Three Amazing Reports On The State Of Innovation - Part I
Table of contents for State of Innovation
- Three Amazing Reports On The State Of Innovation - Part I
- Three Amazing Reports On The State Of Innovation - Part II
In December, three international consultants published the results of their research on the current state of innovation. This four-part series will cover each in turn, then I’ll add a conclusion that ties them together. First on the block - Innovation 2007 from the Boston Consultancy Group.
Innovation 2007 publishes the results of BCG’s survey of over 2400 senior-level executives. First, the key results:
- Innovation is a high strategic priority for about two-thirds of the respondents (23 percent say it’s their highest priority), and they are going to spend a lot of money on it this year.
- Most respondents are unsatisfied with the payback on their innovation spending. Why aren’t they getting a better payback? The biggest factor was a “risk-averse corporate culture.”
Whenever I read a survey like this I like to cut to the chase - what does the surveyor, and respondents, mean by ‘innovation?’ In this case, on page 14 the respondents clearly state:
- Revolutionary new products that create new markets
- New offerings that attract new customers
- New offerings for existing customers
- Improvements to existing products
- Cost reductions on existing products
Products, products, products, and the new and improved markets associated with them. This amazes me (see below).
The survey includes a self-assessment of strengths and weaknesses.
- Strengths: understanding customer needs and getting executive buy-in. To a lesser extent, respondents also cited: supporting innovation project teams, partnering with others for new ideas, and fostering an innovation-supporting culture (in direct opposition to what was stated above!).
- Weaknesses: time delay on moving from ideation to sales, enforcing project milestones, and internal coordination. Half the respondents said they were weak at business model innovation, and were averse to leveraging open-source options.
The respondents were asked who they thought the most innovative companies were. Their top five innovative companies were:
- Apple - uncanny grasp of customer needs and elegant product design
- Google - ability to get new offerings to market fast, and their unique innovation culture which stimulates and motivates employees
- Toyota - strategic vision, anticipating customer needs, commitment to quality
- General Electric - high diversity of offerings, ability to take control of any market they choose to enter
- Microsoft - new product offerings, quality, speed
My thoughts:
1. It never ceases to amaze me that, even today, with so many examples to contrary out there, companies continue to focus on product innovation to the exclusion of everything else. For instance, the survey responses acknowledged, to some extent, the importance of business model innovation (one of the reasons they like Apple and Google so much) yet none cite it as an innovation focus for their company.
2. The companies the respondents admire are real innovators for sure, and respondents seem to have a good grasp on what makes them so innovative. So…why aren’t these people emulating them? What can they learn from Apple, Google, et. al.?
3. At all levels, innovation was associated not just with progress, but with risk. When focusing on new product innovation, this is indeed a huge concern, as most new products fail. But by focusing innovation on other targets - business model, networking, customer experience, branding - risk can be largely mitigated. Companies like Apple and Google put out new products but excel at those types of innovations too. Yet again, the respondents seem to instinctively know this…have they not yet made the connection?
Part II focuses on a survey from Booz-Allen-Hamilton.
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We have been using http://www.employeesuggestionbox.com for our employees to submit at least 1 idea a month and after 4 months we have already implemented 6 ideas resulting in a new product and other cost saving measures.
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