Innovation always seems to be the popular item on the executive agenda but it especially picks up in the times of stagnated economic growth.
These are some of more common questions that pop up in every conversation I have with my clients:
- How do we sustain our existing client base?
- What do we need to do to continue to grow in this economy?
- What is a way to create more opportunities within existing resources?
- How do we follow the ever-changing needs of our customers and merit their satisfaction?
and many more follow… but the main one is always:
- How do we foster innovation and optimize our performance in all areas of our business?
Recently, Booz & Company made a rather significant discovery. They conducted research of its annual Global Innovation 1000 list and focused on the theme of internal corporate culture and its relationship to profitability. A few Cliff notes from the research:
The results are clear — and may explain why many companies have difficulty making their substantial R&D investments pay off:
- – 36 percent of all respondents to our survey admitted that their innovation strategy is not well aligned to their company’s overall strategy
- – 47 percent said their company’s culture does not support their innovation strategy.
- – companies saddled with both poor alignment and poor cultural support perform at a much lower level than well-aligned companies.
- – In fact, companies with both highly aligned cultures and highly aligned innovation strategies have 30 percent higher enterprise value growth and 17 percent higher profit growth than companies with low degrees of alignment.
- – Companies whose strategic goals are clear, and whose cultures strongly support those goals, possess a huge advantage… The key is culture.”
- – Most companies strongly agree on the strategic goals that matter most in achieving innovation success: “Superior product performance” and “superior product quality” were ranked number one or two by a plurality of more than 40 percent of all respondents.
- – Companies agree strongly on the cultural attributes that are most prevalent at their companies. More than 60 percent cited “strong identification with the customer” as among the top two, and 50 percent chose “passion for and pride in products.”
The report clearly shows that fostering a creative and innovative culture is the key to producing first-class products and enjoying superior long-term financial performance.