Global Innovation Barometer–2013: Unconventional Strategy Unlocks New Drivers for Innovation– Pushing Comfort Zones…

Innovation rules are changing, globally, and companies must reinvent their strategy in order to stay competitive, drive growth and contribute meaningfully to the economy… For innovation to flourish, you must embrace a new innovation paradigm that promotes collaboration between all players– big, small, public, and private– fosters creativity, and emphasizes solutions that meet local needs…

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One-in-three business leaders are concerned over their ability to maintain a competitive edge in a faster paced, more global and resource-constrained environment. There is increasing anxiety over– what, how, when… to innovate as competition accelerates…

Business executives continue to value innovation as a strategic priority; An emerging ‘innovation vertigo’– an uneasiness with the changing dynamics of today’s business landscape and uncertainty over the best path forward– is challenging leaders to think differently about how they can achieve growth.

Many executives, however, seem to be embracing this complexity by exploring new and sometimes unexpected opportunities to innovate… According to Beth Comstock, General Electric (GE); business change has become constant and leaders are responding by betting big on more unconventional approaches to innovation to unlock growth… exploring different markets, partnership structures and business models – all in the pursuit of uncovering new ways to better serve customers... The key points in the ‘Global Innovation Barometer Report, 2013’ are:

  • Protectionist Policies.
  • Business Model Innovation.
  • Collaborative Innovation.
  • Government Policies.
  • Workforce Preparedness.

The Global Innovation Barometer Report, 2013: Now in its third year, the survey is commissioned by General Electric (GE) and conducted by StrategyOne. It includes interviews with more than 3,000 executives in 25 countries and explored the issues of how business leaders around the world view innovation and how those perceptions are influencing business strategies in an increasingly complex and global environment… It examines what factors business believe to be drivers and deterrents of innovation and analyzes specific approaches and policies that enable innovation and drive growth. A top line summary:

  • Protectionist Policies: Many  executives appear torn about how to best respond to the changing business environment. In efforts to mitigate perceived risks to their business and local economies, many are responding by adopting protectionist tendencies; 71% of executives reported that their government should prioritize promotion of domestic innovation rather than imported, while 71% reported that their governments should actually open markets further and promote imported innovation and investment. Paradoxically, there was a 53% overlap between these two opposing views. Executives in Mexico (80%), India (56%) and Brazil (50%) were most likely to advocate both open and closed market policies as a means to better innovation. 
  • Business Model Innovation: While incremental and product innovation have, historically, been main drivers of growth for companies; business model innovation is gaining momentum as a route to success. Innovation of a new business model may offer business a less risky and resource-intense path to better understand and reach customers over traditional methods…
  • Collaboration Innovation: Collaboration between businesses is emerging as a means to surpass competitors and generate revenue, particularly in emerging markets. However, despite the global acknowledgement of the power of partnerships; the lack of effective IP protection, trust, talent poaching– pose important barriers to action…
  • Government Policies: Global business leaders are concerned with policies affecting innovation and calling policymakers to create more stable, supportive policies to help enable better innovation in markets and across borders. Business executives perceive safeguarding the business interests– knowledge, IP, talent, removing policy barriers, over-regulation… as key to allowing innovation to flourish…
  • Workforce Preparation: Talent is consistently identified as a critical concern for innovation leaders across the globe; as the creativity and technical prowess of workforce is seen as key to unlocking innovation potential. Concerns about workforce preparedness (i.e., education…) and access to talent (i.e., cross-border mobility, retention, poaching…) abound, as companies are seeking to match the right job with the right people and line up the right skill sets to meet tomorrow’s economic needs, today…

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In the article Innovation Barometer: How Collaboration Breeds Advantage by Ideas Lab Staff writes: The smaller the world becomes; the greater are the possibilities for growth and collaboration… Those most experienced at partnership are among the most successful: Germany, China, Brazil and Sweden. Where 87% of the more than 3,000 executives, in the survey, were confident that their firms could be more innovative and successful if they collaborated or partnered with other businesses…

The reasons to collaborate are clear: accessing new technologies and new markets: Executives in China (41%), South Africa (38%) and Mexico (37%) expect to report revenue and profit from their partnerships and continued growth…

The biggest dissuaders are lack of confidentiality-intellectual property (IP) (64%), trust (47%) and a fear of having their talent poached (45%)… Talent has been consistently identified as a critical concern for innovation leaders and fears of having trained, skillful and successfully innovative staff leave are a serious deterrent for more innovation and collaboration.

