The Step Corporate Innovation Teams Still Skip

Corporate innovation is often treated like a side project: something smart employees will figure out, given enough time. They rarely do, and it is not their fault. The step that keeps getting skipped is structured problem discovery, and skipping it makes everything after expensive.

Corporate innovation is often treated like a side project, something employees can "figure out" if they're just given enough time. However, companies that do a lot of innovation know reality is different. Building corporate ventures is a very refined skill. It requires structured processes, trained teams, and repeatable methods. It is not just time, a big budget, and brainstorming sessions.

Luckily, the numbers back it up.

According to McKinsey, companies that develop expertise in venture building are twice as likely to see their new businesses succeed compared to those that don't. These expert builders also see growth rates that are 2.8 percentage points higher than their starting counterparts (1).

More importantly, reported returns skyrocket as companies mature in their venture-building capabilities. Expert builders generate 12 times more revenue in a venture's fifth year than newcomers despite investing only twice the amount of capital before these projects reach a break-even point (2).

In other words, innovation isn't just about ideas. It's about skills, execution, process, and discipline.

And for me, it all starts with one vitally important skill:

Problem discovery.

Obvious v.s. Non-Obvious problems

Innovation is often framed as a simple equation: Find a problem. Solve it. Grow.

But in reality, this approach is incomplete. As the Category Pirates highlight in The Art of Fresh Thinking, merely identifying a problem isn't enough. You must decide not just which problems to solve, but also how to approach them in a way that sets you apart.

One of the most effective ways to frame innovation is through the Obvious vs. Non-Obvious Quadrant:

The Quadrant of Problems

Obvious Problem + Obvious Solution: The pain point is widely recognized, and so is the typical response. (e.g., "We need faster shipping" → "Invest in better logistics software.") This leads to efficiency-based competition—battles over price, speed, and marginal improvements.
Obvious Problem + Non-Obvious Solution: The problem is clear, but you introduce a fresh, differentiated way of tackling it. This creates a strong competitive advantage—customers already acknowledge the issue, but your unique approach intrigues them.
Non-Obvious Problem + Obvious Solution: The market doesn't realize there's a hidden or undervalued issue. Once revealed, the solution seems obvious—but it feels novel because you've shifted what customers should care about.
Non-Obvious Problem + Non-Obvious Solution: This is the danger zone. The market doesn't yet understand the problem or the solution, making adoption incredibly difficult. Instead of creating a new category, you risk being too early—with a product nobody recognizes they need. Many pioneering ideas fail because they arrive before customers are ready to engage with them.

Companies Can Love the Same Problem, But Not the Same Solution

Multiple companies can succeed by addressing the same problem if they solve it differently. But when companies compete on the same solution, they step into a "better" trap—constantly trying to outperform competitors on incremental features rather than redefining the playing field.

Take single-serve coffee as an example. Both Keurig and Nespresso solve the same fundamental problem ("I want quick, convenient coffee at home"). But their execution is distinct:

Keurig → A vast, affordable ecosystem with third-party coffee brands.
Nespresso → A premium, high-end experience with exclusive, boutique blends.

By framing their solutions differently, both brands dominate their respective niches—without becoming direct substitutes for each other.

Corporate innovators often get stuck in obvious problems with obvious solutions—leading to companies trapped in the "better" cycle, making incremental improvements rather than true differentiation.

Finding a problem isn't enough.

You have to own it.

Solve it in a way that sets you apart. That's the difference between incremental improvements and transformational innovation.

The Costs of Getting Problem Discovery Wrong

Most innovation teams think they're doing problem discovery. In reality, they're just running a confirmation exercise, fishing for answers that validate their assumptions instead of uncovering real market pains. This isn't just a small misstep; it's the reason why so many corporate ventures burn millions only to deliver "innovations" nobody asked for.

Problem discovery isn't about proving you're right. It's about proving you're wrong, fast enough to avoid wasted time, budget, and credibility.

Skipping deep problem discovery doesn't just waste time: it guarantees failure. Here's what happens when teams build on faulty assumptions:

Development Dead Ends

Months (or years) wasted building a product for a problem customers don't actually care about.

41% of executives say a "lack of structured gating" for new product ideas is a top reason for wasted resources (3).

The result? A graveyard of projects that looked good in theory but collapsed in practice.

Unclear Value Proposition

If you don't understand what truly frustrates customers, your messaging becomes vague and uninspiring.

A team might think they're solving "slow approvals," but if the real issue is buried in outdated compliance rules, their solution will miss the mark entirely.

This leads to products that sound promising—but fail to resonate with real buyers.

Missed Opportunities

Focusing only on the obvious problem means you overlook the bigger, more valuable adjacent pains customers struggle with daily.

35% of startups fail due to having "no market need", a stark reminder that failing to identify real problems is one of the top killers of new businesses (4).

