As companies turn to innovation and disruptive technologies to stay relevant, a survey of 250 Canadian businesses suggests that this awareness may not be turning into effective action.
Innovation: from Ideation to Activation, a new report from Ernst and Young, reports that 93 percent of executives admit that innovation is either important or very important to their growth. But 70 percent say they don’t separate their innovation strategy from their larger business strategy.
“Traditionally, companies have relied on R&D departments, but great ideas are also coming from employees, customers, and partnerships with other organizations—even competitors.”
According to the report, being an “ambidextrous” company that exploits its existing capabilities while exploring new growth opportunities is the key to success. “Organizations with ambidextrous capabilities typically view capital projects, product development, and operations maintenance as the most important areas for innovation. They’re also more apt to have a partially defined, but not separate, innovation strategy,” said the report. “Conversely, those without these capabilities largely view operations and maintenance as most important, and they do not have a defined or separated strategy.”
Lance Mortlock, EY’s national strategy services leader, said that businesses can’t afford to miss out on innovation during a time when most major industries are being disrupted. “There are a wide range of reasons to look to innovation as a way to improve and grow a business,” he said. “From increasing profits or environmental performance, reducing costs, to increasing process efficiency, each sector has unique reasons about why and with whom they innovate,”
To alleviate the issues inhibiting innovation, it is recommended that companies agree on the most appropriate approach to innovation, a portfolio strategy for to ensure a consistent pipeline of ideas, support a culture of innovation within the organization, and find ways to measure return on investments in innovation.
“There needs to be a shift in where ideas are coming from,” said Mortlock. “Traditionally, companies have relied on R&D departments, but great ideas are also coming from employees, customers partnerships with other organizations—even competitors.”
Check out the full report here.