6 Innovation Best Practices Every Business Leader Should Know
Despite innovation being the primary goal for most companies, it remains rare to get it right.
Today's buyers are seeking speed, adaptability, and bold thinking; however, 90% of corporate innovation initiatives fail to deliver results. Not because the ideas are bad, but because the execution is incomplete.
The truth is, innovation needs to be operational, even before it's creative. You read that right! Innovation without clear decision-making, measurable goals, and discipline will quickly kill your ideas.
In this guide, we'll cut to the chase and tell you what actually works: innovation best practices used by consistently successful teams.
Identify the Right Problems First
Most innovation efforts fail before they even begin, most often because the problems being solved weren't worth solving. In fact, around 37% of projects fail due to unclear project goals and poor problem scoping. Problems that actually drive business results are urgent, costly, and deeply felt by users.
The solution is simple. Your best ideas are already hiding in plain sight, in customer support logs, sales objections, onboarding friction, or feature requests that keep resurfacing. So instead of asking "What should we build?" ask:
What's frustrating our best customers?
What's slowing down our internal teams?
Where are we losing time, money, or trust?
You'll find the answers in customer interviews, support feedback loops, and issue tagging in CRMs. You can also run short "problem framing" workshops to identify who's experiencing this problem and how frequently. More importantly, you'll learn what it'll cost you to do nothing.
Define Clear Innovation Goals With Business Value
Too often, teams chase vague goals like "be more creative" or "think outside the box." That sounds good in a slide deck, but it means nothing when you're trying to justify budget, prioritize resources, or track impact. If your innovation effort doesn't impact a business metric, it's no use.
Make sure every innovation initiative ties directly to a measurable goal, such as:
Increasing revenue (e.g., new pricing model or monetization stream)
Reducing churn or improving retention
Lowering operational costs or cycle times
Driving customer acquisition or satisfaction
Increasing feature adoption or usage rate
For instance, Netflix's investment in predictive content delivery was directly tied to reducing streaming lag and improving user retention. The reduction in churn and improved engagement from predictive delivery and personalized experiences saves Netflix over $1 billion annually!
Build an Internal Innovation Funnel
Great ideas are useless without a process to evaluate, test, and scale them. That's why innovation needs to be structured and organized. A clear internal funnel will make sure ideas don't get lost in inboxes or die in endless meetings.
Start with open submissions. Anyone should be able to propose an idea, but that doesn't mean compromising on discipline. Every idea should go through a standardized evaluation process:
Feasibility (Can we build it?)
Business impact (Will it move a key metric?)
Strategic alignment (Does it support long-term goals?)
In fact, 59% of companies describe their innovation efforts as "ad hoc" or "emerging." Only 13% report that their innovation programs are strategic or fully integrated. This means a majority of organizations lack a formal, structured innovation pipeline.
Once shortlisted, these ideas can move into lightweight testing. Don't spend six months on it — just stick to quick prototypes, pilots, or sandbox tests that validate assumptions before committing serious resources. Based on test results, teams can make a hard decision: scale it or kill it.
Use a simple, shared tool like Trello, Airtable, or Notion to manage this funnel and maintain visibility. If people can't see what's happening, the pipeline breaks down. A central board allows leaders to track progress and teams to avoid duplicate efforts.
Most importantly, cap the number of active projects. If everything is a priority, nothing is a priority! Not only will this improve the quality of projects, but it also forces better decision-making.
Budget for Innovation Separately
If your innovation initiatives have to fight for scraps from your regular operations budget, they will always lose. That means you can't treat it like an afterthought. You need to protect innovation with dedicated time and money.
Start by ringfencing an innovation budget every quarter, even if it's modest. That includes financial resources (for tools, experiments, pilot launches) and time (for teams to step out of their daily schedule).
A useful rule of thumb: Give teams 10–20% of their time specifically for testing new ideas, building prototypes, or participating in innovation sprints.
Appoint Owners, Not Committees
Innovation can't be everybody's responsibility. If you're serious about progress, every idea must have a single, accountable owner from day one. That person's job is to define success metrics, set a timeline, and steer the project through key review checkpoints.
The most effective organizations don't build innovation committees. Instead, they build small agile-style innovation teams with the authority to move fast and the clarity to know what "done" looks like. These teams are temporary, purpose-built, and accountable to outcomes.
According to the University of Missouri-St. Louis, about one-third of all failed projects cite lack of senior management involvement as a principal cause of failure. Meanwhile, when ownership is clear, decision-making is much faster, blockers get resolved quickly, and performance can actually be measured.
Review, Report, Repeat
Innovation only gets better if you track what's actually working and what isn't. Most teams move from one project to the next without ever pausing to ask what they learned. That's how mistakes get repeated and weak ideas get recycled.
At a minimum, run a monthly innovation review session. Keep it short — 15 minutes per project is enough. Teams should share what they tested, what the data showed, and whether the idea is being scaled, refined, or killed.
To avoid reinventing the wheel, create a shared tracker or internal wiki for all innovation experiments. Log every outcome, especially the failed ones. Over time, this will be full of insights that help build a smarter, faster-moving org.
Amazon's 6-page narrative format is a great example, since it forces every team to justify an idea clearly. Whether you use a doc, deck, or template, the point is the same: review and report.
Conclusion
If your innovation initiatives fail even with great ideas, it's because there's no system to catch, test, and scale them. In most cases, you don't need more brainstorming sessions. You need structure, accountability, and a bias for action.
If you're serious about building that kind of culture, start small but be consistent. Use our guide to incorporate these innovation best practices in your daily workflow and enjoy the outcomes. If you're looking to get your team more aligned around innovation, book Sheri for a workshop or keynote.
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