Innovation is back at the top of the corporate agenda. Never a fad, but always in or out of fashion, innovation gets rediscovered as a growth enabler every half-dozen years. Too often, however, grand declarations about innovation are followed by mediocre execution that produces anaemic results, and innovation groups are quietly disbanded in cost-cutting drives. Each generation embarks on the same enthusiastic quest for the next new thing and faces the same challenge of overcoming innovation stiflers.

Despite changes to the environment and differences among types of innovation, each wave of enthusiasm has encountered similar dilemmas. Most of these stem from the tensions between protecting revenue streams from exis-ting businesses critical to current success and supporting new concepts that may be crucial to future success. These tensions are exacerbated by the long-known phenomenon that important innovations often arise from outside an industry and beyond the established players, creating extra pressure for companies to find the next big concept quickly.

Despite all the research and literature, I still observe executives exhibiting the same lack of courage or knowledge that undercut previous waves of innovation. They declare that they want more innovation but then ask, "Who else is doing it?" They claim to seek new ideas but shoot down every one brought to them. And, repeatedly, companies make the same mistakes as their predecessors. It is inevitable that historical memory will fade – but it is not inevitable that we lose the lessons. Here is a chance to collect some of what is known about innovation traps and how to avoid them.

Strategy mistakes
The potential for premium prices and high margins lures executives to seek blockbuster innovations – the next iPod, Viagra, or Toyota Production System. Along the way, they expend enormous resources, though big hits are rare and unpredictable. Meanwhile, in seeking the killer application, managers may reject opportunities that at first glance appear too small, and people who aren't involved in the big projects may feel marginalised.

For years, large consumer products companies typically screened out ideas that couldn't result in revenues of several hundred million dollars within two years. This screen discouraged investments in ideas that couldn't be tested and measured using conventional market research, or that weren't grounded in experience, in favour of ideas that were close to current practice and hardly innovative. In the 1980s and 1990s, Pillsbury, Quaker Oats, and even Procter & Gamble were vulnerable to smaller companies that could quickly roll out new products, thus eroding the giants' market share. P&G, for example, lamented not having introduced a new toilet bowl cleaner before a competitor did, despite its labs' having developed similar technology. The rival, of course, gained dominant market share by being a first mover. Likewise, Pillsbury and Quaker lagged the competition in bringing new concepts to market and were eventually acquired.

Process mistakes
A second set of classic mistakes lies in process; specifically, the impulse to strangle innovation with tight controls – planning, budgeting, and reviews applied to existing businesses. The inherent uncertainty of the innovation process makes sidetracks or unexpected turns inevitable. The reason upstart Ocean Spray could grab the paper-bottle opportunity from large US juice makers is that the big companies' funds had already been allocated for the year, and they wanted committees to study the packaging option before making comm-itments that would deviate from their plans.

Performance reviews, and their associated metrics, are another danger zone for innovations. Established companies don't just want plans; they want managers to stick to those plans. They often reward people for doing what they committed to do and discourage them from making changes as circumstances warrant.

Structure mistakes
While holding fledgling enterprises to the same processes as established businesses is dangerous, companies must be careful how they structure the two entities, to avoid a clash of cultures or conflicting agendas.

The more dramatic approach is to create a unit apart from the mainstream business, which must still serve its embedded base. This was the logic behind the launch of Saturn as an autonomous subsidiary of General Motors. GM's rules were suspended, and the Saturn team was encouraged to innovate in every aspect of vehicle design, production, marke-ting, sales, and customer service. The hope was that the best ideas would be incorporated back at the parent company, but instead, after a successful launch, Saturn was reintegrated into GM, and many of its innovations disappeared.

Skills mistakes
Undervaluing and underinvesting in the human side of innovation is another common mistake. Top managers frequently put the best technical people in charge, not the best lea-ders. These technically oriented managers, in turn, mistakenly assume that ideas will speak for themselves if they are any good, so they neglect external communication. Or they emphasise tasks over relationships, missing opportunities to enhance the team chemistry necessary to turn undeveloped concepts into useful innovations.

