Our new innovation survey has found 47% of senior executives describe their innovation activity as a 'costly failure'.
Our research, including 751 senior executives, spanning 15 countries and nine sectors, shows that organisations are losing money and missing out on valuable opportunities.
Our survey reveals five ‘innovation killers’ that senior executives must address to stop their great ideas from leaking through the cracks.
As we analysed our survey data, we looked for correlations in the results that pointed to best practice approaches to innovation. In particular, we sought to isolate the key traits shared by the most outstanding innovators. This group of ‘innovation leaders’ strongly believe their leadership is good at encouraging and nurturing innovation, and, for the private sector respondents, 35% had delivered over 10% EBITDA growth in the last year, compared to just 16% of the rest of the private sector respondents. The following are six behaviours that separate the leaders from the rest.
Here are some highlights of the key findings from each sector.
A siloed approach to innovation is unlikely to succeed. To deliver transformational results, innovation has to move beyond the R&D department and become firmly embedded in the culture of the organisation. To achieve this, our research suggests seven recommendations that senior executives should consider to convert innovation investment into profitable return.
For all kinds of innovation, organisations need to be doing something new, visionary and bold. They need to be prepared to take risks. Strategic innovation might mean cannibalising your own business or opening your organisation up to new threats. Internal innovation might mean abandoning processes that have been in place for decades.
By selecting practical and risk-averse leaders, many organisations have remained profitable despite the ravages of the global financial crisis. Today, organisations need a wider mix of talents and skills at the top. As well as professionals from financial and operational backgrounds, they need creative talent to challenge assumptions about what their organisation should and should not do.
Across sectors, the same barriers to innovation crop up again and again. The resources are not available. Our creativity is stifled by rules and risk aversion. Infrastructure is inflexible. We have good ideas but struggle to implement them. Organisations can make these problems go away by putting a set of standard ‘antibodies’ in place. for example, incentivising employees to come up with and implement ideas.
Our research suggests that a narrow focus on profit and loss can stifle innovation. The best innovations evolve slowly, need regular rework and simplification, and often look very different by the time they are finished. As a result, organisations need to think differently about what constitutes – and what is likely to create – lasting success.
Failing fast is not a new concept, but many organisations are still reluctant to endorse failure of any kind. As experimenters in defence and transport have shown, however, failure does not need to be expensive. Neither should it lead to career risk. Brilliant innovators encourage innovation time among all their employees. Some even consider celebrating or rewarding near-miss ideas that were good, but not possible.
Whatever kind of innovation they are pursuing, organisations need to adopt a ‘disruption mindset’ to ask whether digital technologies could make their tried-and-tested approaches more effective. How would a tech startup use digital technology to rethink an internal HR process? How would they redevelop a successful existing product – would they even keep that product going or abandon it altogether?
Innovation is as much about interpreting and repurposing existing ideas as it is about coming up with entirely new ones. Brilliant innovators look to other sectors, to see how they can adapt their innovations. Brilliant innovators spend time getting to grips with emerging concepts outside their core industry as well as from their direct competitors.
Our new innovation report is based on an international survey completed by 751 senior business and government executives. Public and private sector respondents came from across defence, energy and utilities, financial services, healthcare, life sciences, consumer products and manufacturing, public sector and transport and logistics.
Our research raises a number of vital questions for leaders with responsibility for delivering innovation. Our full report covers:
Our view of the innovation challenge that organisations face
Cross-sector learnings for addressing the innovation drain
Best practice examples from 24 interviews with innovation leaders
Analysis by sector and key findings
Analysis by country and key findings