Enterprise Innovation: The vision-execution gap
In a rapid-paced and digital world, companies must find innovative ways to remain competitive and grow. CEOs often have bold visions for transformative innovation, but our new Innovation Report, informed by research from HFS Research finds that while CEOs are swinging for the fences with their ideas, their businesses are actually playing small ball.?As a result, while companies face continued economic uncertainty in 2023, some worry that investment in innovation is on the chopping block.?This new research underscores why exactly the opposite should happen and 2023 should be the year to prioritize transformative digital programs.
Bringing innovative projects to life within your company can be difficult and taking the first steps can be challenging. Here are four actions CEOs should take to deliver game-changing innovation:
1. Continue strategic investment.?Half of the companies that increased their 2020 innovation budget to prepare for recovery after the height of COVID reported revenue growth, compared to just 38% of companies that froze or reduced innovation investments. Yet, today, 58% of all respondents said they have no centralized budget for innovation.?CEOs should work together with their leadership team to establish a centralized budget that allows for investment outside of annual investment cycles, with clear parameters for prioritizing programs that have the potential to set the future direction of the company.
2. Pursue innovation that improves customer experience from front to back office.?70% of CEOs cite enhancing brand and reputation as a driver for investments in innovation.?However, a key factor here is pursuing innovation that translates into a positive customer experience. Too many organizations invest in digital solutions for some functions but not as quickly for others – resulting in a gap that is visible to customers and recognized internally. Establishing a brand as an innovator and customer-first organization is also proven to help recruit top talent. CEOs must demonstrate to everyone with innovation responsibilities how the innovation they are pursuing ?enables brand strength, customer loyalty, and eventually revenue growth.
3. Focus on building their tech ecosystem.?Nearly half (46%) of digital leaders say tech partnerships are the most impactful innovation driver and another 37% cite collaboration with start-ups.?When pursuing these partnerships, executives must evolve from a historical focus on the right technology to a more strategic approach to building a tech ecosystem.?Considerations include how a potential partner creates capacity, accelerates execution, or opens the door to new markets. CEOs should consider bringing in leaders from their partners and start-ups to collaborate alongside their internal innovation teams. Adding more diverse and technical thinking can often help kick-start ideas.
4. Appoint a leader with authority to pursue “bet the company” innovation. An alarming 40% of survey respondents said that “innovation leadership has little authority to drive change,” and 49% of CEO respondents say the biggest hurdle in their innovation strategy is lack of a centralized group to lead large-scale “bet the company” innovation planning. Transformation requires new accountability and organizational structures to allow for collaboration and integration across traditional management boundaries and annual investment cycles. CEOs should appoint an empowered leader with oversight and authority over a centralized innovation function.
Being prepared to execute transformative innovation fully can propel your growth, and it all starts with closing the transformational execution gap.