At the same time, 41% of the business leaders surveyed said they believe restrictions on access to foreign talent are increasing and those restrictions negatively impact businesses’ ability to innovate…

In the article Barriers To Innovation, And How To Break Through by Janie Curtis writes: One of the interesting statistics of this study was that over 50% of U.S. executives believe that new innovation models or processes are needed in order to accelerate the rate of introduction of market-changing ideas. However, I would make the observation that innovation processes in many Fortune 500 companies are thorough, but perhaps not exactly inspiring. When it comes to steps within the process and checks and balances that are in place to make sure that sub-standard ideas don’t move forward, there is a great deal of rigor.

However, there is often a lack of rigor around the need to engender a level of inspiration and creativity that would enable members of the innovation team to launch new products, which are more than tweaked facsimiles on what is already on the market. Frequently, the idea-generation part of the process doesn’t go beyond getting a group of smart people in the room with a pad and starting to put ideas up on the wall.

This can work very well for generating those marginal adjustments on the existing category reality, but often does not provide enough fodder for real leaps of imagination. Still another interesting barrier to innovation can be the– oh so popular ‘consumer insight’… don’t think that the person who first invented bottled water, went to the consumer and asked whether they would like their tap water in plastic bottles so that they could pay a dollar or two for the privilege…

Marketers-innovators in medium-to-large companies have come to a point where they don’t dare to trust their own instincts anymore; if the research doesn’t say it is a good idea, it isn’t a good idea. However, experience would indicate that in order to keep the door-open to paradigm changing innovation ideas, you must marry the need of process rigor with the ability to make the occasional leap of faith.

Still another barrier to significant innovation can be a weak brand or positioning strategy. We have all heard how difficult it is these days to come up with an insight that leads to the ownership of a consumer benefit that is truly different from the competition. This seems to have become the case; whether benefits are very direct and rational (e.g., better performance…), or more on the emotional end of the spectrum (e.g., improving quality of people’s lives…).

It has undoubtedly become harder, but luckily– not impossible: If the strategy behind brand represents real market differentiation, and consumer inspiration and relevance… then, the chances of the innovation ideas that emanate from it; will be revolutionary, and increase dramatically…

Efficiency versus Innovation: According to Rowan Gibson; when the economic barometer is pointing upward, all the talk in company boardrooms is about growth, innovation and value creation. When the global economy lingers in the doldrums, corporate strategy shifts inexorably back to the safe haven of operational efficiency.

Now you might argue that this reaction is both inevitable and understandable, and I would accept that at some level. But remember this: something far deeper and more significant than these periodic upswings and downswings is the fact that we are now in a new kind of economic era. An era in which fanatical cost-cutting, downsizing, lean Six-Sigma, mergers-acquisitions, supply chain management, off shoring or outsourcing are no longer the basis for competitive advantage.

Companies all over the world are becoming increasingly worried about their ability to innovate and compete in the fast-changing technology world… However, one person’s alarm can be another one’s opportunity.

Many executives seem to be embracing the new complexity by exploring new and sometimes unexpected ways to innovate. For example, a growing number of respondents, 52%, believe that development of new business models will contribute the most to their company’s future performance. Some 87% were confident that their firm could be more successful at innovating through partnership and collaboration, and 68% of respondents report already having developed or improved a product in partnership with others.

Other companies are moving beyond product and incremental innovation to developing innovative business plans that offer a less risky and resource-intense way to open new markets… It seems that business leaders, globally, are being pushed outside their comfort zones with an uneasiness about the pace of change and confusion over best path forward…

The feel of ‘vertigo’ can go beyond the usual symptoms of light-headedness and dizziness and is possibly far more than a chronic lack of solutions, which begins to creep into their psyche as their worlds are spinning out of their control… the whole economic system is still out of balance, and according to the survey; having ‘innovation vertigo’ may be part of a bigger malaise...