Innovation teams are on a journey to an uncertain destination. Here鈥檚 how to write a new flight plan.
A plane without a destination. That鈥檚 the state of innovation today, according to our latest 鈥淏enchmarking Innovation Impact鈥� report, which draws on data from survey responses and in-depth interviews with senior leaders across a range of industries.
Many companies still find themselves stuck in the 鈥渇ire alarm鈥� mode that consumed many organizations over the past three years as they responded to times of unprecedented change: pandemic, supply chain, labor, inflation, and more. In other words, they鈥檙e prioritizing efficiency, reliability, safety, and profitability over finding new destinations, customers, and amenities.
So, how can you unlock innovation again and set up your teams for success? What capabilities do you need to focus on? And how do you identify your biggest challenges and enablers? Our comprehensive new report, developed in collaboration with research group InnoLead, answers those key questions and much more.聽
For this report, we聽surveyed 216 professionals working in innovation, research and development, and strategy roles. The high-level goal was to answer two key questions:
As we detail in the report, we found that innovation thrives when there鈥檚 a clear vision, quantifiable metrics and outcomes, a culture that can make decisions and allot resources without getting embroiled in politics and turf wars, and strong relationships throughout the organization.
But (and it鈥檚 a big one): We also found that innovation looks a little different now than it did just three turbulent years ago. The changes aren鈥檛 inherently good or bad, but they do make flying the innovation plane more challenging. Here鈥檚 a look at the top three.
Teams are spending less time on transformational innovation鈥攐nly 18 percent say they鈥檙e doing it versus 26 percent in 2019. Instead, they鈥檙e focusing on incremental advances (such as improvements to existing products) and adjacent work, such as creating new products and services that are built on the foundations of existing offerings.
Why the shift? It鈥檚 that fire alarm mentality again. Economic headwinds, staffing challenges, and lingering supply chain disruptions have created uncertainty鈥攁nd what can start to feel like a permanently risk-averse environment.
The opportunity:聽It鈥檚 important that innovation teams understand the mix of activities that enables them to meet overall growth objectives鈥攂oth iterative and transformational. That means ensuring the innovation pipeline is robust and placing smart bets on the future in areas like mapping emerging customer preferences, identifying new technologies that could be important in the years ahead, and understanding market changes.
The percentage of respondents who say their dedicated innovation space is used once per month or less.
The pandemic forever changed how innovation teams work together. Just 6 percent of teams work out of a physical space full-time, even though 57 percent say their company has a dedicated innovation center. Most teams, 81 percent, are using a hybrid model, while 13 percent are innovating in a fully virtual environment.
How鈥檚 it working? Eh. Fifteen percent of respondents say productivity has decreased compared to prepandemic levels. And while 41 percent say it鈥檚 about the same and 43 percent say their teams are more productive, it鈥檚 important to consider the opportunity costs.
It鈥檚 easier to innovate incrementally in a virtual environment, and with more than a third of physical spaces being used less than once a month, might this be another reason why less transformational change is happening?
At the very least, it鈥檚 likely a contributing factor. Survey respondents noted a 鈥渓oss of creativity鈥� from too many structured meetings, fewer opportunities for spontaneous interactions, and鈥攏ot a small issue鈥攍ess access to senior leadership.
The opportunity:聽Similar to physical office space and in-person interactions, setting up a cadence of activities and gatherings that can cross functional silos is key, as is bringing in executive leadership and even outside experts. This can create interactions, innovative 鈥渟parks,鈥� and even prototypes that likely would not emerge from virtual meetings.
The two activities we found innovation and R&D groups to be most commonly offering to their colleagues were innovation training, and internal idea challenges.
Excerpt from the 乐鱼(Leyu)体育官网 and InnoLead report, "Benchmarking Innovation Impact 2023."
When we asked what has been enabling innovation success, the top answer鈥攆rom 53 percent of survey respondents鈥攚as leadership support. That鈥檚 down significantly from 2020, when 75 percent of respondents said support from above was contributing to their successes.
What鈥檚 more, when we asked survey respondents to pinpoint their top challenges, more than 24 percent of them cited a full-on聽lack of聽executive support鈥攗p from 19 percent in 2020.
Let鈥檚 look at some other top challenges:
35.8%
Internal politics and alignment
32.9%
Cultural issues
32.9%
Inability to act on business signals and moments
32.4%
Lack of budget
25.4%
Lack of strategy and vision
Survey respondents also said getting senior leadership excited about the innovation vision is the number one key to unlocking more resources, both human and financial, beating traditional levers like incremental revenue generation, competitive pressures, and demonstrated cost savings.
The message is clear: Innovation teams are increasingly working in silos, and they recognize the critical need to have more organizational support. It鈥檚 been a domino effect, not unlike how flight cancellations ripple across the country: The pandemic and the subsequent global and economic challenges have changed how we work, which has reduced visibility with leadership. This has made deep collaboration more challenging and transformational change less of a priority.
The opportunity:聽For innovation teams, this is a critical moment. As always, they must continuously evaluate innovation, R&D, and new product pipelines with a clear eye. But equally important, they need to understand what鈥檚 delivering value, what鈥檚 sucking up time and money, and what opportunities they鈥檙e missing. They must then be deliberate about garnering support up, down, and across the organization. Planes don鈥檛 take off without air traffic control and a ground crew too.
But here鈥檚 the beauty of both airplanes and innovation teams: Neither can fly backward. The innovation team鈥檚 work does, inevitably, move the organization forward. It鈥檚 really a matter of ensuring they鈥檙e going in the right direction.
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