Why Business Leaders Continue To Struggle With Innovation

19 April, 2017 / Articles
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Britain’s “productivity problem” is a subject of almost constant debate. But just as important is innovation – which, like the issue of economic efficiency, has proven largely resistant to solutions from even the best minds. It is a perplexing situation that is only made more so by a report published today by consulting, technology and innovation firm PA Consulting Group. Frazer Bennett, the organization’s chief innovation officer, spoke of “a sense of frustration” about “how little had changed” since PA’s last report on the issue, which I covered in this post.

That report provided plenty of pointers for how enterprises of all sorts could learn from the leaders and so improve their chances of success in a turbulent world. In the year or so since that advice was offered the world has – if anything – become more unpredictable and the U.K. Government, in particular, is stressing the importance of innovation. And yet the statistics culled from PA’s survey of more than 800 business leaders remain disconcerting.

  • Two-thirds of organizations say that innovation is crucial to survival, yet fewer than a third say they are innovating successfully to drive growth and increase revenue.
  • More than three-fifths of senior executives feel that CEOs are not leading from the front and lack the vision and passion needed to make innovation happen.
  • Only a quarter of U.K. organizations say their boards put a priority on innovation.
  • Two-fifths of U.K. leaders reject disruptive ideas for fear of failure.

PA’s Innovation Matters report points out that this year marks the twentieth anniversary of the publication of Clayton Christensen’s The Innovator’s Dilemma, a book that the firm describes as “the most seminal contribution to the study of innovation”. At the time the internet was still in its infancy, the dotcom boom was gathering pace and the sort of communication technologies we now take for granted did not exist. While pointing out that technologies have facilitated innovation, PA says that they are not the whole story. “Companies are redefining what they do, and change is taking place so fast that established organizations suddenly find they exist in entirely new industries,” the firm’s chief executive, Alan Middleton, writes in the report, before asking rhetorically whether businesses like Amazon and Apple are in devices, infrastructure, entertainment, payments or whatever. “Boundaries are blurring,” he adds, “And many organizations feel less in control of their destiny than ever before.”

The past year has seen many changes in society, business and technology, all of which provide opportunities for fresh innovation, says PA. The problem is that there has not been sufficient improvement in the “skill and will to innovate” in most organizations. “The inconvenient truth is that, despite the power of new technologies, and the ability of innovation to unlock new growth opportunities, too many organizations are missing out,” says Middleton.

Nevertheless, PA refuses to be downhearted. Bennett says “the good news is that there are clearly identifiable steps for success, a set of tried and tested behaviors which are consistently displayed by those organizations who do succeed at innovation.” Insights gathered from the research, along with opinion formed through the firm’s work, have been combined into four key characteristics of “innovation leaders.” These are:

Focus on the future. Leading organizations believe they can deploy technology to meet customer needs and excel at measuring the business case for innovation.

Design for innovation. They measure the value of innovation and take new products and services to market faster than rivals.

Create an innovation culture. These enterprises kill off “zombie” projects earlier than their less successful peers and reward employees for innovation.

Build a network for innovation. Leading innovators are happy to look outside the organization for ideas (and do not feel as if they have to do everything themselves). They also have executive and leadership teams with a diverse range of skills and professional backgrounds.

As ever, this is a matter of leadership. In particular, as PA’s “Framework for Innovation” (pictured above), indicates, it requires “a clear purpose statement, quantifiable goals and a strategy for engaging the organization.” U.K. businesses may reject the characterization of them by the international trade secretary Liam Fox in private remarks in the wake of the Brexit vote. But there is clearly a challenge for them to meet if the country is to prosper in the uncertain times ahead, and innovation has to play a key part in that. It will be interesting to see what kind of report comes back from PA in a year or so’s time.

The science man and innovator, Fernando Fischmann, founder of Crystal Lagoons, recommends this article.

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