How Tech Companies Can Break Out Of Innovation Stagnation

For tech companies, early success can be both a gift and a trap. The same products and systems that once made a company unstoppable can just as easily make it too comfortable—quietly turning into guardrails that block real progress.

So how can a tech company maintain the drive to innovate that built its market share in the first place? Many industry leaders say the answer is to stop managing innovation like a quarterly deliverable and start nurturing it like a living, evolving practice. Below, members of Forbes Technology Council share how tech companies can break free from short-term thinking to rediscover what made them great in the first place—solving real problems, building for the future and keeping imagination firmly in the driver’s seat.

Stay Anchored In Problem-Solving

Innovation cannot be a once-a-year exercise. As companies scale, they often lose sight of the fundamentals that sparked their founding—the desire to solve a real problem. When teams stay anchored in problem-solving, they’re empowered to think beyond the next quarter, resist short-term thinking and shiny-object distractions, and stay focused on solving for the future—even if it’s not always perfect. - Brittany Greenfield, Wabbi

Create A Protected ‘Future Labs’ Unit

One effective way for a mature tech company to shake off short‑term thinking and reignite genuine innovation is to create a protected “future labs” unit that operates under a separate charter, budget and governance structure—essentially a small, semi‑autonomous R&D sandbox. Carve out a space where the only KPI is “does this move the needle on future possibilities?” - Eric Wilson, Press Ganey

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Have A ‘Long Bets’ Team Run Six-Week Experiments

Create a protected “long bets” team with a budget, time and customer access. Run six‑week experiments: Kill weak ideas and double down on traction. Measure learning and decision quality, not quarterly revenue. Ensure executive sponsorship, avoid mid-quarter thrash and prioritize curiosity over compliance and outcomes over output. - Nikhil Agrawal, Pazago Inc.

Prioritize Curiosity Over Quarterly Metrics

To break free from the innovation funk, tech companies must rekindle curiosity and prioritize it over quarterly gains. Empower teams to explore “what’s next,” not just “what sells.” Invest in long-horizon R&D, reward bold ideas and reconnect innovation with purpose. True progress begins when vision outruns valuation. - Balaji Adusupalli

Avoid The Hype Cycle

If you’ve done your job as a founder, you’ve identified a market need and are building something to meet it. The problem is that every week a new innovation trend emerges. If you pivot constantly to stay relevant, you’ll lose your purpose. Anchor around a clear mission and vision, reaffirm it often, and resist the urge to chase the new hotness. - Lewis Wynne-Jones, ThinkData Works

Think Beyond Short-Term Gains

Optimizing for short-term gains may seem optimal for some; others think about the incentives that push them toward building a long-lasting legacy. Thinking only in terms of the next quarter leads to a mercenary mentality, as well as problems with hiring and motivating people and maintaining investor confidence. So even in terms of the next quarter, you are going to lose. - Lukasz Bartoszcze, Wisent

Mandate ‘Failure Quotas’ To Encourage Discovery

Tech companies should mandate “failure quotas,” requiring teams to pursue projects with 70%-plus failure probability each quarter. These likely failures must target problems the company itself faces daily but ignores. When Spotify made employees spend 10% of their time fixing their own workflow pain points, they accidentally invented features that became core products. - Sarah Choudhary, Ice Innovations

Balance Experimentation With Strategic Vision

Continuous experimentation with emerging technologies through proofs of concept and pilot projects is essential for innovation. Equally important is maintaining a “5,000-foot view” by consistently engaging with external networks to define a one- to three-year roadmap. This strategic balance ensures tech companies stay on top of evolving technologies and changing business needs. - Ram Tyagi, City of Aurora

Home In On Customers’ Pain Points

The only way out of short-term thinking is to put customers’ pain points back in the center. When a company obsesses over fixing what frustrates its users, real innovation follows. Revenue becomes a by-product, not the goal. - Ajay Jayagopal, Storylane

