In the midst of the economic downturn a few years back, it seemed a matter of survival that organizations reinvent themselves as innovators and disruptors that can transcend rapidly shifting markets. Now, with the economic heat turned down a bit, they are slipping into their old, change-resistant ways.
That's the conclusion of a new study of 519 top executives, conducted by Accenture, which finds that while organizations continue to talk a good innovation game, few are really ready to overturn their own business models and markets. In fact, many companies are dialing back their expectations on innovation. Instead of the "disruptive" products, services, and business models that were anticipated just a few years ago, "many initiatives have become considerably more limited in scope," Accenture states. "Rather than offering 'the next big thing,' innovations coming to market today are more typically line extensions."
In the survey, 70% ranked innovation among their top five priorities. Six out of ten now even have someone with the title of "chief innovation officer" or comparable position, in contrast to 54% in a similar survey conducted in 2009.
In total, 93% of executives say their companies' long-term fates will be determined by their ability to innovate. However, fewer than one out of five (18%) "believe their own innovation strategy is delivering a competitive advantage." Confidence in innovation, in fact, is lower than it was in the 2009 survey,"when many executives not only saw their companies as capable of innovation, but even as disruptive forces. In 2009, 30% saw themselves in roles as disruptors, this has declined to 26%.
The approach currently pursued by the majority of respondents, 64%, is not transformative in pursuit of totally new products or services but rather can be defined as "renovation"—more limited incremental line extensions, Accenture states. "Confidence that expectations can be met in the future is waning. Fewer than half the present-day respondents believe they have an effective approach to new product development or are seeking innovation effectively."
Some other stats to come out of the survey that point to a fizzling out of the innovative spirit in larger organizations:
- Only one-third, 34%, believe their company has a well-defined innovation strategy.
- Close to half, 46%, say they have become more risk averse in considering new
- Almost half, 45%, see their company "pursuing a portfolio of smaller, safer opportunities rather than seeking the next breakthrough."
Abandoning the innovation spirit "is a potentially perilous strategy," the report's authors warn. "Enterprises that are able to successfully innovate at a breakthrough level can increase the likelihood that they will dominate and prosper in new markets that they create. Enterprises that restrict themselves to incremental innovation, on the other hand, risk unknowingly entering a vicious cycle in which they lag ever farther behind."
Accenture advises that enterprises seeking to boost innovation -- and results -- need to bake innovation deeper into their corporate culture and processes, as well as take advantage of new tools such as Big Data analytics.
However, maybe it would take another crisis to really put organizations' feet to the fire to get them moving. Ultimately, complacency is the enemy of innovation.
This post was originally published on Smartplanet.com