Why Most Corporate Innovation Fails, and What to Do Instead, with Eric Ries on Trust, Governance & Transformation

We’ve worked inside dozens of large organizations trying to spark innovation—through venture studios, strategic pilots, new governance models, you name it.

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So sitting down with Eric Ries (Founder of LTSE and Answer.ai and author of the NYT Best Seller, The Lean Startup) felt like talking to the person who first gave language to a lot of the battles we fight every day.

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This wasn’t a theory-heavy conversation. It was a raw and often blunt discussion about why most corporate innovation fails—and what it actually takes to get it right.

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Here are four lessons that stuck with us:

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1. Innovation evolves in phases—and what works in one phase will fail in the next.

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Eric broke it down into three stages:

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→ Phase 1: Grassroots experiments. Small teams proving viability inside a rigid system.

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→ Phase 2: Executive conviction. Someone at the top says “I’ve seen enough—let’s go.”

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→ Phase 3: Deep systems change. Governance, incentives, budgeting, promotions.

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Most companies stall after phase one. They run a few workshops, pilot a few MVPs, and hope the system will magically change. But without executive belief—and structural rewiring—it’s just a round of innovation theater.

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You don’t scale transformation by accident. It requires deliberate, phased effort—backed by long-term commitment.

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2. Corporate innovation fails without trust.

This one hit hard.

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You can’t innovate if your customers don’t trust you. You can’t innovate if your employees don’t believe you. You can’t innovate if your investors panic every time you try something new.

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According to Eric, this is why many companies test new ideas under “shadow brands” or off-brand identities—not just to manage reputational risk, but to move faster, limit competitor visibility, and avoid premature market signaling.

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But if your brand is already distrusted, the risk isn’t launching something new—it’s doing nothing at all.

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3. “Strong governance” might be killing your company.

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Eric challenged one of the most deeply held beliefs in corporate boardrooms: that strong governance = strong performance.

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In his view, we’ve confused shareholder control with good governance. And it’s hollowed out companies from the inside.

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Instead of founder-led or investor-led companies, he argues for mission-led companies—those with a clear reason to exist beyond quarterly returns. That’s the only way to earn and sustain long-term trust.

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If governance doesn’t support the mission, then it’s just control for control’s sake.

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4. Constancy of purpose is rare—and essential.

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This might be Eric’s core message. Innovation is easy to start, hard to finish.

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Everyone’s excited in the beginning. There’s budget, energy, sponsorship. But when the market shifts? When leadership changes? When the next internal fire breaks out?

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That’s when most organizations abandon the work.

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The companies that succeed are the ones that hold the line. They stay true to purpose. They build systems around it. And they understand that trust and transformation are not one-time events—they’re ongoing commitments.

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Final thought:

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You can’t workshop your way to innovation (although it can be a good place to start!). And you can’t brute-force transformation from the top down.

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It takes belief. It takes systems. It takes trust.

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And above all else, it takes the constancy of purpose to stick with it when it’s no longer trendy.

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