Are you really walking the talk? Can you measure your actions and see improvements? This article reveals survey results that cover issues like these — results that might inspire a second look at your organization…
As organizations, we believe the future of the professions we represent will be greatly enhanced by our ability not only to improve what we do and how we do it (“operational innovation”); but also by strengthening our contribution to the products and services our organizations produce (“strategic innovation”).
In collaboration with Kommercialize Ltd and Innovation Fixer Ltd, IACCM has been investigating how our community could contribute to improving innovation practices.
The insights from a recent survey are both interesting and surprising in many respects.
A perspective on innovation at the enterprise level
Innovation is a much used term in business, but do we know what it really means? Context is key, however; often it is used as a single word in a context free manner. Of the many reports that have examined issues facing the C-suite (senior executive management) and the requirements for their functional teams, phrases such as “improved innovation”, “creativity”, and “agility” are regularly among key outcomes.
The survey also shows that 73% of respondents’ organisations have innovation as a ‘top 3’ priority. All employees need to play a role in the growth of the business.
There are many ways to define innovation – 76% stated that their company defines innovation as the development of new products and services (strategic innovation) and slightly fewer, 70%, stated that this included doing things more efficiently and reducing costs (operational innovation).
Surprisingly, only 57% said their organizations get ideas from their customers, with only about 40% thoroughly validating new ideas with customers before resourcing them.
Within this, aerospace/defence, automotive, healthcare/pharma/chemicals, technology, transportation/logistics all scored very low.
Most things in corporate life work better with support from the most senior level in the organization. Innovation is no exception; however only half of respondents believed they have strong support from the C-suite for innovation, with 32% ticking the “don’t know” box.
It shouldn’t surprise that we then found only 30% of people have targets to meet on innovation.
Despite this, just over half felt that leadership of innovation at both the company and functional level was effective.
The survey shows that only 43% of respondents felt that they got value for money from their innovation investments. A significant 32% didn’t know, suggesting it either isn’t measured or perhaps communicated in those companies.
A view on functional contribution to innovation
Whilst the C-suite and wider business often acknowledge the need for functional professionals to play a key enabling role in innovation, the view of the respondents gave an insight into whether, as functions, they are rising to the challenge.
Whilst at the company level there seemed to be an aligned view of innovation, respondents felt that generation, prioritization and validation of ideas appeared to be relatively weak in the functional teams.
- Only 53% felt they had a strong process for generating ideas within their function
- Only 51% felt their function was creative, and
- Less than half had a process that systematically linked their innovations to the corporate strategy.
The numbers in relation to creativity hide some significant variation among sectors. At the high end was services/outsourcing/consulting (75%) which potentially aligns with the IACCM analysis on the RoIe of Contract Management.
Only 42% of us are proud of our function’s innovation record. Most worryingly for future corporate growth and efficiency, only 32% felt that their function had a strong portfolio of innovation projects.
Buy-side professionals lead the way. In general, professionals with buy-side responsibility appear to have a more developed approach and sentiment to innovation. Those who are solely responsible for buy-side scored even higher.
An individual perspective
Having looked at the organization and functional levels, it’s important to understand what we think from an individual perspective. At best only half of us believe we spend enough time on innovation.
There was a tendency for respondents to feel they were better as individuals at allocating enough time to innovation than their function. Unsurprisingly more people felt they got the balance right in relation to operational innovation rather than strategic innovation. Overall 60% of respondents felt there was too little time available for innovation.
IACCM members hold the key to unlock some important areas of innovation. Interestingly, 61% felt that contracting models and T&Cs are a source of innovation with engineering/construction, IT/telecoms, tetail, and services/outsourcing/consulting all rating above this norm.
IACCM members know they have a lot to offer, with 77% of respondents wanting to play a stronger role in innovation.
The research then looked at what respondents felt the key enablers and barriers were to achieving success.
Top three enablers:
- Corporate mindset
- Personal mindset
- Personal performance measurement
Top three barriers:
- Allocation of time
- Corporate processes
- Functional processes
Taking this on board it’s not surprising that relatively few respondents (10%) are active in current IACCM innovation offerings, but more (40%) would be interested in summarized output. Not surprisingly, most people are very busy!
Summary – mind the gap
The C-suite wants innovation and sees functional teams as key enablers, but they need to provide more direction.
Professionals as individuals see the potential and want to play a bigger role, however, collectively as functional teams we aren’t managing to unlock the potential. Is the “urgent” getting in the way of the “important”?
Or is this merely confirmation bias (the overweighting of evidence consistent with a favored belief, underweighting of evidence against) in play? Often we are more willing to point the finger at an amorphous group such as a “function” even though we are a part of the group.
So what can we do about it? – creative tension
If we turn back to the enablers and blockers that were highlighted, this gives us a valuable insight into the areas where small investments may provide a disproportionately positive impact. At the enterprise level, issues such as the corporate environment, processes (policies and practices) and metrics were highlighted. At functional, team and individual levels, issues such as mindset, resourcing and prioritisation were highlighted.
How can we approach it? – bridging the gap
Often the longest journeys start with a local step. We highlighted a desire to create time to be involved in innovation. What could you stop doing, or do more efficiently to create time? Do you ringfence time for innovation, however, little?
At the team or functional level, how could you influence local and corporate processes to align your innovation efforts, be they operational or strategic, with corporate and market needs?
Once we start to address the barriers at a local level we will demonstrate the art of the possible in terms of innovation. At this point we need to get out and communicate the successes and the impacts in a way that over time leverages the enablers.
As a first step you could do worse than creating an hour a week and using it to dip into the IACCM library.
Finally, it’s important to recognize the competitive element. Innovation is a source of revenue and cost advantage, and if your company isn’t seizing this opportunity, it opens the doors to competition to win contracts by being more innovative.
You can prove that you are indeed walking the talk, and that your organization deserves to be seen as an example by entering the IACCM Innovation Awards! Applications are being accepted now. Click here to learn more.
This article originally appeared in IACCM’s Contracting Excellence magazine on 28 May 2014
Authors: Adrian Furner & Dr Kevin McFarthing