Business Innovation - what could be holding you back?


To become innovative and eventually a disruptive business, insight into what obstacles all of us face when taking the leap can be really helpful, especially when you have a team of people working for you. Over the years in working with many businesses from the Public Sector to Corporates and SME’s I’ve found that the same blockers to innovation appear in every business, and hope this article provides you with some insight and inspiration to get you going on your Innovation Journey.

Let's start from the beginning – What is Innovation?

Innovation is thinking outside the box. It’s providing value to customers and staff through automation, change, and new ways of working. It’s taking a step back from how things have always been done, and questioning whether that’s really the best way to do it.

Natural innovators have personality traits on their side. They are usually open to new experiences, and less agreeable. Less agreeable doesn’t mean they hate everyone, in psychological personality models such as the Five Factor Model (The Big Five Model of Personality) by Costa & McCrea - it simply means they are more resistant to peer pressure, and don’t tend to care as much about fitting in or conforming. They don’t necessarily go with the flow, and tend to think of authority as a big pain rather than absolute.

The Big Five personality model shows that we all have 5 main personality traits which vary from person to person in amount. A sliding scale if you will. The five personality traits include – Openness to Experience, Contentiousness, Extroversion, Agreeableness, and Neuroticism - or O.C.E.A.N. for short. Interestingly, people who don’t aspire to own their own business or go into management tend to be high on agreeableness and high on contentiousness which means they tend to agree with their boss and co-workers (at least in public) and aspire to do a good job and be seen as a hard worker. These people are great employees.

It is common for business owners to be high on openness to experience and a little lower on agreeableness. If you think about why most people start their own business, it's usually because they see an opportunity to do something differently or they dislike the way their current boss does something. The mere action of starting a business shows the person is open to new experiences, and isn’t happy conforming to their current bosses ways of working.

What drives Innovation?

Personality traits aren’t necessarily enough to drive people to innovate. There are usually additional social, environmental, political or economic influences which add fuel to the innovation fire.

1. Government Inaction & Government Dissolution

This is the big one! In a democracy, you can guarantee that half of the population is pissed off with the Government at any one time! Policies that grasp most of the population and sway elections tend to be fear based (we’ll talk about that a bit later) and so as a general rule, social and environmental issues tend to appear to the working voter (who’s worried about their job or income} to be less important. This creates an enormous amount of angry people who decide to innovate and try and solve government problems through private enterprise. There’s less red tape, they can move quicker and they don’t need to worry about the fear factor.

2. Inefficiency

An obvious one, but an important one. Innovation doesn’t need to be on a macro scale, it could be internal to a business, and nothing drives innovation than an inefficient process or system which costs the business money in wages or system repair. Some of the most popular cloud apps today started off as an internal solution within a company who then decided to sell it externally.

3. Click-through Generation

With the internet of things, consumers can get what they want instantly so it makes it harder to hold people’s attention. Having an innovative product or service model is a great way to stand out from the crowd and can establish a unique selling point. It also helps keeps customers engaged.

4. Customer Boredom

With access to so much information, and because customers are constantly targeted through marketing, customers feel like they know more and make judgements based on the latest fad or the latest media, regardless if it is true or not. They can get bored quickly – especially when they know next big thing is around the corner.

5. Global Market

Customers and clients can see everything everyone’s doing worldwide. The global market is a great driver of innovation for Australian businesses because we can see what other companies in Europe and the US are doing, and innovate based on their successes or failures. The market here moves about 12 months after the rest of the world, which means we have a head start. Those of you who attended Coffee & Connect in 2018 might remember when Vanessa told us of some global consumer trends coming our way. Most of them have well and truly hit the market this year already.

How can you Innovate in your Business?

Analyse or conduct the following and you’ll be on your innovation journey.

