Innovation investment called lacking
Survey finds large companies talk big but perform little follow-up.
In order for innovation to be more than an impressive word thrown around in quarterly meetings, resources need to be appropriated for it.
That’s the message Bob Niemiec, managing partner at Twisthink, wanted to get across when the Holland-based product innovation and business strategy consultant firm dove into a study to find out how large companies invest in innovation. He said the results were disheartening, if not necessarily surprising.
Of 200 senior executives surveyed at companies with annual revenues of at least $500 million, 93 percent said innovation was important in their organization. Yet just 7 percent reported that their company invests in exciting ideas regardless of their financial viability.
Niemiec said the disparity likely stems from the pressure of serving at the pleasure of a board or other decision-making bodies.
“Culturally, there’s always this issue of fear of failure,” Niemiec said. “For many leaders and organizations, the fear of failure acts as a deterrent to taking a risk with innovation. And I think there’s always the challenge of short-term priorities when you’re in the C-suite and are held accountable of quarterly results.
“Because innovation isn’t something that can be viewed as a quarterly engagement, it can take a lower priority within these companies.”
In fact, according to the study, just 48 percent of those surveyed have a dedicated innovation process in place, and while more than half of respondents believe that risk-taking is important to foster innovation, 37 percent said their companies support only ideas that have a viable pathway to commercialization.
For more than 15 years, Twisthink has helped clients establish a dedicated innovation process. The company walks its clients through testing, failing and learning to fuel creativity and eventually innovation — utilizing a process that focuses not just on stockholders but on primary-end customers and prioritizes “human-centered design” that tackles problems by focusing on the human perspective at every step.
Neimiec said Twisthink looks at human-centered design through three lenses: technical feasibility, business viability, and desirability and usability. The challenge is getting companies to look through all three lenses, as well.
“Most organizations, simply by default, start and end with business viability,” he said. “It’s all very much financially driven, with an appropriate amount of technical feasibility support. We serve clients across the globe, and rarely do we see them leading with desirability and usability.”
Niemiec said the first step in the process of grooming for innovation is understanding that in today’s business environment, just about anything can be created. As the technical feasibility of products and ideas becomes less of a roadblock with new technologies, the primary hurdles become a lack of focus, priority and process.
“There’s more work to be done,” Niemiec said. “There are more folks out there that could benefit from a proven process, open innovation, and who need to be led in this journey of testing, failing, learning and creating.
“Because innovation can really be leveraged if it’s given the resources to do so. Resigning yourself to just operating as a commodity company, manufacturer or service provider doesn’t have a great long-term outcome.”