Why Innovation Is All About Many Small Steps

 
 
By Dennis McCafferty  |  Posted 02-22-2016 Email
 
 
 
 
 
 
 
 
 
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    Why Innovation Is All About Many Small Steps
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    Why Innovation Is All About Many Small Steps

    At innovative organizations, change doesn’t occur in one large motion—it happens through many coordinated, forward-looking steps.
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    Indispensable Element
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    Indispensable Element

    59% of survey respondents say it's important to be innovative, and 58% say innovation helps them achieve their goals.
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    Unsubstantiated Opinion
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    Unsubstantiated Opinion

    70% believe that their company is an above-average innovator. However, just 14% work at organizations which reap significant business benefits from innovation.
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    IT Inventory, Part I
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    IT Inventory, Part I

    45% say unified communications is a top tech tool in supporting innovation, and 44% say business process workflow automation supports innovation.
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    IT Inventory, Part II
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    IT Inventory, Part II

    43% say enterprise social networks serve as a top tech tool in supporting innovation, and the same percentage cite solutions addressing enterprise collaboration software, big data/analytics and digital signage.
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    Bottom-Line Benefits
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    Bottom-Line Benefits

    Innovation "leader" organizations outperform "laggards" by an average of 41% on sales growth, and 16% in profit margins.
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    Big Production
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    Big Production

    Innovation leader companies outperform laggards by an average of 40% when it comes to employee productivity increases.
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    Streamlined Spend
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    Streamlined Spend

    Innovation leader businesses spend only 5% on R&D as a percentage of revenue, while laggards spend 7%.
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    Open Air
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    Open Air

    Innovation leader companies spend 29% of their total budget on "blue-sky projects"—research into areas outside of current products or offerings—while laggards spend just 18% on these efforts.
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    Tiny Steps
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    Tiny Steps

    81% of innovation leader organizations say their approach to improvement is to make lots of small, frequent changes (as opposed to large "big bets"), while only 19% of laggards do this.
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    Up and Down
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    Up and Down

    Overall, 56% of survey respondents describe their company's approach to strategic development as "top down," but their approach to innovation is "bottom-up."
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    Competitive Edge
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    Competitive Edge

    "Bottom up" innovators earn 24% more in revenue growth (and 17% higher profit margins) than "top down" innovators.
 

While the vast majority of senior executives agree that innovation is an important organizational quality that helps them achieve goals, very few companies actually gain significant business benefits from innovation, according to a recent survey from Ricoh. Tech resources play a big role here, especially those addressing unified communications, business process workflows, enterprise collaboration and big data/analytics. However, innovation is about corporate culture—probably even more so than tech. And survey findings reveal that there are huge gaps with respect to what innovation "leader" and "laggard" companies do. For starters, leaders are far more likely to allocate budgeting to "blue sky" projects, or research into potential opportunities outside of current products or offerings. It also helps to approach innovation as a "bottom up" process, as opposed to "top down," findings reveal. "(There is) a strong link between innovative practices and better business outcomes, with innovation leaders having a clear advantage over laggards on multiple key performance indicators," according to the report. "But innovation is not quick, and it is not easy. Companies should focus not only on new products and new markets but also on applying innovation across their entire organization … Doing so will require re-examining and optimizing existing processes as well as investments in a broad range of technology tools to support the innovation process." More than 1,630 global executives at the director level or higher took part in the research, which was conducted by IDC.

 
 
 
 
 
Dennis McCafferty is a freelance writer for Baseline Magazine.

 
 
 
 
 
 

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