  • Vision – what is your vision for the future of your business?
  • Customer data – what does the data say? Are they buying more types of products or services than others?
  • Competitor analysis – what are your competitors doing and what is good and bad about their business models?
  • Processes & systems – are they up to date, integrated with each other and being used correctly by all of your staff? Are they efficient?
  • Data analysis – what does Google Analytics say about your customers? What does the latest research say on the latest trends? Use Google Scholar, Dunn & Bradstreet, Australian Bureau of Statistics, Deloitte, IBIS World, and industry bodies for a place to start.
  • Customer surveys – conduct them and find out what they like about your products, services or business model and also what they think could be improved
  • Ideas – play around with new ideas
  • Imagination – use it! Remember famous innovators who changed our world (Einstein, Newton, Stephen Hawking, Socrates) all came up with the basis of their ideas by daydreaming!
  • Brainstorm – with staff!
Get EVERYONE in the company involved
  • Present your Vision
  • Talk about what the industry trends are
  • Discuss competitors
  • Discuss trends
  • Present problem statement - what drives your customers or staff mad?
  • Break off into ideation teams
  • Get an external facilitator to help you think creatively
  • Contemplate and refine
  • Do a lot of thinking, drawing and research
Think outside the box – just because something has always been done a certain way, doesn’t mean it has to be done that way

Then play around with solutions e.g. “in a perfect world out customers could……..” or “in a perfect world our systems would……….” Think about how your customers could better engage with you or access your products and services. Even think about how you could make their contact with you more efficient – from ordering to paying.

No idea is a bad idea.


Sometimes innovation isn’t plain sailing. There are often blockers which can slow things down or stagnate the innovation process. I’ve listed some of the main problems you might face below.


“When all think alike, then no-one is thinking” – Walter Lippmann
Groupthink happens when people within an office or team are high on agreeableness, contentiousness, or they just don’t care anymore. Some are low on extroversion so they don’t like to speak out. To get to the stage of not caring, usually they have had experiences in the past where they’ve tried to speak out, and have been shut down. Neuroticism can also play a part in Groupthink – if people are fearful of losing their jobs, or fearful of the repercussions of speaking out, they keep quiet. Inside they’re thinking “that’s the worst idea I’ve ever heard” but outside they verbally agree with their team, manager or boss.

Another cause of Groupthink is when the team isn’t diverse enough. People tend to hire others who are similar to them in personality and life experiences. This is a one-way ticket to groupthink! Having a diverse team with different backgrounds, personality types, cultures and work experiences is vitally important for an innovative business. Otherwise you often get a group of people constantly validating each other’s terrible ideas. Sydney – although a multicultural city does have social rules around hiring – if you look at job ad’s on Seek, the majority of ads will have requirements that applicants must have Australian work experience. This is probably one of the major contributing factors to innovation stagnation in Australia, because locking out those who could have a completely different perspective on ways of working is not a good thing for any business.

The Bystander Effect

“Someone else will say something” or “If no-one else is doing anything, I don’t need to either”
The Bystander Effect is one of the most studied phenomena in Social Science. Usually a focus in Criminology, it has become more focal in Organisational Psychology in more recent times. So much so, most Science and Engineering Degrees now teach the importance of Whistle Blowing to counteract disasters in which the Bystander Effect may have contributed.

So what is the Bystander Effect? It is a phenomena where a person notices something, interprets the situation, evaluates the degree of responsibility felt, forms some form of resistance and then implements the action of choice.

In Criminology, The Bystander Effect usually means that most people who see a crime in progress, completely ignore it. There are thousands of situations where horrific crimes have been committed – stabbings, rapes and assaults where people have walked past without intervening. Its more common in larger cities where the population is larger and people are more fearful. In a crime situation, people might notice there is a fight, then evaluate that the fight is nothing to do with them, and there must be a reason the person is being beaten up, then resist stepping in by concluding they will probably get injured, and then decide to walk by. In the Bystander Effect, people tell themselves someone else will act such as call the Police, and in many cases the Police are not called until after the crime has been committed and the victim is in many cases clinging to life. You may have noticed signs all over Sydney after the Martin Place Terror incident saying “If you see something, say something”. Why? Because people do see things, but they usually don’t act.

