A glaring gap between plan and action?
Five statements on CEOs and innovation – what’s our take?
As many as 86% of CEOs recognise the need to change R&D and innovation capacity. Great! But only 27% have already done something to make their company more innovative… Is this a glaring gap between plan and action? Or is there more to it? We took a closer look at the innovation section of the 17th CEO survey and asked Innovation Professor Walter Van Dyck what his take is on the main findings.
Our Prime Foundation Partner PWC interviewed 1,344 CEOs in 68 countries for this survey. We picked five statements from the innovation section.
1/ CEOs see pursuing organic growth opportunities (79%) as the dominant innovation effort for the next 12 months.
Walter: “That’s a good thing. However, in an age of transient competitive advantages (McGrath, 2013), managing innovation should not only be about disciplined pursuit of immediate growth; it should also be about preparing for business transformation that can be caused by disruptive technologies such as big data or 3D printing.”
2/ 86% of CEOs recognise the need to change R&D and innovation capacity, but only 27% have already done something to make their company more innovative.
Walter: “Here I’m less concerned about the stated ‘glaring gap’ between aspiration and action and the speed with which this is happening. Quite simply, it takes a long time to get disruptive technology from the labs into applications. Of course, CEOs can’t just wait and see what happens on the technology front.”
3/ CEOs have discovered the power of open innovation, with 9% of growth effort being put into new joint ventures and strategic alliances.
Walter: “Absolutely. Disruptive technologies create new ecosystems in which CEOs should focus on innovation with – sometimes unexpected – partners. A nice example comes from banks exploring the property market by collaborating with augmented reality and location-based service technology players.”
4/ 30% of CEOs believe in the role of the government to create an innovation ecosystem.
Walter: “That’s a good sign. The study also rightly mentions that the government has helped a lot in creating Silicon Valley. In a European, and even global context, regionally smart specialisation is the way forward. Think of the successful Belgian biopharmaceutical ecosystem, the Dutch high-tech community around Eindhoven and Silicon Fen in Cambridge.”
5/ The most successful CEOs put disciplined techniques in place to make innovation repeatable, dependable and scalable. A robust innovation framework should be put in place to deal with this in a systematic way.
Walter: “I agree. However, for me, what’s missing from the study is how to organise this ‘robust innovation framework’ at corporate level. Here, recent research from Harvard (Lerner, 2013) and our own at Vlerick (Leten & Van Dyck, 2012) found that an increasing number of leading companies are using corporate venturing to find their next breakthroughs. So strategic innovation management is a balancing act between disciplined innovation growing the present and corporate venturing enacting the future. That’s the key to methodically and repeatedly creating value in totally new ways, which is vital in order to thrive in turbulent times.”
Innovation takes time…
It takes decades before disruptive technologies are turned into killer applications. Some examples:
< The computer mouse was invented in Xerox’s Palo Alto labs in 1965
< The mobile phone by Motorola in 1973
< Nespresso’s first patents date from the early seventies
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