Innovating in products, services and operations
Factors enabling innovation in products, services and operations, as reported by organizations surveyed |
| Ranked by frequency of mention |
| Rank* | Enabling factor |
| 1 | Organization-wide strategy of continuous innovation |
| 2 | Well-established processes for managing innovation |
| 3 | Monitoring and investigation of future consumer needs |
| 4 | Investment in new markets, products, brands and services |
| 5 | Investment in IT systems |
| 6 | Development of culture of innovation |
| 7 | Investment in renewable energy |
| 8 | Enabling of innovation in a public sector setting |
| 9 | Creating innovation partnerships with competitors |
| * Based on 473 responses from our global multi-sector survey. Rank order may not reflect statistically significant differences in all cases. Unclassified/refused responses not shown. |
Percentage reporting innovation is part of the company's core strategy, by sector
Life sciences leads the way in incorporating innovation into the core strategy of the firm.
Summary: Respondents identify four key barriers to innovation success: 1. lack of focus or investment; 2. excessive conservatism; 3. lack of expertise; 4. inflexibility. And yet it is central to the business models of many of the organizations we surveyed.
Innovating in products, services and operations is central to the business models of organizations in some of the sectors we surveyed — notably life sciences.
Overall, it ranks as the fourth opportunity on the ladder, and one that is expected to rise in importance by 2013.
Opportunity outlook and impact
Geographic view
There is significant variety in the priority that different countries give to this opportunity
- In Europe and the US, product and service innovation is currently one of the top three priorities. It is currently the number one strategic initiative for organizations in Germany.
- In the Middle Ease and most of the BRICS, this opportunity was ranked in fourth or fifth.
European organizations — France, Germany, Poland, Italy, Sweden and the UK — are particularly likely to see this opportunity as rising.
Sector perspective
Looking ahead to 2013, most sectors see the potential impact of this opportunity rising. Banking and life sciences are ambivalent.
Obstacles to success
Respondents identified four key barriers to innovation success:
- Lack of focus or investment
- Excessive conservatism within their organizations
- Lack of sufficient expertise
- Inflexibility
Overall, the retail, life sciences and banking sectors gave this opportunity the highest priority, and are least likely to report challenges in this area. Respondents in the power and utilities sector, on the other hand, are the most likely to report obstacles to exploiting innovation.
Organizations in China and Poland were most likely to complain of barriers to exploiting this opportunity. This may reflect the fact it is less common to drive cutting-edge innovation — as opposed to adopting leading-edge practices — in organizations based in emerging markets.
Responding to the opportunity
Our survey identified two main factors that allow organizations to become leaders in exploiting innovation in products, services and operations:
- The development of a coherent organization-wide strategy for innovation
- Well-established processes for managing new products and services
Sector strategies
- Life sciences leads the way in incorporating innovation into the core strategy of the firm.
- Retail and health care sectors are relatively more focused on developing market-leading products.
- Public administration is the most likely sector to aim for innovation in internal processes and IT systems.
Geographic approaches
- South Africa and Australia are the most likely to report that innovation was part of core strategy.
- Brazil and Sweden are most likely to report success in developing market-leading products.
Organizations' responses to innovation in products, services and operations
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