While global executives value innovation, many lack confidence in their ability to innovate, and are facing challenges in aligning their innovation efforts with their business strategies, according to a report recently released by professional services firm PwC.
The report’s results and insights are based on a survey of over 1,200 executives and business leaders from 44 countries and all major sectors conducted between September 12, 2016 and January 27, 2017. More than half (54%) of respondents reported that they struggle to bridge the gap between their business and innovation strategies, and are thus flying blind as they place bets on innovation.
Most of the respondents also indicated that they have low levels of confidence in their company’s innovation prowess, with just over one-quarter saying they believe they lead their competitors in innovation. However, 20% of these innovation leaders, but only 13% of the remaining respondents, said they expect their company to grow by more than 15% in the next five years.
When asked about the metrics they use for measuring the success of their company’s innovation strategies, the top response was sales growth (69%), followed by customer satisfaction ratings (43%), number of new ideas in the pipeline (40%), market share (36%), number of new products in the pipeline (31%), the net value of the innovation portfolio (28%), and time to market (24%).
The survey findings suggested that companies are becoming more inclusive, and are increasingly adopting open innovation models that bring more voices to the table, including employees and customers. When asked to name the most important internal and external partners for innovation at their organization, 60% of respondents cited internal employees, 50% mentioned technology partners, and 35% cited customers via focus groups, data mining, and other forms of feedback. Moreover, when asked what operating models their organization currently uses to drive innovation, the respondents were most likely to cite an open innovation model (61%); followed by design thinking (59%) and co-creating with customers, partners, and suppliers (55%). By contrast, only around one-third (34%) of respondents cited traditional R&D.
In addition, the report looked at what types of companies are more focused on incremental change, and what sectors are more focused on breakthrough innovation, or making significant innovations that result in the development of major new technological or market applications. The survey results showed that the companies that are most likely to be focused on breakthrough innovation are in the technology sector (58%); followed by in the pharmaceutical and life sciences (51%), health services (47%), communications (45%), and automotive (43%) sectors.
From Benefit Trends Newsletter, Volume 60, Issue 6
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