According to “Fast, Focused & Fertile: The Innovation Evolution,” a new study recently released by Cheskin and Fitch:Worldwide, innovation did not die along with the economic downturn. Actually, it is continuing to grow and evolve in some fascinating new directions.
“Corporations have increased their budgets for innovation, but (have) learned to spend smarter. Rather than pushing their R&D lab to ‘just invent something new,’ executives are casting a keen eye on meeting rapidly evolving customer needs. The most effective ones have refined their innovation process to be highly responsive to changing market conditions, widely collaborative throughout their organization, and deadly focused on core competencies.”
“Innovation as a discipline is maturing into a more dynamic process, fueled by information flow and cross-functional collaboration, and able to respond much more quickly to changing trends, competitive threats and customer desires.”
Some of the key findings of this landmark research study include:
The definition of innovation is changing: 26% of companies surveyed defined innovation as “a solution: identifying and addressing the unmet needs of consumers,” while 23% defined it as “progress: an advancement, improvement or better way of doing things.” Less than 5% used terms traditionally associated with innovation, such as “discovery” and “revolution” to describe the term.
Flexibility — the quiet revolution: 39% of respondents said their process for innovation is flexible and creative, while only a bit structured. This “dynamic” innovation process appears to hold the most promise for business success.
Spending on innovation hasn’t slowed: Despite the recession and sluggish economic recovery, over half (54%) of the 544 executives interviewed indicate that their companies have increased their investment in innovation over the past two years. But companies are spending smarter: “Bottom-line accountability is driving a practical and customer focused approach to innovation, were success is judged by sales, revenue and customer satisfaction,” not intangible results that are hard to measure. You would naturally expect that the largest companies would be most likely to increase their investments in innovation; in fact, 46% of small companies surveyed have also increased their investment in this key strategic area.
Key drivers of innovation: The two leading drivers of innovation cited by respondents included “competitive pressure” (77%) and “a new discovery or technology” (45%) as the top reasons for increased investment in innovation. “Innovation is no longer an optional investment. For many, it’s their corporate lifeblood. When the economy tanked, they just needed to alter their systems to deal with new pressures. For example, the recession has generated significantly tougher competitive pressures for all companies. (Also) the recession has prompted some companies to change leadership, and with new leadership comes the pressure of new initiatives.”
Innovation is a matter of survival: When asked how critical is innovation to the success of their company, 49% responded that it is very critical, and another 38% described as somewhat critical. Only 13% said innovation is “not very critical” or “not critical at all.”
Customer feedback is critical: “Companies recognize that without a focus on relevant customer experience, no new product or service will succeed. In fact, customer feedback is an important measurement of success, with 49% of respondents using this as a quantitative measure of product success.”