Thursday, 19 November 2009

Management shortcomings hinder innovation

According to a recent report by Accenture, "Innovation is a top priority for companies seeking to grow in (the) aftermath of the economic downturn, but flaws in managing innovation may hinder their progress”.

The cited 5 flaws in the corporate management of innovation, namely:
  • failure to learn from mistakes
  • widespread risk aversion
  • insufficient collaboration
  • too much emphasis on making incremental improvements, and
  • inability to leverage new technology (33% of respondents).
According Accenture's research:
  • 89% of respondents said that innovation is as important, if not more important, than cost reduction to their company’s ability to achieve future growth.
  • 50% of respondents in the U.S. and the U.K. reported that their most successful innovation has been development of a new product or service.
  • Yet, 74% of the respondents said their companies pursue incremental improvements, such as line extensions, and 66% said their organizations have made short-term financial results a priority over long-term investments.
  • 73% of U.S. respondents and 30% of U.K. respondents said their organizations failed to learn from their mistakes.
The reasons given for the failure of new product or service launches included:
  • 57%: inability to meet customer needs
  • 54%: being late to market
  • 52%: incorrect pricing
  • 50%: the lack of a new or unique customer-perceived value proposition
  • 43%: supply chain issues, and
  • 43%: incorrect forecasting.
Source: Vanguard