Innovation isn’t working
Despite the accelerating pace of technology developments and the exploding number of digital natives emerging in virtually every sector, large incumbents appear to be slow in responding to such existential threats. Digital leaders such as CIOs, CTOs and CDOs are making every effort to mobilise innovation initiatives within their respective organisations. Equally, the CEO community is under increasing pressure to demonstrate how it can generate billions of dollars of new value through genuinely innovative activities. Despite these valiant efforts, the FTSE 100 in the UK remains at similar levels to 1999.
“Growth in the incumbent space is just not happening.”
There is a possible answer to this apparent roadblock. Our survey of twenty large incumbents in 2019, and an equivalent number in the USA, reveals an ever-widening gap between what CEOs and their technology executives mean by innovation and how best to implement successful innovation programmes. There are numerous examples of innovation activities amongst incumbent organisations, be they incubators, accelerators, joint ventures or start-ups. But none have shifted the revenue or profit dials significantly over the last two decades. Only 5% of S&P500 companies have surpassed annual growth rates of 5% in the years between 2009 and 2014.1
The purpose of this paper is to create a common language around the word ‘innovation’ and offer effective mechanisms that enable technology leaders such as CIOs, CDOs and CTOs to be productive innovation partners to the CEO and other members of the ‘C’ suite. This requires a clear CEO vision, ‘C’ level empowerment and an appropriate set of resources to make serious innovation happen. In the paper we describe the ‘what’, the ‘why’ and the ‘how’ to innovate as perceived by the executives we interviewed. We also describe the main barriers to innovation such as legacy debt and short termism. We offer a check list of the conditions necessary to achieve effective innovation at scale.