Establish A ‘Future Innovations Lab’

To shift away from a quarter-driven mindset, companies should focus on solving problems that do not have immediate urgency. One approach is to establish a “Future Innovations Lab”—a compact team dedicated to addressing long-term challenges like productivity, sustainability and CX. These teams should be evaluated not on immediate revenue, but on the strength of their ideas, prototypes and insights. - Sajith Gopinath, Marlabs LLC

Split Your Focus

Break the cycle by splitting focus. Let one organization—led by an SVP of engineering—deliver today’s roadmap, while another—led by a CTO—owns tomorrow’s breakthroughs. Innovation is long-term, and it thrives only when it’s structurally protected from short-term targets. - Krishna Gogineni, Cohesity

Institutionalize Innovation Through Dedicated Teams

To break free from the innovation slump, tech leaders must institutionalize innovation by building dedicated teams and cultivating a culture where bold ideas can flourish without the weight of quarterly pressures. This deliberate approach isn’t just a strategy; it’s the proven playbook that fuels the most groundbreaking and enduring tech companies of today. - Penta Rao Marapatla, BreakthroughT1D

Prioritize Purpose And Agility

Prioritize long-term vision over short-term profit. In a rapidly changing world, short-term gains fade quickly. Organizations must define a clear purpose and build the agility to navigate change while staying anchored to that purpose. - Pabitra Saikia, Truist Bank

Reward Experimentation Tied To Long-Term Impact

To break free from short-term thinking, a tech company must reignite purpose-driven innovation. Establish a “Future Lab” that rewards experimentation tied to long-term impact, not quarterly gains—aligning R&D, customer co-creation and leadership KPIs around solving real, systemic problems instead of chasing trends. - Sanjoy Sarkar, First Citizens Bank

Leverage AI To Rapidly Test Ideas

Pair AI with cross-functional creativity sprints. Instead of just optimizing what exists, companies can use AI to rapidly test bold ideas across design, engineering and business teams. This mix of machine-driven exploration and human imagination helps them break free from quarter-bound thinking and rediscover a culture of true innovation. - Giridhar Raj Singh Chowhan, Microsoft

Solve Internal Inefficiencies

Refocus innovation on solving internal inefficiencies. By applying AI to uncover hidden process friction, tech companies can reinvigorate creativity, accelerate decision-making and unlock new value, proving that operational excellence, not quarterly urgency, is the foundation for long-term innovation. - Chris Brown, VASS Intelygenz

Invite Ideas From Every Department

Innovation can originate from many sources. Form an internal committee solely dedicated to reinventing the wheel. Invite others from different departments for fresh ideas and problems. Soundboard and provide time for employees to “talk shop” or expand on existing ideas. Sometimes a simple two-minute thought can spark a six-figure breakthrough—if teams are given the proper time and effort to cultivate it. - Greg Young, Uniform Law Commission

Build Long-Range Modernization Plans

Long-range plans for technology modernization are a strategic advantage. We all have to stay ahead and plan for new innovations that we can leverage. We are tracking the current amount of time it takes to get things done against new ways of using technology to make us more efficient. This mindset is imperative for success. - Jane Mason, Clarifire

Define Long-Term Goals And North Star Metrics

Break the quarter-to-quarter loop by tying work to clear long-term goals. Define the problem and why it matters, set a few measurable North Star metrics, and set aside time and budget for experiments with simple stage gates. Deliver near-term milestones, but keep a roadmap with sensible timelines to guide sustained progress. - Eddy Azad, Parsec Automation

Exercise Your ‘Innovation Muscle’

Building and exercising an organization’s “innovation muscle,” or the resilience and adaptability to overcome barriers to transformation, is essential. Fostering cultures where ideas are exchanged through open collaboration and continuous learning not only fuels innovation, but also keeps companies agile and future-focused, empowering them to grow, execute with purpose and share knowledge across teams. - Joe Depa, EY