Innovation is cited as important by more than 91% of organisations, however, only roughly a third of organisations claim to be successful in delivering innovation, a recent study by Aecus and HP finds. Issues holding back innovation range from a lack of available internal resources to a lack of leadership to enable or drive innovation.
In a recently released white paper, titled ‘The Innovation Agenda’, outsourcing consultancy Aecus and HP joined forces to assess the innovation landscape. The study involved a survey, and follow up interviews, of 84 organisations across both public and private domains, with organisations of between 51-100 and 250,000+ in size taking part. The research sets out to among others grasp what innovation is, how important it is for organisations, and how far they are successfully implementing innovation.
The report highlights that innovation is a term that is difficult to tie to a single phenomenon, however, the respondents see innovation primarily as cost and efficiency focused, products and services focused, or in transformational terms. Innovation then is implicated in doing things faster, better, cheaper; leveraging technology with vision to provide the most efficient services and products; and transforming through new ideas, processes, and technologies that provide major progress for the enterprise.
Business see innovation as a critical factor for future success. Of the respondents, 40% replied that innovation is critically important for their future outcome, while 51% said that it will determine how successful they are. Only 1% said it was of no importance. Not only is innovation seen as important today – 82% said it will only be becoming more important in the next five years, while 18% expects no change.
Despite the fact that innovation is seen as (critically) important for 91% of organisations, the ability to deliver and harness innovations varies across respondents. Only 6% name themselves as very successful, while 25% report regular and major innovative achievements. The largest chunk (48%) of respondents has ‘some success’, while around 22% has limited success or is not at all successful in delivering innovations.
While businesses have mixed success in the delivery of innovation, different functional areas within businesses show varying results in terms of driving innovation within a company. The largest overall area of a business that is individually driving innovative success comes from IT, which has the second highest high impact role (a score of 5) at 24%. With the emergence of new technologies and digital channels, this area of an organisation is well positioned to deliver innovative solutions. Not surprisingly the R&D function has the highest impact, scoring 32%,. Engagement has a good 17% at a score of 5, and shows itself as the most generally impactful functional area, with the combined 4 & 5 impact score higher than any other functional area.
Poorly innovative functional areas include HR and Payroll, with only 5% producing high impact innovations, while finance too is a laggard in terms of innovative potential – with a mere 8% taking a major role in driving innovation.
With innovation ranked as important by the vast majority of organisations, the more reserved rates of successful innovation hint at internal and external barriers limiting the successful fostering of innovation. According the survey results, the biggest issue faced by organisations in developing innovative solutions is the availability of internal resources to implement innovation (57%). While higher priority initiatives was seen as a barrier by 45% of respondents, with 43% of respondents unwilling to take the risks associated with innovations. For 33% of those surveyed, leadership was cited as an issue, with 33% also citing a lack of talent as a barrier to innovation. While for 40% of respondents, bureaucracy was indicated as at issue.