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Survey reveals traits of innovative companies
Businesses that make a deliberate choice to establish and support innovation can reap a significant payoff for their efforts, according to results of the second annual Innovation Quotient survey just released by Plante Moran and New North Center in Holland.
Plante Moran, a public accounting, tax and consulting firm, and New North, an executive and innovation training institute, launched the IQ survey last year, involving 500 companies across Michigan, Ohio and Illinois. This year, the survey reflects input from 550 companies.
Previous studies have shown a connection between innovation and revenue growth, but the IQ survey report released Sept. 10 goes one step further and turns the results into what Plante Moran calls “a valuable self-improvement guide for the leaders of businesses, not-for-profits and public sector organizations.”
“On average, survey respondents said they generated 16 percent of their revenue from new products or services introduced in the last three years,” said Jeff Mengel, a Plante Moran partner who specializes in manufacturing and distribution and led the IQ survey report team. “Those who achieve superstar status have innovation-hungry cultures we can all learn from.”
One group identified by the survey are “accidental innovators” who dabble with innovation when a unique idea hits and have “a champion that drags the idea on to commercialization,” according to Plante Moran. That group is able to generate 11.1 percent of revenue from new products or services, and typically initiate new products, services or processes in response to comments from customers and constituents or a need to improve quality, rather than from a culture of innovation.
“Disciplined innovators” establish systems such as cross-functional work teams, budgets, work plans and inclusion of innovation in the strategic plan. Their innovation ideas are more likely to be driven by strategy, entering new markets and increasing operational flexibility and capacity. The disciplined innovators generated 15 percent of revenue from new products in the past three years.
“Top innovators” generated 21 percent of their revenue from products or services that were introduced in the last three years, according to the survey team. They embody innovation throughout the organization, starting with corporate strategy, and they had more registered innovation (trademarks, copyrights and patents) and types of innovation (product, process, and systems).
“Superstar innovators” make up an elite tier that adopts deliberate innovation practices, budgets for innovation to meet strategy goals, and publicly rewards people for ideas that emerge. This select group innovates in all methods — process, product and service — with new products/services in the last three years that accounted for 23.3 percent of their revenue.
This year’s survey reached financial, manufacturing, government, education and not-for-profit institutions. Individual respondents included the global sustainability director at Steelcase and the executive director of the Cystic Fibrosis Foundation, Greater Illinois Regional Chapter, both of whom talked about using innovation to fulfill the missions of their organizations.
Other responses included:
- The presidents of two Indiana banks discussed the importance of sharing ideas and the need for better products from their software vendors.
- The CEO of a senior care provider with locations in Michigan and Illinois spoke about the inevitability of change in health care.
- An innovation trainer from Cincinnati explained the importance of a process that includes rules for when to abandon an idea.
To see the complete survey results, go to www.innovationquotientsurvey.com. A webinar on the survey results will be held Sept. 21.
This year’s IQ collaborators include Chicagoland Chamber of Commerce, Columbus Chamber, Community Bankers Association of Illinois, Cornerstone Chamber of Commerce, Detroit Regional Chamber, European-American Chamber of Commerce, Grand Rapids Area Chamber of Commerce, Greater Elkhart Chamber of Commerce, Holland Area Chamber of Commerce, Illinois Health Care Association, Illinois Manufacturers’ Association, Indiana Bankers Association, Kalamazoo Chamber of Commerce, Lakeshore Advantage, Michigan Community College Association, Michigan Bankers Association, Michigan Council of Women in Technology, Midwest Technology Leaders Conference, Ohio Association of College & University Business Officials, Ohio Health Care Association, Ohio Manufacturers’ Association, PolymerOhio Inc. and The Right Place.