6 Key Innovation Insights From Business Surveys
Innovation has been getting a lot of attention over the past few years. In the wake of COVID19, some organisations are cutting back on innovation. Other organisations are looking to their innovation capabilities to quickly respond to the tough business environment. Afterall, corporate innovation is about finding new and innovative ways to identify ways to solve business problems and identify and exploit opportunities.
Having recently trawled through some of the Executive surveys covering innovation, there are some common and important themes that provide some useful insights for anyone involved in leading or doing innovation. These insights are as important today, if not more important, as organisations look to navigate the COVID19 challenge.
Here are the 6 key insights.
1. Innovation is a priority and correlated with superior (expected) performance
The McKinsey Global Survey revealed that 96% of executives defined innovation as a strategic priority, and 84% say that innovation is important to their growth. At the same time, 80% are concerned that their business model is at risk.
In 2015 the Accenture US Innovation Survey found that 84% of executives considered their future success to be very or extremely dependent on innovation.
In the recently released Conference Board’s 2020 business survey global leaders put creating new business models to address disruptive tech in the top 3 ‘hot button’ issues.
The PWC Innovation Benchmark Study found that the one quarter of companies that see themselves as innovation leaders are more positive about their growth prospects than other companies.
The PWC Global Innovation 1000 study found for the <10% of companies that qualify as high-leverage innovators, sales growth was 2.6 times higher that those in the balance of the 1,000.
Recent Bain and Company research found that experienced innovators grew their market capitalisation at a five-year compound annual rate of 9.5% This compares with just 0.5% for those with the least experience.
So what? The survival of your company probably depends on your ability to innovate!
2. Although a priority…. some executives are dissatisfied with their innovation efforts
According to the PWC Innovation Benchmark Study, 72% of the survey group respondents say they're not out-innovating their competitors.
While McKinsey found only 6% of executives are satisfied with Innovation performance.
The COVID19 crises has brought this into stark focus. In those organisations where confidence in the innovation capability is low, ongoing investment innovation is likely to be under threat.
So what? The last thing you need is dissatisfied executives. You need support from the top. There may be more work needed to get your innovation model working and showing results so people can believe in it!
3. Aligning innovation and business strategy is difficult....but pays dividends
According to the responses to the PWC Innovation Benchmark Study:
54% of innovating companies struggle to bridge the gap between innovation strategy and business strategy
65% percent of companies investing 15% or more of revenue in innovation say that aligning business strategy with innovation vision is their top strategic challenge.
On the other hand, the PWC Global Innovation Study found 77% of ‘outperformers’ said their innovation strategies were highly or closely aligned with their business strategies.
So what? Investing the time and effort in getting your innovation and business strategies connected and working in support of each other is critical. Getting them aligned is one of the keys to sustainable and impactful innovation!
4. The most successful innovators are focusing on digital....as well as AI and platforms
BCG's Most Innovative Companies 2018 reported that 79% of strong innovators say they have properly digitized the innovation process,with only 29% of weak innovators made the same claim.
BCG's Most Innovative Company Survey 2019 finds the companies on the most innovative list — especially those in the top ten — say the extensively use AI and platforms (and digital) - see Exhibit 1.
So what? If digital, AI and platforms are not prominent in your innovation roadmap you may be left behind - perhaps reconsider!
5. Innovators are using ‘collaborative’ and ‘open’ innovation models
According to Bain and Company, the strongest innovators say they use a variety of approaches, with Corporate Venture Capital and Accelerators being popular among experienced innovators.
The PWC Innovation Benchmark Study found more-inclusive operating models are popular with innovators with:
open innovation;
design thinking; and
Co-creating with customers, partners and suppliers
being most popular.
The PWC Global Fintech Report 2019 found about 50% of financial services and technology media and telecommunications companies now recognise Fintech as an important lever in their operating model strategies.
So what? More inclusive, open and wide-reaching innovation tools must form part of your innovation tool kit!
6. Leadership and culture remain critical with rewards used by experienced innovators
The PWC Global Innovation 1000 Study reported that the top three most important factors for successful innovation where:
65% 'innovative behaviours and culture'
63% 'fresh thinking'
54% 'strong C-suite leadership'
Developing a more creative culture was ranked the third most important “hot button” internal issue by global leaders in the Conference Board’s latest annual survey of global business leaders.
Bain and Company found experienced innovators are more likely to reward employees for trying new things and to acknowledge their efforts even when it doesn't work out. And these rewards take various forms - faster promotion, greater equity and bonus compensation, and favourable performance reviews.
So what? As has always been the case, getting leadership on board remains critical. You might also wish to whether your rewards for innovation are driving the best outcomes!
In summary...
There are a lot of surveys out there that cover innovation. But there are some common and important themes that provide some useful reference points for anyone involved in leading or doing innovation. These themes and insights are more important now than ever as organisations look to navigate the COVID19 challenges. And they are:
Innovation is a priority and correlated with superior (expected) performance - so you need to help your company make it work....the survival of your company probably depends on it!
Although a priority…. some Executives are dissatisfied with their innovation efforts - so there may be more work needed to get your innovation model working so people can believe in it!
Aligning innovation and business strategy is difficult....but pays dividends - so it is worth investing the time and effort in getting the two connected and working in support of each other!
The most successful innovators are focusing on digital....as well as AI and platforms - so if these aren't on your innovation roadmap you may wish to reconsider!
Innovators are using ‘collaborative’ and ‘open’ innovation models - so they should be an important part of your innovation tool kit!
Leadership and culture remain critical with rewards used by experienced innovators - so getting leadership on board remains critical and you may wish to look at how you reward innovation!
11eight is a specialist advisory firm helping Corporates get better results from their innovation and helping start-ups get ready to work with Corporates. Please sign up to our Newsletter and you can contact us here.
