which prompted me to write this blog today.

The Hidden Cost of Outsourcing Innovation 

When orgs repeatedly look outward for innovation, they inadvertently send a message to their own talent: your ideas aren’t valued here. This creates a self-fulfilling prophecy where internal creativity withers as the expense of acquiring external innovation grows. 

Over time, this erodes morale and stifles creativity, creating a self-fulfilling prophecy. Internal innovation withers, and the orgs becomes increasingly dependent on external acquisition which can easily become a costly and unsustainable cycle.

The truth is, innovation isn’t just about technology; it’s mostly about people. The systems we build reflect the cultures that produce them. To break this cycle, orgs  would need to rethink their approach to innovation and create environments where creativity can thrive from within.

How Large Orgs Could Break This Cycle and Foster Meaningful Innovation From Within?

1. Position Innovation as a Human Challenge: We need to recognise firstly that innovation isn’t merely a technological challenge but a human one. The algorithms, the systems we build today greatly reflect the cultures that produce them. Organisations that consistently generate breakthrough ideas have cultures that embrace uncertainty, tolerate failure, and value diverse perspectives. They recognise that innovation thrives at the intersection of different disciplines, backgrounds, and worldviews. This requires a shift in mindset.
2. Protect Innovation From The Corporate Immune System: New ideas are fragile. They often emerge imperfect and unpolished, making them easy targets for dismissal in organisations optimised for efficiency.  Consequently, org leadership must protect innovation from the corporate immune system that’s designed to attack anything remotely resembling ‘inefficiency’ or ‘failure’. Traditional metrics and processes designed for efficiency will by design strangle any innovation in this environment before it has a chance to mature. Creating protected spaces where ideas can develop without premature judgment would be more preferable in this case. 
3. Redefine Expertise: In rapidly evolving fields, experience can sometimes become a liability when it hardens into rigid thinking and therefore we might need to reconsider how we define ‘expertise’. The most innovative companies I’ve worked with cultivate an openness to questioning assumptions and seeing problems with fresh eyes, regardless of seniority. Amazon calls this the ‘Day 1’ philosophy (more on that another time) 
4. Engender Inclusion From Ground Up: Now this topic is quite dear to me because often times when people talk about inclusion and diversity, the easy (and lazy) thing to do is to pander to visible markers like ethnicity or gender. Whilst those are important, true inclusion goes much deeper than that. It’s about embracing voices that challenge our assumptions and listening to perspectives that make us uncomfortable or ideas that we might not initially agree with. It means valuing the introvert who quietly questions the status quo as much as the extrovert who loudly champions it. Innovation thrives on cognitive diversity. The ability to see problems through entirely different lenses. Innovation is only as strong as the diversity of perspectives behind it. Technology inevitably embodies the perspectives and priorities of its creators. When innovation pipelines lack diversity, the result is usually products built that solve for some experiences while remaining blind to others. True innovation requires voices that challenge our default ways of thinking. To truly innovate, orgs must move beyond token diversity and cultivate a culture where every voice is not only heard but actively sought out, to ensure that the designs for the products and services from innovation reflect the diversity of the markets that those same orgs will be serving. This usually requires humility from leadership, a willingness to listen, and a commitment to creating the psychological safety in which their people can feel safe to express their unique perspectives without fear of judgment or retribution.

Enabling Sustainable Innovation

To be crystal clear, I’m not anti-acquisitions. I think they have their place. BUT, they can never replace the enduring capacity to reimagine the future from within. Building a culture of internal innovation will require sustained commitment and a willingness to invest in people, processes, and mindsets that prioritise long-term growth over short-term gains. In today’s world of rocket-speed accelerating change, one may argue that this may be the only sustainable competitive advantage. The future belongs to those who can innovate continuously and not just once.