Most large enterprises today are running more innovation activity than ever before — more ideas, more pilots, more initiatives, and bigger budgets to fund them. Yet confidence in innovation outcomes is falling. According to McKinsey, 84% of executives believe innovation is critical to their success, but only 6% are satisfied with their innovation performance.That's not a creativity problem. That is a system failure.
The gap is not between ambition and imagination. It is between the moment an idea enters an organization and the moment it becomes something real — if that moment ever arrives. Innovation doesn't break at the point of creation. It breaks inside the systems meant to evaluate, prioritize, and scale it.
84% of executives believe innovation is critical to their success. Only 6% are satisfied with their innovation performance. That's not a creativity problem. That is a system failure.
Why More Ideas Isn't the Problem
It might seem counterintuitive, but most large organizations don't suffer from a lack of innovation ideas; they suffer from an excess of them. Across functions and regions, initiatives pile up: pilots, proofs of concept, transformation projects, campaigns, platforms, and experiments, each competing for attention, funding, and executive sponsorship.
The result is not a shortage of creativity, but a growing inability to distinguish what truly matters from what merely exists. Innovation portfolios expand faster than leadership's ability to make clear, confident decisions. In complex enterprises, innovation rarely fails because nothing is being proposed. It fails because too many things are, and the system has no reliable way to decide what deserves to move forward.
Where Innovation Actually Breaks Down
When innovation stalls, the instinct is often to look upstream, toward ideation, creativity, or talent. In reality, most innovation fails downstream, in the less visible parts of the organization. Evaluation frameworks vary by function. Prioritization criteria shift depending on who is in the room. Governance processes optimize for consensus rather than clarity. Decisions take months, sometimes quarters, and by the time they arrive, the context has already changed.
Innovation doesn't die because ideas are weak. It dies because the system surrounding those ideas was never designed for uncertainty at scale. What works for predictable, operational work rarely works for exploratory initiatives, yet many organizations try to govern both in the same way.
The Hidden Cost of Broken Innovation Systems
The cost of this dysfunction is rarely visible on a balance sheet, but it is measurable, and the numbers are striking. We spoke with one large enterprise managing 500 innovation initiatives annually. The evaluation process alone consumed over 23,500 hours of human effort — the equivalent of eleven full-time employees whose entire working year is spent reviewing ideas, most of which will never move forward. The fully-loaded cost: approximately $4.2 million, just in evaluation overhead.
That is before accounting for the zombie project problem. According to Forrester, 20% of the average enterprise innovation portfolio consists of initiatives that should have been terminated but weren't, kept alive by organizational inertia, unclear kill criteria, or the absence of anyone with clear authority to stop them. These zombie projects don't just waste resources. They crowd out the initiatives that deserve investment, starving promising work of the funding and attention it needs to scale.
20% of the average enterprise innovation portfolio consists of zombie projects. Freeing those resources can fund two years of more strategic innovation activities.
The result is a quiet but persistent innovation tax, paid in time, attention, and opportunity, that compounds as organizations scale. Over time, this tax erodes leadership confidence in innovation portfolios, makes investment decisions harder rather than easier, and quietly drains the organization's ability to act when genuinely strategic opportunities emerge.
