Companies that excel at innovation share common traits - they make it a priority and get everyone involved
Innovation is fundamental to drive sustainable growth. Yet, according to a new survey by McKinsey, while 70% of business leaders count innovation as among their top three priorities for driving growth, 65% are not confident in their own ability to execute. So what is the secret for success in innovation? Prophet, the global brand consultancy interviewed 150 companies committed to innovation to determine where their common strengths and priorities lie.
Model innovators lead by example and the "do as I say and do" rule: Their executives set aside time to innovate, inspiring and involving others. While 92% view innovation as a team process, 64% make it a priority to provide time and space to allow for the development of new ideas. For example, Google gives its engineers 20% free time to pursue projects they're passionate about. Similarly, IBM has instituted ThinkFridays in its US offices to stimulate thinking.
Model innovators also put their money where their mouths are, offering financial incentives that help foster a culture of innovation. In fact, 60% have built an incentive system that encourages their employees to contribute to innovation efforts. American Express CEO Ken Chenault has established a $50 million innovation fund to support employee ideas for long-term business transformation.
The model innovators see the power of approaching innovation with a cross-functional team. 44% spread responsibilities and involvement across divisions. And the 40% that do centralise innovation responsibilities (compared to 28% of the non-model organizations) ensure their team is drawn from various functions within the organisation.
Similarly, three-quarters of these companies involve vendors and suppliers in their innovation efforts. Nearly two-thirds of this group (versus 21%) involve their customers. For example, Hallmark Cards sees as many as 15 concrete ideas a month emerge from its online customer community of 200 mothers with young children, dubbed "Hallmark Idea Exchange".
Recipe for innovation success
1. Become a catalyst. Inspire and engage others regardless of your role in the organisation.
2. Get and stay connected. An innovation ecosystem has no limits or borders, and should be built on the broadest possible base.
3. Articulate your strategy. Go beyond platitudes and buzzwords to ensure employees believe you and understand how they've been empowered.
4. Encourage teams to execute. An empowered team will see the challenge through to completion with the right tools and incentives.
5. "Test and learn". There's more you don't know than you do, be open to the risk of learning more.
The Making of World-Class Innovators by Prophet interviewed 150 innovators in companies ranging from less than $1 billion to over $10 billion in revenues. Most respondents were based in the US, the rest came from Europe, the Middle East, and Africa. A full copy of the report with case studies from Google, Starwood Hotels, Target and Boeing will be available in the Read section of the website