In business, The Bystander Effect has been a contributor to many disasters. Most famously the Challenger Space Shuttle disaster. Every Science and Engineering Faculty in Universities the world over makes its students study this disaster. Reason being, several engineers knew the O-Rings on the shuttle could not withstand the conditions of the flight, and despite the engineers writing a comprehensive report about the risks, their manager didn’t understand the jargon and chose not to act as he didn’t want to delay the flight or disappoint the people above him. The entire team around the engineers knew there was an issue, and didn’t go above their boss to the decision makers because they presumed he’d done something about the problem. Instead they all stood by and watched it happen, the space shuttle blew up and everyone died. NASA has now implemented new processes so that this can never happen again.

Those of you watching the new HBO Series Chernobyl will see the Bystander Effect to an extreme level which resulted in a Nuclear Disaster.

In our own country the Bystander Effect could be attributed to the Murray Darling River disaster. The Government signed off on enormous amounts of water being drained from the Murray Darlin Basin to be diverted to other areas. Scientists warned them that it would only take a hot summer to dry up parts of it and cause mass extinction of the fish and animals that rely on the river. Many people saw the reports but no-one acted and they went ahead with the draining of the river. Groupthink is probably a contributor to this disaster too. Parts dried up during the drought in January causing blue-green algae to form and when temperatures dropped, the algae instantly died and killed over a million fish who were starved of oxygen almost immediately. 5 months on, still nothing has been done, and animals relying on the river and the food sources it normally provides are still dying in huge numbers, because no-one wants to admit fault.

The Bystander Effect can be attributed to plane disasters, and Corporate corruption the world over – there are too many to mention! In your business this means that if you have agreeable staff who aren’t willing to speak up when they see an issue or potential future issue, you could end up with a problem. In terms of innovation, people can think that coming up with a new idea isn’t their job. Or when a new idea has been formed and it’s being implemented, if a problem arises, people can ignore it presuming others have done something about it.

The Dunning Kruger Effect

The phenomenon where people over-estimate their cognitive ability.
“Where incompetent people are too incompetent to realise they are incompetent”
The perfect example of the Dunning Kruger Effect is Donald Trump. The unfortunate phenomena of the Dunning Kruger Effect is that incompetent people over estimate their cognitive abilities and exude confidence in what they don’t know. It’s the stereotypical used car salesman oozing charisma and having an opinion on things he’s not qualified to have an opinion on! It’s a large proportion of politicians, CEO’s, Media Personalities and Business Executives the world over. In the case of Trump, he has repeatedly contradicted himself, and told the media he doesn’t need to learn anything more because he already knows it all. He says he “has the best words” and rejects scientific opinion because he has a “higher intelligence”. To social scientists he’s the most fascinating man on the planet.

Those who suffer from the Dunning Kruger Effect lack what social scientists call metacognition, which is basically the ability to self-assess. Without metacognition, incompetent people believe they are doing fine, and surround themselves with people who are equally incompetent. This is how we have Flat Earthers, Anti-Vaxxers and Climate Change Deniers and Brexit. In business, this can lead to terrible ideas or even risky ideas being executed, which is why you should always employ a diverse team, some of which should be highly educated to counteract this. In the case of the Dunning-Kruger Effect, certain types of education are a good protector of this. People who have skilled education where critical thinking is taught and required (Medicine, Mathematics, Sciences, Law, Education, Journalism) tend to suffer it less, but no-one is immune completely. For all you know, you or your Manager might be the Donald Trump in the room!

Jokes aside - we have all fallen foul to the Dunning Kruger Effect at some point in our lives – nearly all of of us during schooling or University. Remember that time you didn’t really revise for your exam thinking you had it in the bag, only to realise once you sat down that you didn’t know anything on the paper? That’s the Dunning Kruger Effect at work – over estimating your cognitive ability. Ever been to a conference, confident you understand the topics and concepts but then heard a speaker and realised you don’t know much at all need to do more study? That’s the Dunning Kruger Effect. But there’s a difference there between the Donald Trumps and the rest of us. Trump doesn’t think he needs to learn anything more, and the rest of us realise the more we learn, the more we don’t know, and the more we need to study. That’s how you know you’re doing okay!

