Why have certain IT issues persisted despite shortening innovation cycles?
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In Public Sector, Government, and Healthcare- it’s because of the 6 P’s. Politics, protocol, paperwork, pace, personal agendas, and poor communication. All these lead to no risk taking and maintaining a status quo. Thus in spite of innovation, nothing gets done.
Depending on the issue, the issue itself may not be completely resolvable. For example, disruptions to service is something you can improve on but I don't think it's completely resolvable. Innovation may allow you to add more resiliency into your architecture but there will always be those corner cases which are very difficult to resolve.
Because people stay the same. Change requires people to change their thinking. And most people are unwilling to do this.
Then there's the fact that people can only move/work so fast. The speed of your people has always to be kept in mind.
Perhaps a to wider scope? Innovation isn't problem management?
When launching a new innovation initiative, be clear on what you are trying to solve for so that underlying things like technical debt, which may be causing specific issues in the environment are addressed.

Legacy code and systems, modernization of business applications and platforms is not happening in parallel with IT, IT is modernizing the infrastructure, tools, and technology, but that is insufficient without business apps modernization and shift from legacy code and systems.