BOSTON--(EON:Enhanced Online News)--The Boston Consulting Group’s (BCG’s) fourth annual global survey and report on innovation illuminates deepening executive frustration with innovation returns. It also shows continued recognition that innovation is an imperative for performance and growth.
“In our experience, the vast majority of companies have an abundance of ideas. But only a handful are capable of consistently generating profit from those ideas. Companies that can do that are the true innovators.”
Of the nearly 2,500 executives BCG surveyed worldwide, only 46% said they were satisfied with returns on innovation spending, compared with 52% in 2006. Two-thirds (66%) said they considered innovation a top-three priority, versus 72% the prior year, and 67% said they plan to increase innovation spending, versus 72% the year before.
“Most companies consider innovation important, often critical, to their business. Yet they’re increasingly frustrated,” said BCG Senior Partner James P. Andrew, the lead author of Innovation 2007. “They feel they should be getting more from their innovation efforts: more and better new products and services; stronger internal processes; improved customer experiences and more effective business models. Yet, in many cases, these benefits remain elusive.”
Andrew leads BCG’s Innovation practice and co-authored the recent best-seller, Payback: Reaping the Rewards of Innovation (Harvard Business School Press, January 2007) with Harold L. Sirkin, one of the report’s co-authors. “Based on the 2007 survey,” Andrew continued, “companies seem to believe it’s getting harder to innovate. That’s not the case. Innovation has always been hard. Creating an innovative company takes a lot of work – often rewiring the DNA of the organization. It’s worth the effort; successful innovation is the surest way to build asset value and shareholder return.”
Innovation 2007 is a report on and analysis of findings of a survey, completed earlier this year, of nearly 2,500 executives worldwide. Insights from the survey are expanded upon in a companion report, Measuring Innovation 2007. The survey was conducted in conjunction with BusinessWeek, which published a ranking of the most innovative companies.
Following are selected findings and insights from Innovation 2007:
Nothing Helps a Company Like Successful Innovation
Executives Care More About Innovations for Existing Customers Than Breakthroughs to New Markets
The Biggest Obstacles to Innovation: Risk-Averse Culture and Failure to Focus on Speed
Frustration May be Linked to Not Having the Right Innovation Metrics – Ones That Could Prompt Better Innovation Performance
Tech, Telecommunications and Travel Companies Are the Most Satisfied with Innovation Returns
Asian and European Companies Are Most Likely to Increase Innovation Spending
In Terms of Industries, Automakers Will Spend the Most
Companies Are Ratcheting Up Innovation Investments in China, India and Other Rapidly Developing Economies (RDEs)
The Most Innovative Companies, According to Global Executives
“The most innovative organizations excel not just at idea generation – although they’re strong there – but also in the capabilities necessary to transform those ideas into profits,” added Andrew. “In our experience, the vast majority of companies have an abundance of ideas. But only a handful are capable of consistently generating profit from those ideas. Companies that can do that are the true innovators.”
About The Boston Consulting Group
Since its founding in 1963, The Boston Consulting Group has focused on helping clients achieve competitive advantage. Our firm believes that best practices or benchmarks are rarely enough to create lasting value and that positive change requires new insight into economics and markets and the organizational capabilities to chart and deliver on winning strategies. We consider every assignment to be a unique set of opportunities and constraints for which no standard solution will be adequate. BCG has 64 offices in 38 countries and serves companies in all industries and markets.
To receive a copy of Innovation 2007 and the metrics report Measuring Innovation 2007, or to schedule an interview with Jim Andrew, please contact Alexandra Corriveau at Sommerfield Communications, Inc. (212) 255-8386 or email@example.com.