SOUTHFIELD, Mich., Sept. 12, 2011 /PRNewswire/ -- While Midwest companies rely on new products and services to drive revenue growth, they still need to establish formal development processes to commercialize their innovations successfully, according to a new survey from Plante Moran, PLLC and NewNorth Center.
The public accounting, tax and consulting firm in conjunction with the executive education and innovation training institute today released the results of their first-ever Innovation Quotient, or IQ, survey. More than 500 senior executives from companies in Michigan, Ohio and Illinois responded to the survey, which was designed to measure innovation – how companies think about it, what drives it, and the roles that process, budget and culture play.
Last week, all survey participants received a customized report benchmarking their organization's Innovation Quotient against best-in-class practices. A webinar on the survey results will be held Wednesday, Sept. 21. The completed survey results are available by clicking here.
"The IQ survey is the first large-scale examination of innovation in our region, and the results establish a benchmark for the role innovation plays within business," said Gordon Krater, Plante Moran managing partner. "We found positive trends in innovation, but realize that most organizations could benefit from establishing formal development and commercialization processes to encourage a deliberate outcome, rather than leaving it to chance."
Nate Young, president of NewNorth Center, noted: "The IQ survey results were incredibly revealing and insightful. Some of our initial assumptions were affirmed, while others required re-evaluation. We have distilled the results into five key observations that can benefit businesses who are serious about instilling repeatable innovation processes and driving revenue growth as a result of innovation."
The five key observations from the survey are:
- The executive team must embed innovation into their corporate strategy: Seventy-two percent of all respondents said that the executive team must be the primary driver for innovation within the business. That number jumps to 83 percent for companies with revenues greater than $100 million. The results demonstrate that these companies recognize the value innovation holds for their ultimate success in the marketplace, particularly as competition grows.
- Patents are only one of many indicators of innovation: While patents have traditionally been the hallmark of innovation, the IQ survey found that they are no longer as strong an indicator of success in generating commercially viable new products and services. In fact, more than 60 percent of survey respondents indicated that they held no patents – and many companies did not pursue them.
- Formal development and commercialization processes are critical: Despite the focus on innovation, only 27 percent of those surveyed said they had a formal process for development. That figure dropped to 20 percent when it comes to commercialization. Only nine percent saw their new products and services as true breakthroughs within their industries or markets. The survey results show that strategy without executive processes will not guarantee innovation success.
- Budgeting for innovation translates into accountability: Companies must also allocate appropriate funds to support the innovation process – even though only 27 percent of survey respondents do. Establishing a dedicated budget for innovation creates greater accountability and allows those tasked with the process to take risks to develop and validate new ideas.
- Rewards are essential: Companies must establish a formal rewards program to support the successful conversion of ideas into commercially viable products and services, yet only 35 percent of respondents have systems designed to motivate innovation. That number jumps to 42 percent in companies with revenues greater than $100 million.
Of the executives who participated in the survey:
- 36 percent were from manufacturing
- 11 percent were from financial institutions
- 50 percent of the businesses had annual revenues of less than $10 million
- 19 percent of the businesses had annual revenues more than $100 million
"While it's clear that Midwest executives understand and embrace the importance of innovation, their businesses have not yet fully committed the talent or resources necessary to embed innovation into their corporate cultures," Krater said. "The survey identified a number of initiatives that businesses can undertake over the next 12 months in order to improve their 'Innovation Quotient.' "
These steps include:
- Create a formal process to vet new ideas
- Allocate the appropriate talent – manufacturing, operations, marketing and program management, among others
- Focus company resources on commercializing the best ideas
- Create a budget and return on investment objectives
- Create a rewards program
"Our first IQ survey has established the benchmark for innovation in the Midwest," Young said. "NewNorth and Plante Moran are committed to reviewing the status of innovation each year, tracking the progress of our region and identifying trends and best practices for businesses. We firmly believe that the diligent pursuit of commercially viable innovation can help launch a new era of economic viability in our region – and beyond."
NewNorth Center and Plante Moran partnered with numerous co-sponsors in three states to secure survey responses, including the Chicagoland Chamber of Commerce, Cornerstone Chamber of Commerce, Detroit Regional Chamber, European American Chamber of Commerce, Grand Rapids Area Chamber of Commerce, Holland Area Chamber of Commerce, Illinois Manufacturers' Association, Lansing Regional Chamber, Lakeshore Advantage, Ohio Manufacturers' Association, The Right Place, PolymerOhio, Inc., Southwest Michigan First, TechSolve and the Traverse City Area Chamber of Commerce.
The Innovation Quotient is designed as an ongoing, annual study that will help determine innovative practices and benchmark the importance of, and capabilities in, innovation in the Midwest. Plante Moran and NewNorth plan to conduct the survey again in 2012.
ABOUT NEWNORTH CENTER
NewNorth Center is a nonprofit, hybrid education and business institution. The Center specializes in innovation assessment, immersive skills training, research, executive education, workshops, seminars and an annual Design in Business Summit. The Center's portfolio features design-centric, post-graduate business programs formulated expressly to bring increased value to local, regional and national companies and organizations. For more information, visit www.newnorthcenter.org.
About Plante Moran, PLLC
Plante Moran is among the nation's largest accounting, tax and consulting firms and provides a full line of services to organizations in the following industries: manufacturing & distribution, financial institutions, service, health care, private equity, public sector and real estate and construction. Plante Moran has a staff of more than 1,600 professionals in 21 offices throughout Michigan, Ohio, and Illinois with international offices in Shanghai, China; Monterrey, Mexico; and Mumbai, India. Plante Moran has been recognized by a number of organizations, including FORTUNE magazine, as one of the country's best places to work. For more information visit plantemoran.com.
SOURCE Plante Moran