Believe it or not, this isn’t the only innovation website out there, and I’m not the only innovation consultant in the world.
Shocking news, I know
There are some excellent other authors out there on the subject, and occasionally they will release something so insightful that it is my duty to let you know about it and suggest you check it out.
And recently, Paul Hobcraft along with Hype innovation released an analysis of several reports on innovation produced by a number of the world’s leading consulting firms in the late months of 2015 and early 2016, who in turn got it from their close connections with executives at the world’s largest companies.
It’s called “Seeking Change from Innovation in 2016“, is free and I would recommend anyone interested in the subject to download it (registration required).
The report has a wealth of data and trends sourced from the various reports on how the world’s largest companies are approaching innovation, where they see their strengths and weaknesses as being and where they see themselves investing in the future.
Summary reports like these are extremely useful for anyone interested in innovation, but who don’t have the time to research hundreds of pages of reports and studies, like Paul and I do as part of our profession.
Below, I have pulled out a number of what I feel are the most pertinent insights from the various reports, split by the company which released them.
Corporate Longevity: Turbulence Ahead
S&P 500 companies 50%
- Focus is on the turbulence ahead for large companies
- 50% of all companies in S&P500 expected to be replaced in the next 10 years
- 2/3 of companies agree or strongly agree that they had a need to transform, but only 37% were confident that they could achieve this within 5-10 years
- The two biggest obstacles to transforming the business in response to disruption were “Day to day decisions undermine the change strategy” (40%) and a “Lack of coherent vision for the future” (24%)
- The biggest success factor required for transformation projects was leadership vision and commitment (58%)
U.S Innovation Survey Clear Vision, Cloudy Execution
Miss opportunities to exploit the market 72%
- Conversely, this report suggests that companies are generally satisfied with the success of their innovation areas, usually saying that they are either Satisfied or Very Satisfied more than 80% of the time for various questions (Nick’s note: this to me seems like a clear example of executives being out of touch with being able to convey the actual results of these projects)
- Also shows that companies appear to feel more pessimistic about their success rates compared to 2012. For example, 72% of companies admit they miss opportunities to exploit under-developed markets (previously 53%), 60% say they don’t learn from past mistakes (vs 36%) and 67% say they are not more risk averse (vs 46%).
- Most companies also don’t have the ability to distinguish between incremental innovations and more breakthrough innovations.
- Lower risk / incremental strategies like increasing market share and adding new value to existing products is also more of a priority than more disruptive activity like changing business models or introducing new product categories.
Radical Innovation and Growth- Global Board Survey 2016 (Deloitte Denmark)
Patterns Of Disruption- Anticipating disruptive strategies from Nine Patterns
- Growth targets for majority of companies are mixed, with just over half of companies predicting 10% or less, 21% predicting growth of 10-20% and 20% predicting 20%+ growth
- By far the largest two barriers to working with radical innovation were lack of insight and lack of organisational design to handle radical innovation (both around 46%)
- Failure is still avoided at board level, but only 18% of boards say they avoid failure at all costs, with 55% saying they try to learn from it if it happens, and the remainder allowing it to a degree.
- 22% of companies admitted they had a “Division X” with the goal of finding radically new products or services (Nick: higher than I imagined)
- Introduced a new way to think about disruption factors which companies will face, with its Nine Patterns of Disruption (Nick’s note: this is vital insight for anyone interested in innovation, and I will devote a future blog article to it):
- Expand Marketplace reach
- Unlock Adjacent Assets
- Turn Products into Platforms
- Connect Peers
- Distribute product development
- Unbundle Products and Services
- Shorten the Value Chain
- Align Price with Use
- Converge Products
- Each pattern has a series of case studies on how they can affect an entire industry. Often, various combinations of them will affect an established player all at once, such as how cable & satellite TV providers are being affected by Netflix using 6, 7 and 8 (amongst others).
Cap Gemini / Sogeti:
Design to Disrupt Series
- Focused on addressing how new challengers are attacking the established players in the market. They enter the market with a new point of view, evolve it rapidly, find their improved value proposition and then finally re-think the entire category.
- Main recommendation of the report series is that established companies can improve their innovation management capabilities by moving towards the development process used by these startups: DevOps (which Cap Gemini refers to here as digital disruption methods)
- Eventually, they suggest an established company can transform their management model to be an “Antifragile organisation”, utilising skills from Management Innovation, Lean Startup methodologies and DevOps.
- Nick’s note: These reports came across as the weakest, most vague and least supported by evidence out of all of the consultancies. They recommend a wholesale revolution of established management and company culture to be like that of a “startup”, even though there is evidence that as the current darlings of the startup world evolve they go in the opposite direction. Just because you read about “how Google does things” or “how Pixar does things” doesn’t mean that those are the best recommendations for your company, and wholesale change initiatives are prone to failure.
The Most Innovative Companies- Four factors that differentiate leaders
Development times are too long 42%
- Four foundational aspects which are vital for innovation to succeed:
- an emphasis on speed
- well-run (and very often lean) R&D processes
- the use of technological platforms
- the systematic exploration of adjacent markets.
- “Size can give you scale, but for innovation, speed is more critical,” says Rakesh Kapoor, CEO of Reckitt Benckiser.
- 42% of global innovation executives said development times are too long — a 6 percentage point increase over 2014
- The best companies focus as strongly on improving the process of decision-making to offset potential bias as they do on the process of execution
Why and How Businesses are investing in Innovation Centers
Have an innovation centre 38%
- Focus of the report is in describing digital innovation centres, which are teams of people and often physical sites that are set up by organizations in a global tech hub, with the goal of leveraging the ecosystem of startups, venture capitalists, accelerators, vendors, and academic institutions that these hubs provide.
- Four main types of innovation centres were identified, which were:
- in-house innovation labs: The innovation engine for their companies, these centers perform all innovation activities from inception to prototyping using an in-house approach
- university residences: In this model, companies invest to set up a center at a university campus to drive innovation through university researchers
- community anchors: These innovation centers actively identify mentors and provide opportunities to startups to work actively with the company to test the startup’s products
- innovation outposts: Innovation outposts are small teams that are based in
technology hubs, typically Silicon Valley
- Suggests that 38% of top 200 companies have set up innovation centres
Links into the visuals and more in this emerging field.
- The most niche of the reports, based around the concept of intrapreneurship. Nick’s note: Published by the Intrapreneurship conference, this also suggests that the statistics might be slightly biased towards companies already aware of and investing in intrapreneurship, and therefore be higher than the industry reality.
- Success factors include skilled and motivated employees, support from higher management and an entrepreneurial culture.
- Most companies will currently support intrapreneurial initiatives only on a case-by-case basis (42%), but also a large number want to make it a vital part of their innovation strategy
For access to all of the summaries, analysis, underlying data and visualised charts, download the full report: Seeking Change from Innovation in 2016
Thanks to Paul Hobcraft for his excellent analysis and summaries and Hype innovation for publication
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