At this point in history, we are in the midst of the Fourth Industrial Revolution and it is becoming increasingly clear that industries that have been historically viewed as safe and immovable are just as vulnerable to disruptive technology and solutions. However, companies aren’t entirely sure how to handle these changes and build innovation into the business structure. Organized innovation within a business is still a new practice that some Fortune 500 companies are still struggling to successfully implement.
While the numbers vary, about 65% of major corporations are working to incorporate innovation into the business and include it at the executive level. These efforts have seen new seats opening up at executive boards for Chief Innovation Officers, Chief Innovation Architect and other similar titles. New leadership is overseeing the development of innovation departments and working to make innovation a priority on par with other daily tasks. While this is certainly a step in the right direction, companies haven’t necessarily effectively executed new plans well.
Part of the problem has to do with self-perception. Executives tend to view themselves as not only open to innovation, but as innovation leaders. According to a recent survey from Ernst & Young LLP, about 90% of executives think that their company provides clear channels for innovation and that new ideas are encouraged and celebrated. However, only 55% of entry-level employees feel the same way. Clearly, employees and executives aren’t on the same page when it comes to innovation.
Another challenge to effectively integrating innovation into businesses is that innovation executive positions aren’t clearly defined. These roles don’t come with the same set of clear responsibilities and goals as other traditional C-board spots. In some cases, it is up to the executive to negotiate and redefine their position on a daily basis as circumstances and demands evolve.
Fortune 500 companies that continue to struggle with utilizing innovation solutions and moving forward in an environment ruled by disruptive competitors will be left behind. By 2025, the Fortune 500 list will barely be recognizable with about 55% of companies losing their spot on this list of elite companies. Ultimately, a full 86% of executives recognize that innovation is a very important part of their growth and survival, only 19% believe that they are successfully using any of the required components of innovation. This disconnect between the realization that decisive steps must be taken and the actual execution of innovation strategies is exactly where innovation solutions come into play. Taking advantage of innovation solutions means investing in and committing to a full innovation life cycle. This includes engaging the right people, creating new strategies for automation and performance measurement, evaluating ideas and executing the best ideas in a way that reduces the time to market.