Companies are making blind bets on innovation with billions of dollars potentially on the line, according to PwC’s Innovation Benchmark.
Most companies (54%) struggle to align their business and innovation strategies, leaving many companies flying blind as they place bets on innovation. A finding that is especially important as the report also found that strategy, not size of investment, is the greatest determining factor in the success of an innovation initiative.
“It’s critical for executives and business leaders to meet innovation challenges head on, but often times they are unsure of how or where to begin,” says Volker Staack, co-author of the report and Principal, Global and US Innovation Leader with PwC’s Strategy&.
“This report identifies the pain points for executives across all industries to help find solutions to drive innovation that will align with business strategy and result in bottom-line success.”
The report also explores the different approaches to ideation and innovation models deemed most successful.
Overall, companies are becoming more inclusive and are adopting open innovation models that bring more voices to the table, including employees across all levels and departments. Not only does this foster fresh thinking, it also establishes a more innovative culture.
Furthermore, companies are looking to customers as partners as they look to create the next big breakthrough innovation.
The report also found that leaders show low confidence in their company’s innovation prowess as just over one-quarter of respondents believe they lead their competitors in innovation.
The most innovative companies today are promoting innovation both inside and outside their organizations by breaking down traditional barriers to bring in a much wider ecosystem for ideas, insights, talent and technology.
Open innovation model
Sixty-one percent of respondents say their company deploys an open innovation model, followed by design thinking (59%) and co-creating with customers, partners and suppliers (55%), all well ahead of traditional R&D (34%).
Big data can tell you that customers behave a certain way, but it takes a human to explain why they behave that way. As a result, most companies surveyed (60%) consider internal employees their most important partner for innovation.
Technology companies set the pace in developing breakthrough innovations with 58% of respondents reporting their companies focus mainly on breakthrough innovation.