Why Most Problem-Discovery Interviews Fail

Most innovation teams assume they already know the problem they're solving. Their interviews aren't about discovering the problem, they're about validating their pre-existing beliefs.

That's why most interviews sound like this:

"Wouldn't it be great if you had a tool that could automate this process?" (Leading question)
"Does this solution sound useful to you?" (Easy to say "yes," even if they don't care)
"On a scale of 1–10, how painful is this issue?" (Oversimplifies a complex problem)
"Would you be willing to pay for this service?" (A leading question that nudges the interviewee toward a positive response rather than revealing their real purchasing behaviour)

These approaches don't reveal anything new. They just confirm whatever the interviewer wants to hear.

How to get Problem Discovery Right.

These conversations separate businesses that waste years chasing the wrong ideas from those that systematically uncover high-value opportunities. Done right, they provide the fundamentals for a scalable business model that is rooted in actual user pain and not wishful thinking.

However, most corporate teams conduct them terribly. Even though literature like "The Mom Test" and "Running Lean" have been advocated repeatedly.

Most teams ask polite, leading questions. They chase confirmation instead of contradiction. They talk too much. And when they don't get the responses they hoped for, they move forward with their idea anyway, ignoring the warning signs.

It's time to fix that.

Your goal isn't to get people to validate your ideas. You should uncover raw, unfiltered insights that challenge your assumptions. You're searching for unexpected patterns, anomalies, and insights that others might overlook.

What problem is occupying their mind, right now?Most teams start with the problem they think matters most. But real pain points aren't theoretical, they dominate your customer's attention. Instead of framing the issue for them, ask: "What's the hardest part of your job right now?" and let them guide you.

What are the 3 to 5 subproblems beneath the surface?Big problems are rarely straightforward, they're complex, layered, and often too broad to act on. Your job is to break them down into the system of frustrations that feed into the core issue. For example, if a manager says, "Approvals take too long," don't stop there. Ask why. Is it bottlenecked by people? Outdated software? Burdensome compliance rules? The deeper you go, the clearer the real problem becomes.

How do they emotionally respond to these problems?Pain isn't just about inefficiencies and practicalities. It's about frustration, stress, and risk. If users shrug off an issue, they won't pay to fix it. If they light up with frustration, you've hit gold. Ask: "What's the most frustrating part of this process for you, and why?"

How do these problems and emotions relate to each other?Individual complaints don't happen in isolation. They stack. A slow approval process might not seem urgent until you realize it delays revenue, kills momentum, and frustrates employees. Your job is to connect the dots between surface-level annoyances and deeper consequences.

What's the measurable impact of these problems?If a problem doesn't cost time, money, or reputation in a business environment, it's not worth solving. You need hard numbers. "How much time does this issue waste per week?" "What happens if this problem persists for another year?"

These answers give you real ROI indicators.

Make Problem Discovery Non-Negotiable

The best innovators don't build first and ask questions later. They treat problem discovery as the price of entry. No funding, no team allocation, and no green light until a problem is validated with hard evidence.

Make Discovery the First Gate

Mandate at least 40+ deep-dive interviews before any project gets serious consideration. If you can't find enough people who truly struggle with the problem, it's not worth solving.

Create a Centralized Discovery Hub

Build a shared repository of insights, transcripts, quotes, problem impact data. This ensures every stakeholder works from the same reality. When discovery is visible, alignment happens faster.

Cut Weak Ideas Early

If discovery interviews reveal weak urgency or lukewarm frustration, kill the idea or pivot immediately. McKinsey's research shows that expert venture builders redirect resources far faster than novice teams, leading to 12x higher revenue in a venture's fifth year (1) (2) (6).

The bottom line?

The best corporate innovators don't assume they know the answers. They interrogate the problem until they find evidence strong enough to bet on.

Because innovation doesn't fail from a lack of ideas.

It fails because teams never proved they were solving the right problem to begin with.

References & Resources

McKinsey & Company, "Corporate Innovation and New Business Building," 2021.
McKinsey & Company, "Expert Builders See Outsized Returns," 2021.
Deloitte Insights, "A Disciplined Approach to Innovation," 2020.
CB Insights, "Why Startups Fail," updated 2023.
Steve Blank, "Why the Lean Startup Changes Everything," Harvard Business Review, 2013.
McKinsey & Company, "Grow Fast or Die Slow: Pivoting Quickly in New-Business Building," 2016.
Eric Ries, The Lean Startup, Crown Publishing, 2011.
Harvard Business Review, "Using Customer Insights to Rally Your Organization," 2019.
Category Pirates, The Art of Fresh Thinking: How to solve new, Non-Obvious Problems with Non-Obvious Solutions, 2024

Problem discovery is module one of PreXLR: 30 to 60 interviews before a euro of build budget moves. If that sounds like your situation, book a discovery call.

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