Groups that are convened without attention to interpersonal skills find it difficult to embrace collective goals, take advantage of the different strengths various members bring, or communicate well enough to share the tacit knowledge that is still unformed and hard to document while an innovation is under development. Innovation efforts also bog down when communication and relationship buil-ding outside the team are neglected. Innovators cannot work in isolation if they want their concepts to catch on. They must surely build coalitions of supporters who will provide air cover for the project, speak up for them in meetings they don't attend, or sponsor the embryonic innovation as it moves into the next stages of diffusion and use. To establish the foundation for successful reception of an innovation, groups must be able to present the radical so it can be understood in familiar terms and to cushion disruptive innovations with assurances that the disruption will be manageable.

Innovation remedies
The quest for breakthrough ideas, products, and services can get derailed in any or all of the ways described earlier. Fortunately, however, history also shows how innovation succeeds. "Corporate entrepreneurship" need not be an oxymoron. Here are four ways to win.

Strategy remedy: Widen the search, broaden the scope. Companies can develop an innovation strategy that works at the three levels of what I call the "innovation pyramid": a few big bets at the top that represent clear directions for the future and receive the lion's share of investment; a portfolio of promising midrange ideas pursued by designated teams that develop and test them; and a broad base of early stage ideas or incremental innovations permi-tting continuous improvement. Influence flows down the pyramid, as the big bets encourage small wins heading in the same direction, but it also can flow up, because big innovations sometimes begin life as small bits of tinkering – as in the famously accidental development of 3M's Post-it Notes.

Indeed, an organisation is more likely to get bigger ideas if it has a wide funnel into which numerous small ideas can be poured. One of the secrets of success for companies that demonstrate high rates of innovation is that they simply try more things. An innovation strategy that includes incremental innovations and continuous improvement can help to libe-rate minds throughout the company, making people more receptive to change when big breakthroughs occur.

Process remedy: Add flexibility to planning and control systems. One way to encourage innovation to flourish outside the normal planning cycles is to reserve pools of special funds for unexpected opportunities. That way, promising ideas do not have to wait for the next budget cycle, and innovators do not have to beg for funds from managers who are measured on current revenues and profits. In the mid-to-late 1990s, autocratic management and rigid controls caused the BBC to slip in programme innovation and, consequently, audience share. Budgets were tight, and, once they were set, expenditures were confined to predetermined categories. In 2000, a new CEO and his CFO relaxed the rules and began setting aside funds in a corporate account to support proposals for innovation, making it clear that bureaucratic rules should not stand in the way of creative ideas. The BBC's biggest hit comedy in decades, The Office, was an accident, made possible when a new recruit took the initiative to use money originally allocated for a BBC training film to make the pilot.

Structure remedy: Facilitate close connections between innovators and mainstream businesses. While loosening the formal cont-rols that would otherwise stifle innovations, companies should tighten the human connections between those pursuing innovation efforts and others throughout the rest of the business. Productive conversations should take place regularly between innovators and mainstream business managers. Innovation teams should be charged with external communication as part of their responsibility, but senior leaders should also convene discussions to encourage mutual respect rather than tensions and antagonism. Such conversations should be aimed at mutual learning, to

minimise cannibalisation and to maximise effective reintegration of innovations that become new businesses. In addition to formal meetings, companies can facilitate informal conversations-as Steelcase did by building a design centre that would force people to bump into one another-or identify the people who lead informal cross-unit networks and encourage their efforts at making connections.

Skills remedy: Select for leadership and interpersonal skills, and surround innovators with a supportive culture of collaboration. Comp-anies that cultivate leadership skills are more likely to net successful innovations. One reason Williams-Sonoma could succeed in e-commerce quickly and profitably was its careful attention to the human dimension. Shelley Nandkeolyar, the first manager of Williams-Sonoma's e-commerce group, was not the most knowledgeable about the technology, but he was a leader who could assemble the right team. He valued relationships, so he chose a mixture of current employees from other units, who could be ambassadors to their former groups, and new hires that brought new skills. He added cross-company teams to advise and link to the e-commerce team. He invented an integrator role to better connect operations groups and chose Patricia Skerritt, known for being relationship oriented, to fill it.

Established companies can avoid falling into the classic traps that stifle innovation by widening the search for new ideas, loosening overly tight controls and rigid structures, forging better connections between innovators and mainstream operations, and cultivating communication and collaboration skills. Innovation involves ideas that create the future. But the quest for innovation is doomed unless the managers who seek it take time to learn from the past. Getting the balance right between exploiting and exploring requires organisational flexibility and a great deal of attention to relationships. It always has, and it always will.