Innovation critical to business success, study finds
Almost 6 in 10 employees fear their organisation could be irrelevant in 3-5 years, based on the health of their innovation pipeline and culture, according to the latest Dell Technologies Innovation Index.
The new study, polling 6,600 employees across 45+ countries, illustrates why innovation is business critical and how organisations should harness their people, processes and technologies to innovate effectively.
Through assessing organisations, respondents are placed on an innovation maturity benchmark ranging from Innovation Leaders to Innovation Laggards. Per the analysis, just 18% of organisations worldwide can be defined as Innovation Leaders and Adopters. They have an end-to-end innovation strategy and are well placed to navigate headwinds coming from a global recession, supply chain issues, environmental impacts and more, and continue to grow.
They are 2.2x more likely to accelerate their innovation during a recession than Innovation Followers and Laggards (who are more likely to decelerate). This innovation resilience (i.e., determination and ability to innovate during tough times) is credited as part of the reason why Innovation Leaders and Adopters are 1.9x more likely to experience high levels of revenue growth than Innovation Laggards and Followers. (15%+ expected annual revenue growth in 2022).
As the innovation maturity curve demonstrates, the majority of organisations lack a defined innovation strategy (Innovation Laggards and Followers) or are struggling to make gains (Innovation Evaluators). The Innovation Index is a snapshot in time. Organisations can improve by priming their people, processes and technology for innovation.
"There's a powerful equation in business: innovative idea plus technology equals impact. But there are several dependencies that are catching out organisations," the report says.
"They often think its to do with the idea. They are waiting for the next big disruptive lightbulb moment. But small, practical ideas can create a ripple effect that leads to greater productivity, profitability and purpose. What they can't avoid are the right processes and technology. Value only comes when you have all three."
Organisations need help to develop an innovation culture where all ideas can make a difference and learning through failure is encouraged. The study found59% of respondents believe people leave their company because they haven't been able to innovate as much as they hoped they would, while 64% say aspects of their company's culture is holding them back from being as innovative as they want to be/can be.
Company culture is set and modelled by leadership but 71% (ANZ: 71%) say their leaders are more inclined to favour their own ideas. Some of the top cited personal barriers to innovation are a fear of failure and a lack of confidence to share ideas with leaders.
Similarly, the Innovation Index reveals that businesses are struggling to embed a structured, data-driven innovation process to realise innovation across the organisation. The study found only 26% of IT Decision Makers say all their innovation efforts are based on data. Just one in two (52%) organisations are aligning innovation projects to company goals. Its likely, this lack of process and strategy is part of the reason why organisations are struggling to prioritise innovation: the top-cited barrier to innovation impacting teams is a lack of time to innovate due to overwhelming workloads.
The study findings point to the power of technology to enable innovation and the consequences of falling behind, with 86% actively seeking out technologies to help them realise their innovation goal. Conversely, 57% believe their technology is not cutting-edge and fear they will fall behind their competitors.
The study explores where organisations are making gains and facing obstacles, across five technology catalysts for innovation: multicloud, edge, modern data infrastructure, anywhere-work and cybersecurity. In nearly all areas, the greatest stumbling block to unlocking that potential is complexity. For instance, too many organisations have arrived at a multicloud environment by happenstance, an amalgamation of cloud platforms, apps, tools etc. The complexity is costing organisations time, money and precious opportunities to innovate.
These struggles are evident in the top-cited global technology obstacles to innovation:
1. Growing cloud costs
2. Difficulties integrating the overall business architecture with the IT infrastructure architecture
3. Time and money spent to migrate apps to new cloud environments
4. Cybersecurity threats: cant innovate with data and insecure edge devices
5. Lack of IT infrastructure to meet and process data at the edge