Economist Intelligence Unit: Innovation Report

In a recent article in the Economist, “Innovation: Transforming the way Businesses Create”, a report on global innovation research conducted by the Economist Intelligence a pattern for the need for organization systematic approaches to innovation emerges.

First of all, the research showed that of the 485 international companies surveyed 87% stated innovation was important or critically important to their business’ long-term success. The survey also found that in companies where innovation is viewed as critically important to company success 46% state they are performing better than their peers.

A question then of these companies is “How many of these companies have a sustainable, systematic innovation organization and process? “ In total 46% of those surveyed they set up dedicated teams who were not distracted by current business activities. This is a high number given the difficulty of shifting resources from existing business or projects to new projects. But is does show that successful innovation companies do make such changes.

In Geoffery Moore’s 2004 Harvard Business Review article “Darwin and the Demon: Innovating Within Established Enterprises” he highlights the need to “deconstruct” non-performing business areas and shift those resources to new high potential projects. This reapplication of critical resources enables an organization to form necessary teams to take on innovative business projects; the difficulty is in getting those resources reapplied. It is my suggestion that managing such business deconstruction must be a policy of the company and procedures to do such should be part of every organization’s Value Capture platform.

Second, the Economist article states that the most cited step companies take to ensure success of business innovations is the assurance of senior executive support to the venture. This support is not just acknowledgement of the project, but includes the financial and administrative support needed to see an idea to results. My experience has been that without this executive support, particularly when ideas are of higher risk or don’t fit the standard business of the company, the ideas fail more than 90% of the time.

The article is full of insights on innovation management and the role nations play in innovation and is a must read for those supporting design innovation in any capacity. You can find the article on the EIU website at www.EIU.com.