Professional Manager, 28th April 2014
UK bosses failing to deliver innovation, says study
Complacency threatening UK Plc's chances of an ideas-led recovery, according to new research from leading innovation consultancy ?What If!
By Jermaine Haughton
British leaders are failing to create environments that encourage their workers to create new ideas that could take their firms to the next level, according to research published today. In Eyes Wide Shut, a comprehensive study of innovation habits from specialist consultancy ?What If!, business leaders admit that they must do more to cultivate innovation. However, progress in the area remains slow, with just 3% of the UK’s largest companies able to get a new idea to market within six months.
Based upon interviews with 400 CEOs, senior decision makers and directors, the study produced the worrying finding that more than a quarter (28%) of UK leaders think that their current business models will no longer work by 2017. Meanwhile, more than a third (38%) admit they have no idea where the majority of their revenue for 2014 to 2015 will come from. Other revelations showed that major UK companies take an average of 19 months to get new ideas to market, while almost three-quarters (72%) of UK business leaders confessed that their organisations rely on fading revenue streams.
However, amid all these concerns a sense of complacency generally prevails – with 94% of bosses reporting that they are satisfied with the current state of affairs.
Innovation has become a key buzzword across a range of different sectors in the past decade, and its influence has spread to underpinning corporate brands, steering strategies, attracting talent and spurring wealth creation. Importantly, it has been viewed as a valuable means of addressing the challenges posed by a constantly evolving business environment. Some 74% of executives agreed that innovation is key to forcing companies to reinvent themselves at a quicker rate, with 41% of 2013 to 2104 revenues coming from products and services new to the market in the past year.
?What If! co-founder and chairman Matt Kingdon – author of The Science of Serendipity: How to Unlock the Promise of Innovation – argued that executives urgently need to confront the malaise. “Despite recognising the acute need for innovation,” he said, “most corporate leaders are struggling to create the conditions for new ideas to thrive. With a few notable exceptions, our research shows efficiency-focused leadership, disconnected structures and laborious processes are stunting hopes of an innovation-led, UK recovery. Swift action is needed to generate sustainable economic recovery.”
According to the report, management failings lie at the heart of the situation, with 57% of executives reporting a lack of leadership on innovation from their management teams, and three in five citing a disconnect between senior bosses and their customers. It doesn’t end there: in 59% of the UK’s major firms, bureaucracy was blamed for snuffing out innovative ideas before they reach fruition. And while almost two-thirds of leaders believe that their teams have no problem with hatching new ideas, 62% claim it is almost impossible to gain support higher up the chain for testing and developing those concepts.
Kingdon stressed: “During a recession the priorities are clear: drive costs down, minimise risk and just carry on. But as we enter recovery, British businesses must innovate harder than ever, or be outpaced by the competition.”
He added: “The economic sun has risen on a very different landscape to the steady growth of the boom years. New technologies, rapidly adapting customer behaviours and globalisation are speeding up market changes and handing the advantage to nimble businesses who can innovate fast. Large companies – whose size was once considered a guarantee of survival, perhaps even a ticket to dominance – must respond quickly and with courage to maintain their relevance and grow.”
Eyes Wide Shut was released today ahead of a London innovation summit, set to feature economist and former Observer editor Will Hutton, together with Labour MP and shadow business minister Stella Creasy.
For additional POV on leading for innovation checkout our latest whitepaper, Eyes Wide Shut.