Thoughts on Two Interesting Innovation Surveys

I just finished reading through two innovation surveys.  The first is a report from the Boston Consulting Group: Innovation 2007; the second is from Capgemini: The CEO Innovation Agenda.  Both surveys were targeted at management.  The BCG report is global in scope; the Capgemini focuses on a study of Swedish companies.  There are some interesting points of intersection in the reports.

Of course, it comes as no surprise that both reports find that innovation remains a top priority among CEOs and other executives.  Given that globally companies are looking at 70% of their products fading into obsolescence in the next few years, the focus on innovation is well deserved.  This is further reinforced by the observable correlation between success at innovation and long-term stock performance.

What is surprising is that many organizations still don’t feel the need to explicitly manage innovation.  In many organizations, there exists a disconnect between innovation ambition and innovation execution.  Too many companies are talking the talk, but not walking the walk of innovation.  As a result, employees often to do not share management’s view of innovation priority, and workers feel innovation is someone else’s job.

The assumption that innovation success will happen in the absence of strong top-level support and involvement is very dangerous.  The BCG report cites CEO commitment as the biggest driver of innovation in organization, and having a strongly positive CEO is probably a critical success factor to successfully creating a vital innovation culture.

It is also reported that many companies consider themselves to be good at specific types of innovation.  Yet most companies are dissatisfied with their innovation results.  They identify a lack of methods and tools for managing innovation.  Also mentioned is a difficulty in striking the right balance between driving innovation and focusing on core issues such as bottom line results.  Often companies see themselves as being weak at systematically screening market for new opportunities.  Many companies also consider their low risk tolerance as an impediment to innovation.

It is interesting to note however, that both reports analyze a set of top innovation companies, and some definite commonalities are readily observed.  Top innovation companies practice explicit and structured innovation management.  These companies are viewed as being able to reinvent themselves and able to predict what their customers will want.

It is no accident that these two observations about top innovation companies go hand in hand.  Companies that have an explicit focus on innovation and that actively implement the systems to support that focus will always come out on top.  It is just a simple example of the “you get what measure and reward” paradigm.  What may not be so obvious though is that these top innovators have not had to become more risk tolerant.  Rather, their innovation management systems have provided them with a much more robust risk management strategy.  The application of strong innovation tools and methods naturally yields higher value innovation with lower risk.

Comments

[Lauchlan Mackinnon]

Hi James,

How did you register for the CapGemini one? The page you linked to is in another language, and the English site does not appear to have the same article.

Thanks in advance!

Lauchlan Mackinnon

[James Todhunter]

Hello Lauchlan,

I just guessed at how to fill in the registration form!

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