Build For the Future with Innovation Success
Those that do so and become leaders in innovation can improve near-term performance and lay the foundation for future success.
As the corporate landscape transforms and technological progression quickens, organizations face a mounting demand to differentiate through extraordinary innovation. They must uncover significant inventions or market opportunities, then devise strategies to roll out fresh products, services, features, and experiences that seize these opportunities.
Firms that excel at innovation secure the ability to enhance short-term results and establish a platform for continued prosperity.
The Significance of Innovation
Recent studies reveal that innovation has climbed to the top of the agenda for nearly 80% of companies. Despite economic instability, business leaders are directing their investment towards expansion, marrying immediate ambitious goals with strategies to uplift future output.
A select group of firms has tasted success by focusing on innovation and preparing for upcoming trends. Remarkably, almost 70% of their created value stems from revenue expansion propelled by innovation, significantly outpacing their contemporaries and the S&P Global 1200.
These leading companies utilize innovation in a manner that boosts both immediate performance and long-term growth. Their leadership adopts innovative practices within and beyond their core operations, helping them stand out from the competition, amassing more capabilities, and achieving superior results.
They fortify innovation within operational processes, value chains, customer experiences, and organizational culture. They go beyond their core operations to innovate new products, services, and business models.
Although implementation differs, these leaders achieve impressive financial and non-financial returns, establishing a holistic approach to innovation-driven growth. Today's leading innovators dedicate themselves to innovation as a strategic tool, gaining advantages even in times of uncertainty.
Characteristics of Innovation Leaders
Innovation leaders rely on specific enablers that foster growth, distinguishing them from less innovative firms. These include:
Enabled management
An innovation-encouraging entrepreneurial culture
Cutting-edge technology
Innovation-centric metrics
Collaboration and knowledge sharing
Recognition of expertise and growth over tenure
A propensity to take bold risks
Innovation leaders distribute resources based on desired outcomes, including internal and external initiatives, immediate gains, and future growth. To overcome potential obstacles to successful innovation, companies need to concentrate on three crucial steps:
Strategizing: Develop a clear vision of successful innovation by aligning goals with strategy.
Creating and scaling: Develop valuable business ideas and, after adequate testing, employ top talent to launch, run, and quickly scale the most successful ideas into full-fledged businesses.
Accelerating: Leverage technology, human resources, and governance to enhance innovation-related capabilities and work methods to optimize ROI.
Converting Innovation to Action
Here are a few instances of how leading firms are leveraging innovation:
The Multiphase Approach: A high-end beverage company formed a business unit to concentrate on select areas of necessary transformation, such as sustainability, digitization, and health and wellness. This centralized team prioritized partnerships, new ventures, and acquisitions. This tactic allowed the firm to expand new businesses to $1 billion in revenue and to become an early frontrunner in rapidly developing product categories and technologies.
The Aggressive-Target Approach: A worldwide telecom company aimed to elevate revenue from digital services, which previously constituted only 1% of total revenue. It crafted an innovation strategy and set up cross-functional teams dedicated to product development for specific customer journeys. It revamped its IT architecture to support the new offerings and expedite growth. The outcome: Over 15 new products are expected to contribute $250 million to the firm’s yearly operating income.
The AI Approach: A multinational consumer goods manufacturer is rapidly exploring generative AI for business development to generate new product ideas and corresponding promotional campaigns. The AI tool simulated customer segmentation in a demo, brainstormed new product ideas in existing categories and devised potential social media promotions.
Regardless of the method, becoming an innovation leader enables firms to construct a future-proof business and outpace their competitors.
Written by Eric Pilkington, Managing Partner