Fear of Change

Your Business doesn’t get better by chance, it gets better with change. And fear hates change.
Fear is a liar and is the biggest blocker to innovation. Fear in a scientific sense is a primitive emotional reaction that triggers the fight or flight response releasing adrenalin and cortisone. The key here is emotion – fear is the result of a trigger or stressor that can be brought on by experiences or stories of experiences.

In our society, we’re actually quite used to fear. Politicians, the media, and advertising companies have psychologists working with them to elicit emotional reactions to gain social control, spread fear or simply just to sell a product. One of the most enlightening things about studying Social Psychology is the level in which the media plays a part in public perceptions on everything from crime statistics to climate change. For example -if a government needs a specific piece of legislation passing that is infringing on the privacy of its citizens, conveniently a news story will break that will be so horrific it will make the public think the infringement is well worth giving up a bit of privacy for. The reality is, crime rates have been stable for the last 60 years, but you would never think that by watching the news.

So what does that mean in terms of innovation for businesses? People are so used to fear in their everyday lives that many people exist in a heightened state of brain arousal. Meaning, they’re already slightly anxious, and add to that a perceived fear of losing their job for speaking up, or fear of their peers thinking their point is stupid, means people just don’t say anything.

Fear of change feeds into this – with a heightened state of anxiety and stress, imagine coming to work and your boss announces that the current way you’re doing something is terrible and you need to come up with a better way, and come up with it now. In the average person’s head, they’re thinking – I don’t want to come up with a better way – why can’t I carry on how it is? Do they think the reason the current way is bad is because of me? Is this an elaborate scheme to make me lose my job? Why should I come up with a new way of doing things – I don’t get paid enough!

The result is resistance to change and why change management exists! It’s also why innovation is quite stagnant in established businesses the world over.

But, if you change nothing, then nothing will change.

So how do you start your innovation Journey?

  • Culture: know what you know, and know what you don’t. It’s okay to admit you aren’t an expert on everything. Fill skills gaps with people who do know! Create a culture of ideas exchange, bouncing ideas off each other, and rewards for the team when the idea is implemented.
  • Repeat your innovation process: no idea is a bad idea, and innovation is a learned process and takes time to become a reflex. Set aside Friday afternoons to get together, and have an ideation session.
  • Educate: provide staff with the latest research in your field to foster ideas. Education is the solution to most problems!
  • Get help: change management, organisational psychology – this is a valuable use of time and money

And reach out to ShireWomen – Organisational Psychology and Change Management is our bag, so let us know if you need help. We offer Organisational Psychology and Business Consulting as part of our services.

Reach out to Steph at


Kruger, J., & Dunning, D. (1999). "Unskilled and unaware of it: How difficulties in recognizing one's own incompetence lead to inflated self-assessments". Journal of Personality and Social Psychology, 77(6), 1121-1134.
Sheldon, Oliver J.; Dunning, David; & Ames, Daniel R. "Emotionally unskilled, unaware, and uninterested in learning more: Reactions to feedback about deficits in emotional intelligence". Journal of Applied Psychology, Vol 99(1), Jan 2014, 125-137.
Darley, J. M. & Latané, B. (1968). "Bystander intervention in emergencies: Diffusion of responsibility". Journal of Personality and Social Psychology. 8 (4, Pt.1): 377–383. doi:10.1037/h0025589.
Turner, M. E.; Pratkanis, A. R. (1998). "Twenty-five years of groupthink theory and research: lessons from the evaluation of a theory" . Organizational Behavior and Human Decision Processes. 73 (2–3): 105–115. doi:10.1006/obhd.1998.2756.

Turner, M.; Pratkanis, A. (1998). "A social identity maintenance model of groupthink". Organizational Behavior and Human Decision Processes. 73 (2–3): 210–235. doi:10.1006/obhd.1998.2757.
Costa PT, McCrae RR (1992). "Revised NEO Personality Inventory (NEO-PI-R) and NEO Five-Factor Inventory (NEO-FFI) manual". Odessa, FL: Psychological Assessment Resources.