UK Business not 'Innovation Ready' for Economic Rebound
Business leaders see innovation as means to fight the crisis, but link between money spent and results is broken warns new study by INSEAD and Logica
INSEAD, the world’s leading business school, and Logica, the IT and business services company, today announced the findings of one of the most comprehensive studies ever conducted on Collaborative Innovation in business. The study revealed a contradiction between businesses committing spend on innovation, but not letting people get on with the job of innovating or measuring value and outcomes. Key findings from the study include:
- Despite the recession, 80% of organisations have increased or maintained innovation spend
- However, 41% see short-term financial performance clashing with long-term innovation priorities
- Only 16% have good metrics in place to evaluate the success of innovation projects and only 9% use ROI as a measure of innovation
- 64% don’t have a Chief Innovation Officer
- Only 28% of UK respondents think innovation is deeply embedded in their culture
- UK workers are most likely to learn from their mistakes with 50% of business leaders saying they encourage their organisation to do so. France achieved the lowest rate at 20%
INSEAD and Logica surveyed two hundred business leaders from blue-chip organisations from public and private sectors across Europe, about their views on innovation. Based on the findings, INSEAD developed an Innovation Readiness Model (IRM), as a way to rank organisations' ability to innovate successfully. The ‘readiness’ ranking is the measurement of an organisation’s ability to put into practise leading-edge thinking on collaborative innovation. The IRM showed that despite leaders prioritising innovation at board level, organisations scored on average a disappointing two out of four on the IRM.
The study found that organisations’ ‘Innovation Readiness’ is weakest in the Organisation & Collaboration category, especially worrying given collaboration is such a crucial part of solving global problems as well as driving innovative thinking. Those organisations with the most mature innovation process management and measurement got the best return on their innovation spend. Of the countries, the Netherlands stood out as being the most forward thinking in their embrace of collaborative innovation, driven by strong beliefs in the power and applicability of innovation.
Andy Green, CEO of Logica commented. "The importance of collaborative innovation for future competitiveness is now widely accepted. But it is clear from this research that the practical steps needed to reap the benefits are not happening. Therefore, although people have been talking about collaborative innovation for some time, it’s now even more evident that is not happening on a regular basis. The Innovation Readiness Model gives us valuable insights as to how organisations can address the real world challenges of successful implementation."
Soumitra Dutta, faculty director of the research centre eLab@INSEAD and the Roland Berger Chaired Professor of Business and Technology at INSEAD, commented: “If leaders do not improve their innovation readiness, their organisations will not rank among the future winners of the global economy. This is particularly true given the increasing competition from new competitors from emerging markets, such as China and India.”
The Innovation Readiness Model underpins Logica’s approach to innovation called ‘Applied Innovation’ – a pragmatic approach to making innovation happen. One example of this is EMO, Logica’s emission monitoring solution, offering differential fuel pricing, incentivising ‘greener’ driving behaviours. EMO has been recognised by The Economist as one of ten game-changing solutions to combat climate change. Logica is working with governments, regulatory bodies and oil retail companies in a collaborative frame work to create an ecosystem where EMO, coupled with progressive policy-making, drives the overall societal good by improving energy efficiency to make a positive impact on the carbon economy.
For more information on the report and to view the Executive summary, please visit www.logica.com/insead.
About the Innovation Readiness Model (IRM):
INSEAD and Logica believe this research provides a starting point for the IRM to become an industry standard measurement, and a tool to help innovation practitioners improve over time. Companies wishing to measure their innovation readiness can do so with the ‘Innovation Scan’ tool – for more details go to www.logica.com or www.INSEAD.org.
Based upon an in-depth analysis of the survey data and interviews with dozens of senior executives from leading organisations, the IRM has been designed to rest upon four pillars and four levels of capability achievement along each pillar. These four pillars - described below - form the four foundations on which successful collaborative innovation can be built:
Leadership & Ambition
Undirected leadership and inefficient communications means Boardroom vision is not translating into reality
Organisation & Collaboration
Whilst organisations recognise that collaboration both internally and with external partners is essential to thrive, these partnerships are not always managed in the most effective way
Implementation & Measurement
Poor measurement of innovation and immature internal processes means that organisations are unable to accurately demonstrate the impact of innovation initiatives
People & Culture
Organisations are failing to identify and harness the internal skills that are required for innovation to thrive. The expectation is that cultural diversity is a benefit to innovation, however, if its not managed properly – diversity can be counter-productive
About Logica
Logica is a leading IT and business services company, employing 40,000 people. It provides business consulting, systems integration, and IT and business process outsourcing services. Logica works closely with its customers to release their potential - enabling change that increases their efficiency, accelerates growth and manages risk. It applies its deep industry knowledge, technical excellence and global delivery expertise to help its customers build leadership positions in their markets. Logica is listed on both the London Stock Exchange and Euronext (Amsterdam) (LSE: LOG; Euronext: LOG). More information is available at www.logica.com.
About INSEAD, The Business School for the World
As one of the world’s leading and largest graduate business schools, INSEAD brings together people, cultures and ideas from around the world to change lives and transform organisations. This worldly perspective and cultural diversity are reflected in all aspects of our research and teaching.
With three campuses in Asia (Singapore), in Europe (France) in the Middle East (Abu Dhabi), and an office in New York, INSEAD extends the reach of its business education and research across three continents. Our 145 renowned faculty members from 36 countries inspire more than 1,000 degree participants in our MBA, Executive MBA and PhD programmes. In addition, more than 9,500 executives participate in INSEAD’s executive education programmes. With the INSEAD-Wharton Alliance, we deliver MBA and co-branded executive education programmes on Wharton's U.S. campuses in Philadelphia and San Francisco, as well as on our campuses in Asia and Europe.
This academic year is an important milestone for INSEAD as we celebrate half a century of success. Fifty years ago, INSEAD pioneered the concept of international business education – and we’re still innovating across all of our programmes, not to mention our cutting-edge research. The world and INSEAD have developed dramatically in the course of the last fifty years, but the core values on which INSEAD were founded have remained constant. These principles have enabled INSEAD’s entrepreneurial spirit to evolve and the school has grown into a truly global force.
Today’s organisations need leaders with the knowledge and sensitivity to operate anywhere in the world. This is why business turns to INSEAD – to develop the next generation of transcultural leaders.
More information about INSEAD can be found at www.insead.edu
Logica media contact:
Anna Brog
Email: anna.brog@logica.com
Tel: +44 (0) 7595 612 269
INSEAD media contact:
Sophie Badre
Email: Sophie.BADRE@insead.edu
Tel: +33 (0) 6-86-07-33-75
