Study: Innovation Vital, But Many Companies Fall Short
It takes an innovative company to produce innovative products and services. Most executives wouldn’t take issue with that premise, but many of their companies come up short when it comes to practicing what they preach.
The vast majority (95 percent) of Fortune 1000 executives who responded to a recent survey said that enterprise innovation is very or extremely important in driving business growth, profitability and attracting and keeping talent and brand prestige.
But while more than four in five executives (85 percent) believe that enterprise innovation is a prerequisite for product innovation, more than half (60 percent) say their company typically focuses more on product innovation than overall enterprise innovation.
Pollster Harris Interactive told survey respondents to “think of enterprise innovation as transformative business processes, practices, organizational planning and models that enable a business of any size to operate more effectively, profitably, and/or competitively.”
The problem, the survey pointed out, is that most companies have failed to formalize the innovation process. More than half of the executives surveyed (53 percent) said that their company doesn’t focus enough on enterprise innovation. And nearly as many (47 percent) reported that they don’t have any team, processes or system for vetting new ideas to help decide which ones to invest in.
Fewer than four out of ten executives said that their company promotes enterprise innovation by providing funding or access to educational or idea-sharing forums, and only one in three said they have a team specifically dedicated to brainstorming new ideas.
It all begins in the executive suite. The majority of executives said that their CEO plays a critical role in defining and supporting their company’s overall innovation strategy. For innovation to thrive, they said, CEOs must provide greater leadership, tools and financial and non-financial support.
Barriers to enterprise innovation singled out for blame include pressures to achieve short-term goals, other goals taking greater priority and lack of incentives to inspire or reward enterprise innovation.
"The survey findings are a timely reminder to make enterprise innovation core to your leadership agenda," said F. Mark Gumz, president and CEO of Olympus Corporation, sponsor of the survey. "Don't forget that the most important byproduct of Ford's Model T was the assembly line production method, and Edison's light bulb would not have succeeded without the development of an electricity grid that delivered power to homes and businesses. Put differently, inventions – such as product and service creation – also require innovative underpinnings that begin with a corporate culture that accepts risk and reward opportunities and that will radiate through your company."
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