Select findings from our Fortune 1000 research on innovation
Last year, we undertook the largest survey to date on innovation amongst the F1000 in the United States. We discovered some interesting things that we would like to share. For a full copy of the report, please contact us or view the link on our webpage.
Below are 9 key points for you to consider as you advance your organization’s innovation agenda.
- Average at Best: The U.S. is not a leading nation when it comes to innovation. The average innovation scores (innovation health index or IHI) amongst the U.S. F1000 is 68%. Although this score is respectable, it indicates that U.S. F1000 organizations are only marginally innovative, and that there is room for improvement. A score of 68% compares favorably with scores in United Kingdom and Canada, but lags Sweden, Denmark, Switzerland Germany, and Finland.
- Incremental and Random: It is evident that innovation is an emerging functional area within most organizations, and is becoming an increasingly important factor to support sustainable value creation activities. However, the score suggests that most innovation that happens is random.
- Where is the Strategy?: Although many organizations display the intention to be innovative, the majority of companies surveyed do not have an explicit innovation strategy.
- An Innovation Culture Perception Gap: There are gaps in the perception of innovation culture within the C-suite, depending on the position help within the organization. CEO’s and the most senior level executives have a higher perceptions of innovation than do less senior management positions, for example, Director and Senior Manager levels.
- Governance is Missing: Pretty much across the board, the governance for the formal management of innovation is largely underdeveloped. This involves systems and tools to support innovation, and is also evident in management control and performance management systems where performance metrics for innovation are either lacking or non-existent, and compensation and incentive structures misaligned.
- Don’t Blame the Employees: Creativity and empowerment levels of employees are not barriers to innovation in organizations. These drivers scored amongst the highest of the twelve measured. Alternatively, the leadership for innovation and organizational design and execution frameworks are impairing progress of innovation systems in organizations. This is where the largest gaps were found.
- Creating Knowledge is not Enough: There was a noticeable gap between organizations’ ability to generate knowledge and organizations’ ability to disseminate knowledge. This gap is inhibiting employees and managers’ ability to leverage knowledge into value enhancing innovations in products, processes and business models.
- Executives are Optimistic: Notwithstanding recent global economic and political turmoil, executives are generally optimistic about the future. Eighty percent of executives responded that they were somewhat or very optimistic about their organization’s future over the next two years.
- Companies that Fail to Innovate will Struggle Even More: Amongst F1000 companies alone, differences in the innovation health indexes (IHIs) range up to 7% between those that are in the top 10% of their industry and all others. When compared to the bottom 50% of performers, the gap is even wider, up to 22%. Simply put, companies that fail to innovate on a consistent basis may not create the value to remain competitive, and as a result may not survive over the long term.