Two thirds (66%) of global organizations say innovation is crucial to survival—yet only 28% are innovating successfully to drive growth and increase revenue, according to new research. In the U.S.—by far the global leader in R&D spend, accounting for some 30% of all spending worldwide on innovation—American companies were just about average among countries surveyed in terms of those that felt innovation efforts were producing results, reports a new study from consulting and innovation tech firm PA Consulting Group.
In fact, more than half of companies in the U.S. surveyed in this study (58%) say innovation efforts have not been successful in helping them achieve growth, with nearly the same number (55%) saying innovation had not helped achieve profitability either, according to the findings of the annual global innovation survey, Innovation Matters, in which 821 senior executives participated.
This skeptical view of return on investment in innovation is spurring anticipation by U.S. companies that change is coming and quickly. In fact, according to the survey, when asked what changes their company had taken over the past three years and what change they foresee taking over the next three years, 57% of respondents said the biggest was their approach to innovation—the number one issue identified. Additionally, 38% of respondents—the top response—said they see innovation change in their company ramping up quickly.
Comparing innovation leaders with those less successful
“You have many companies in the U.S. that are highly innovative and are highly successful as a result,” said Peter Siggins, U.S. region head for PA Consulting, in a news release. “However, there is a constant competitive threat for these companies and to stay in the race, they cannot stand still when it comes to sustained innovation.”
Learn from the leaders
The global innovation leaders in the PA Consulting global innovation survey point to a clear pathway for achieving innovation success. The research shows that successful innovators are more likely to:
- Focus on the future—believe their organization can deploy technology to meet customer needs (59% versus 49% of less successful peers) and excel at measuring the business case for innovation (57% versus 41%).
- Design for innovation—measure the value of innovation (61% versus 47%) and take new products and services to the market faster (61% versus 42%).
- Create an innovation culture—kill off ‘zombie’ projects earlier than their less successful peers (54% versus 40%) and reward employees for innovation (81% versus 69%).
- Build a network for innovation—source ideas for innovation from outside the organization (61% versus 52%) and have executive and leadership teams with a diverse range of skills and professional backgrounds (78% versus 66%).
“On a global scale, the companies that are most successful at innovation build it into the very fabric of their organization, use agile techniques across the business, and learn from their mistakes and successes,” said Hsiu Mei Wong, one of the authors of the innovation report and a Business Design expert at PA Consulting, in the release. “In the U.S., it’s evident that companies realize not only that innovation is critical to their survival, but that current approaches have not produced the return they desire. As a result, change is ramping up in these companies and quickly. We anticípate a significant re-directed effort regarding innovation from U.S. companies in the months ahead, which will set them up for future success in the long-term.”
The research was conducted by Longitude Research on behalf of PA Consulting in late 2016. The survey questioned 821 senior business leaders. Half were C-level, with the others comprising of a mix of senior vice president, board and director level positions. Respondents were based in Central Europe (30%), the USA (20%), UK and Ireland (19%), the Nordics (19%), Mexico (6%) and the Gulf Corporation Council states (6%).