Are you apprehensive about innovation? You are not alone. A new study by Accenture based on surveys of 519 companies across over 12 sectors in the U.S., U.K., and France revealed that half of executives feel their businesses have become risk averse when considering new ideas. Instead of inventing brand new products and services, 64 percent of companies focus more on product-line extensions.
If innovation is the creation and delivery of new value, they have focused too much on the "new" part and not enough on the "value" part. While most companies look at innovation as a priority, managers often dismiss radical new ideas. More involvement in the innovation process leads to better financial results, as well as helps develop team commitment.
According to Wouter Koetzier, managing director for innovation and product development at Accenture, many companies take a low-risk approach to innovation because they don’t have a disciplined approach for risk management. "It's a situation compounded for many by an inability to rapidly scale inventions," Koetzier told Business News Daily. "However, the research suggests that those companies that have a formal, end-to-end management system to nurture, scale and launch innovations tend to be more satisfied with their results as they achieve stronger outcomes."
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More than 90 percent of the executives said that the long-term success of their organization's strategy depends on the ability to develop new ideas, but there is a decline in the innovation performance satisfaction over the last three years. The number of executives who were likely to identify the introduction of a new product category as the main innovation goal dropped to 27 percent this year - down from 42 percent in 2009. Not to mention, 33 percent said their main innovation goal was the expansion of the products that supported basic offerings.
The research shows that companies that have formal innovation-management systems are twice as likely to say they were very satisfied with their idea-generation abilities. And, businesses with a system in place are 75 percent more likely to define their strategy as competitive, twice as likely to introduce a new business process, and 35 percent more likely to be first to market with new products.
Adi Alon, a managing director in the Accenture Innovation and Product Development practice, said, "Approached correctly, innovation can be executed at scale, with speed and balance between renovation and game-changing initiatives, driving higher strategic and commercial value."