Does your board demand innovation? Is there pressure to constantly innovate because we live in an era of obsession? Do your investors reward innovation?
Working closely with innovation leaders, we see the pressures that teams face daily from board members, investors and business units wanting speed and scale. Executives even sprinkle it into every annual report to show how forward-thinking they are. Yet behind the bright headlines and glossy pilot announcements lies a sobering reality: most corporate innovation projects fail to scale to the levels required.
Despite the enthusiasm, only 22% of pilots make it past the scaling phase, according to BCG’s Innovation Playbook. Even more striking, McKinsey reports that less than 30% of pilots ever reach wide adoption, and 84% of companies admit their pilots languish in ‘pilot purgatory’ for more than a year.
So it begs the question, why does this happen? More importantly, how can innovation leaders finally close the chasm between a promising prototype and real, enterprise-wide impact?
The brutal data behind pilot failures
When you dig into the numbers, the problem becomes crystal clear. FounderNest data suggests that the average timeline from proof of concept (PoC) to full-scale deployment can stretch anywhere from 18 to 36 months, if it even happens at all. All this is directly influenced by bureaucracy, company vision and communication.
Most projects hit the wall at three critical stages: right after PoC, before securing internal funding, and during enterprise integration.
In our work with Fortune 1000 clients, we’ve found that over 70% of partnerships fail before even entering a paid pilot. And among those that do progress, the average conversion from PoC to scaled deployment is a paltry 25%.
Here’s where they drop off:
- After PoC: Early excitement fades when the business case isn’t robust enough to warrant more investment.
- Before funding: Projects stall without a clear budget champion or competing for scarce resources.
- During integration: Even strong pilots falter when technical and operational complexities surface.
Why over 70% of Pilots Never Progress
What causes these high failure rates? The root causes typically fall into three connected buckets:
1. Lack of clear business value
This tends to be the biggest innovation blocker, with many pilots kicking off based on buzz rather than concrete value in solving a problem. A common pattern is that a business unit wants to ‘explore AI,’ so they fund a quick experiment. But when executives ask, “How will this move the needle on revenue or costs?”, the answer is fuzzy with no real strategy shared.
In one well-documented airline IoT case, the pilot achieved a mere 1.4% adoption rate because no one clarified the business outcome metrics upfront. Without clear ROI or operational KPIs, projects become easy targets when budgets tighten.
I’ve also heard it first-hand from a manager in the NHS who was tasked with exploring and integrating AI into their tech stack purely because of the buzz in the market. No clear challenge or strategy was identified first.
It’s imperative that organizations start by defining quantifiable success criteria and not just technical milestones, but real business impact. Only then can pilots graduate beyond being shiny toys into strategic growth levers.
2. Insufficient executive ownership
Scaling is as much a political exercise as a technical one. In successful cases, there’s always a senior leader who is a true internal champion, tying the innovation effort to broader strategic objectives.
However, in too many organizations, pilots are delegated to IT or innovation labs with no direct business accountability. When a key executive sponsor leaves or priorities shift, the project loses air cover and momentum stalls.
Endless internal approvals compound the problem. Instead of decisive, top-down commitment, teams get stuck in cycles of ‘committee purgatory,’ repeatedly justifying budgets, compliance, and resource allocations, slowing down any momentum of the project.
3. Scaling was not designed from the start
Perhaps the most overlooked reason why most pilots fail is that they are rarely built with scalability in mind from the beginning.
Many PoCs are optimized to work in narrow, controlled environments. This could be a single warehouse, a few retail stores, or a local region. But when leaders attempt to expand them globally, foundational flaws emerge, such as siloed data architectures, non-interoperable systems, or dependency on niche vendors who can’t handle enterprise volumes.
FounderNest data highlights that over 60% of partnerships stall because integration challenges weren’t anticipated upfront. Once the real cost and complexity of scaling appear, executives often lose patience or, in severe cases, funding.
What high-performing innovators do differently
The good news is that scaling innovation is not an unsolvable puzzle. There are companies that consistently move beyond pilots and deliver measurable impact at scale. They tend to share three traits.
1. Design for scale from day zero
Top performers don’t just build pilots, but instead they architect minimal viable products with scalability in mind. This includes:
- Choosing technology stacks and vendors that support global deployment.
- Anticipating integration points with core enterprise systems.
- Designing operational playbooks early, not as an afterthought.
When teams think beyond “Can we prove it works?” to “How do we replicate and sustain this across 20 business units?”, they make very different design decisions, and usually avoids painful rewrites later.
2. Embed business units and secure executive commitment
Instead of treating pilots as isolated tech experiments, high-performing organizations embed business leaders from the outset and build their excitement.
This means:
- Assigning a P&L owner or senior executive who benefits directly from success.
- Tying pilot success to business KPIs (cost reduction, new revenue streams, NPS improvement).
- Empowering business units to own budget decisions, not just innovation or IT teams.
When business leaders have real skin in the game, pilots become strategic imperatives rather than optional science projects.
3. Build a robust governance and funding model
Scaling requires sustained investment. Leading companies don’t rely on sporadic funding rounds but establish clear governance frameworks to allocate resources systematically.
Some progressive firms even create dedicated ‘scale funds’ where budget is set aside specifically earmarked for scaling validated pilots. These funds help avoid bureaucratic delays and signal top-level commitment.
Moreover, clear and ruthless go/no-go gates ensure that only high-potential pilots receive further investment. Transparency in these decisions builds trust and keeps teams focused on outcomes rather than perpetual experimentation without building too much affinity to projects that will never scale.
The case for an innovation discipline
The harsh truth is that innovation theater - pilots for the sake of PR or internal morale is easy. Real innovation that scales is hard, slow, and often politically fraught. But, simply put, it’s also the only path to long-term competitive advantage.
Executives need to treat scaling as a discipline in itself, distinct from experimentation. It requires different capabilities, including enterprise architecture foresight, cross-functional governance, and rigorous business case design.
Companies that excel at this don’t just innovate more and faster. They build resilience, unlock new growth engines, and ultimately create lanes that are far harder for competitors to replicate.
Key takeaway for scaling innovation
If there is one actionable point you can take from this article it’s this… The next time your company starts a new pilot, ask a simple question: Are we designing this to scale from the start?
If not, chances are it will become another slide in a quarterly innovation update, rather than a true driver of transformation.
The era of pilot purgatory needs to end. Organizations that master scaling will be the ones still standing and thriving a decade from now.
