By Princewill Ekwujuru
Findings from recent researches carried out by Accenture, aÂ global management consulting, technology services and outsourcing company, saidÂ Innovation is a top priority for companies seeking to grow in aftermath of the economic downturn, but flaws in managing innovation may hinder their progressâ€.
Additionally, nearly nine out of 10 respondents (89 percent) said that innovation is as important, if not more important, than cost reduction to their companyâ€™s ability to achieve future growth.
However, the studies found several flaws in the corporate management of innovation, including: failure to learn from mistakes; widespread risk aversion; the need for more collaboration; and too much emphasis on making incremental improvements.
These are among the key findings that emerged from three studies conducted by Accenture in the first half of 2009. The U.S._U.K. study queried executives across several industries, including automotive, banking, capital markets, consumer goods and services, electronics and high_tech, insurance, manufacturing, pharmaceutical and medical products, and retail. The second study focused on innovation in the consumer technology industry in North America, Europe and Asia . The third focused on the communications industry across the U.S. and Europe .
â€œCompanies canâ€™t afford to avoid risk; they must learn from their mistakes and make the bold moves required to grow their company and position it for the economic upturn,â€ said Mark Foster, Accentureâ€™s group chief executive, Global Markets and Management Consulting.Â â€œUnfortunately, many companies donâ€™t have the processes that would enable them to conduct the risk_benefit analysis required to comfortably make the decisions associated with pursuing big bets, which is why innovation oftentimes doesnâ€™t deliver the silver bullet companies seek.â€
â€œManagers must lead by example, collaborate across departments, communicate the business strategy down the line and inspire their teams to engineer the next category_defining product,â€ Foster said. â€œCompanies that fail to do so may lose significant ground to competitors who understand the value of innovation and manage it well.â€
Also in a recent study, 50 percent of respondents in the U.S. and the U.K. reported that their most successful innovation has been development of a new product or service.Â Yet, 74 percent of the respondents said their companies pursue incremental improvements, such as line extensions, and two_thirds (66 percent) said their organizations have made short_term financial results a priority over long_term investments. Additionally, nearly three_quarters (73 percent) of U.S. respondents and nearly one_third (30 percent) of U.K. respondents said their organizations failed to learn from their mistakes.
Among the reasons respondents from both countries cited most frequently for new product or service launch failures were their inability to meet customer needs (57 percent), being late to market (54 percent) and incorrect pricing (52 percent). They also cited the lack of a new or unique customer_perceived value proposition (50 percent), supply chain issues (44 percent) and incorrect forecasting (43 percent). One_third of the respondents (33 percent) also cited their inability to leverage new technology as a hurdle to innovation.