By Rob Starr, Big4.com Content Manager.
Adi Alon is a Partner and Managing Director at Accenture Strategy. As such, he understands the background behind the latest research from his company that finds U.S. companies have been struggling with innovation for the last three years. We spoke with him recently and he touched on several reasons for the shortcomings whereby 60% of the respondents said their companies did not learn from past mistakes, another 75% said their firms were risk adverse and a full 72% said their companies miss market opportunities.
Natural Organizational Home
“Other areas of concern include the fact that many respondents indicated that some attempts at innovation die because they don’t have a natural organizational home,” he said. “ As well, they are not doing as good a job as they would like in managing the end of life of products and services which can drive up complexity and represent another layer of risk.”
Alon points out an overarching part of the problem is a one-size-fits-all approach many companies have when it comes to implementing innovation and how this philosophy is a big reason why some organizations are still dealing with a lag. The survey polled 500 professionals with innovation responsibilities at U.S. companies with revenues greater than $500 million and found that 82 % admitted not distinguishing their innovation approaches between incremental versus large-scale transformational change.
The findings also highlight the fact that the rapid and constant change often necessary to stay relevant in today’s highly competitive markets doesn’t come easy. Alon explains.
“It’s actually quite difficult to depart from your past practices when it comes to adopting or designing an approach that fits those markets requiring innovation and it’s really not just about
changing the process,” he said. “ There are also issues around governance and how to measure and valuate certain types of projects.”
As well, there are questions around how to measure and valuate certain kinds of projects with different risk profiles and where they fit into the existing organizational structure. In some cases, there might not even be a set market to measure against.
“If you have a more traditional way of evaluating projects, you need to adjust to a more transformative type of innovation,” he says adding the way projects are funded and the skill sets needed are some of the additional challenges facing modern organizations.
Putting those factors together necessitates a departure from existing practices to foster innovation. The research found companies needed to be flexible and agile so they can process new ideas quickly and absorb the talent they need from the right industries. Other transformational changes needed include further adopting this new playbook based on collaboration to satisfy the ever-changing demands of modern clients and taking advantage of alliances across multiple business sectors to unlock the potential of these emerging technologies. Alon concludes by stressing the shifting lines modern business deals with.
“if you think about the real transformative initiative, it may cut across existing product lines or business units,” Alon says. “Unless you design a home or a dedicated organizational site to nurture and develop that, you can run against your existing structure.”