Specifically, the research revealed there is a lack of process, resources and a significant tolerance of risk from the highest levels of corporate leadership.
Innovation is highly valued, but the process is illusive
The study found that while executives believe that innovation is necessary for their organization's continued success and growth, few have a process in place to foster innovation. An overwhelming majority (93 percent) of executives surveyed agree that innovation is important to their organization, yet still 15 percent of executives hope that it will occur organically.
"It may seem counterintuitive, but you must have a process or approach to innovation – it won't happen magically," said Niemiec. "We believe it must start with the desirability of the solution, which we uncover through a methodical approach to research. Technical feasibility and business viability will follow."
Less than half of those surveyed (48 percent) have a dedicated innovation process in place. One third reported that while innovation is encouraged, there is no formal process in place.
Furthermore, strategy is perceived to have the strongest impact on a company's ability to innovate. More than three-quarters of the respondents (76 percent) believe a clear business strategy has a strong impact on a company's ability to be innovative.
Discrepancy in resources & investments
The study also found that the majority (68 percent) of leaders believe that the ability to implement an idea is one of the most important determinants of a company's ability to succeed at innovation, but there is a disconnect when it comes to investing in this capability. Roughly half of the leaders surveyed reported their top two concerns were their company's abilities to keep up with rapid technological advancements (47 percent) and to allocate proper talent to drive innovation (49 percent), yet few look externally to add expertise, talent and resources. Among the leaders surveyed, only 38 percent form strategic partnerships with others in the industry, 33 percent increase capabilities through acquisitions or mergers, and 16 percent engage with external consulting firms.
"This disparity demonstrates the critical need for open innovation," said Niemiec. "In our experience, innovative leaders embrace emerging technologies, excellence in design and are a student of new business models that exist beyond their own industries."
Tolerance for Risk
About half of the respondents believe that a culture of risk taking is important to foster innovation in the company, but the tolerance for risk varies widely. A little more than half of respondents (56 percent) reported that they will occasionally pursue ideas they believe have long-term potential even if the immediate business case is not clear. Of executives surveyed, 37 percent reported their companies only support ideas that have a viable pathway to commercialization. Only 7 percent expressed that their company invests in exciting ideas regardless of their viability.
"A culture of innovation needs to be evident in action, not just word and policy," said Niemiec. "People need to feel supported in order to experiment and take a risk. The teams that are successful in innovation have developed a culture that embraces this mindset."
The survey conducted in March 2016, collected responses from 200 senior executives who have a vice president or higher job title at an organization with an annual revenue of $500 million, to uncover the role of the C-Suite in driving innovation in their companies. A sample size of 200 has a margin of error of about plus or minus 6.9 percent.
Twisthink is a product innovation and business strategy consultancy that delivers game-changing technology solutions to bring new value to its clients. Through its technical expertise combined with a human-centered design approach, it gives life to unimagined possibilities for clients across automotive, medical, industrial manufacturing, consumer products and beyond. For more information about Twisthink, visit www.twisthink.com.
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