Books
The recent economic climate has underscored the challenges of innovation initiatives. On the one hand, innovation budgets have taken significant hits as a result of cost-cutting measures. On the other hand, global financial markets have reduced the value of any company without the capability to grow.
How are companies caught in this crossfire responding? To find out, we conducted a survey over the past few months with 65 senior executives from diverse industries around the world. We asked how they were investing in innovation and what returns they expected. More importantly, we asked what kept them up at night.
Fully 100 percent of all the executives surveyed cite growth as the goal for innovation. However, not all said they are employing the same innovation strategies. Some are exercising caution, trying to survive the tough times while searching for growth opportunities. Yet a large number—more than half—are actively investing in growth and looking for returns in the next one to three years. Interestingly, companies in both camps are putting new emphasis on business model innovation to complement technology product innovation.
What is causing the greatest concern among executives? Nearly 30 percent of respondents said their key issue is strategy: Is the innovation strategy they had developed the right one for the company’s business goals? Is it able to prevent the competition from blindsiding them with an unexpected innovation? Fully 60 percent of our respondents said the key issue is execution—ensuring innovation strategies deliver the desired business results. These executives are afraid that execution may fall short, resulting in disappointing financial performance when their innovations reach commercialization.
Bottom line: Some executives are feeling bullish on innovation strategies for growth but bearish on their ability to execute. Others worry that their strategies may not be right. But all executives are working on getting the linkage right between strategy and execution.
