Innovation Is About More Than The Next Big Thing10 March, 2017 / Articles
Extraordinary disruption. Wholesale market transformation. The need for innovative ideas and even reinvention. CEOs are grappling with these issues, whether they’re leading a consumer products company, a hospital, a financial institution or a professional services firm like KPMG.
Leaders recognize that they are operating in a new world, where boundaries are no longer defined and where innovation is vital for growth. According to KPMG’s U.S. CEO Outlook 2016, the vast majority of CEOs surveyed revealed that the next three years will be more critical for their industries than the last 50. Fostering innovation was high on their list of concerns, surpassed only by meeting customer demands.
There are many ways that leaders can influence their organizations’ capacity to embrace innovation. One of the most powerful is culture. Culture is nourished by human motivation—a limitless resource that can sometimes be underestimated. The most forward-leaning leaders are single-minded about creating company cultures that foster a true spirit of innovation.
Seventy-seven percent of the CEOs surveyed say it’s important to include innovation in their business strategies, yet 36 percent say their companies’ approach to innovation is still siloed, outsourced or unpredictable. It seems, then, that leaders understand that innovation is the key to the future, but many haven’t yet woven it into the fabric of their organizations.
At times, the task seems overwhelming. Eighty-five percent of CEOs recognize that they don’t have sufficient time to strategize about reacting to disruptive forces. However, they are realizing that innovation is not just a sidebar, but perhaps their most important area of focus.
The most resilient companies foster a pervasive culture of innovation at all levels of the organization—one that values risk-taking, embraces experimentation and considers failure an inevitable part of thinking boldly.
At KPMG, we call it “Innovation at Our Core” because it starts with our vision and strategy and forms the core of how our people think about themselves, their clients and the firm. Our people know that it is safe to experiment and fail, but fail fast. And we encourage everyone, no matter their job title or years of experience, to pursue inventive ideas and raise them up for possible inclusion in KPMG’s innovation development pipeline.
Learn how innovation is a real-time priority at KPMG for enhancing the quality of the audit.
We have always believed that the most successful solutions reflect a diversity of skills, thinking, experiences and outlooks. The value of this approach can be seen in our program of internal “Innovation Challenges,” where diverse teams compete to devise breakthrough solutions to our clients’ most pressing business challenges. Winning ideas come from any part of the organization, receive central funding, are nurtured by experienced mentors, and are scaled and deployed across our business.
CEOs who strive to foster cultures of innovation may want to keep the following principles in mind—principles that underscore how we harness innovation at KPMG:
Have a long-term vision and a holistic, enterprise-wide strategy around innovation, with mechanisms in place that allow you to activate rapidly when disruptive opportunities arise.
Build a capability to sense weak signals of change before they turn into major trends. Economic, political, demographic, social and technology issues can emerge quickly and upend the best-laid plans.
Craft an agile business model that regularly rebalances your portfolio of innovative ideas, knowing when to build, buy or ally to implement them.
Redirect your leadership and full organization to make innovation a core skill. Set up processes through which your people can develop as innovators as well as be accountable for their contributions.
Embracing disruption with innovation takes courage. CEOs may be called upon to abandon certain aspects of the company’s heritage, invest in untested ideas and make institutional changes that turn traditional approaches on their heads.
Of the CEOs KPMG surveyed, 76 percent believe their businesses could be disrupted by companies they don’t even think of as threats. Clearly, we need to be proactive about predicting disruption or risk losing valued customers to these invisible competitors. More important, we must be ready to embrace the disruptions that signal exciting, if still unforeseen, opportunities.