CEOs are getting personally involved in innovation and view strong, visionary business leadership as one of the two most important ingredients for successful innovation, according to a new survey.
As companies look to innovation to drive growth, 37% of CEOs surveyed by PwC said their primary role in driving innovation is to be a leader, and 34% described their role as “visionary”, according to the survey report. The survey polled 246 chief executives from North and South America, Europe, Asia Pacific and the Middle East.
More than one-quarter (26%) said strong, visionary business leadership is the most important ingredient for successful innovation at a company. An additional 26% said having the right culture to foster and support innovation is the most important factor for innovation.
The importance of innovation rose compared with a similar survey in 2009, when companies were more concerned about increasing operational effectiveness to stave off losses during the financial crisis, according to the report. Three-fourths of respondents now view innovation to be at least as important as operational effectiveness in the success of their company.
Despite that focus on innovation, CEOs reported significant barriers to innovation at their companies. Just 14% said nothing is stopping them from being innovative. The most frequently cited constraint was financial resources, reported by 43% of respondents.
Existing organisational culture was identified by 41% of respondents as a barrier. That’s significant because having a culture that supports innovation was reported as one of the two most important ingredients for successful innovation.
Other significant barriers included lack of talent (30%), political and regulatory factors (21%) and inadequate technology (18%).
Based on the survey, PwC recommended five key questions for organisations to address to become genuinely innovative:
- Does the way you innovate (collaboration, employee empowerment, customer engagement, time horizons, etc.) reflect your vision and appetite for innovation?
- How effectively are you articulating your vision and appetite for innovation to employees, investors and business partners?
- Do your employees see creating, promoting and executing new ideas as a crucial part of their job description?
- Are the processes for decision-making and organisational mobilisation quick enough to bring new innovations to market ahead of your competitors?
- How effectively do you measure and track the return on investment and ability to meet customers’ changing expectations?
Related CGMA Magazine content:
“Five Ways for Finance to Become an Innovation Partner”: The finance function isn’t just for approving or monitoring strategic initiatives; it’s becoming part of the decision-making team. A new CGMA report shows how CFOs and other finance professionals can be partners to successful innovation.
“Cultivating Innovation”: Hal Gregersen, Ph.D., professor of innovation and leadership at INSEAD, explains that every individual has more untapped creative capacity than he or she may realise.
“How to Lead an Innovative Team”: Ravichandran Venkataraman, ACMA, CGMA, senior vice president and head of the Global Business Services division at Hewlett-Packard, has helped HP innovate by building a diverse team and welcoming ideas from throughout the organisation. He offers five tips on how to foster innovation.
“Innovating for Competitive Advantage: A Personal View”: Learn how to use creative vision and smart change management to pursue big goals. Former Coca-Cola finance executive Doug Bonthrone, ACMA, CGMA, describes how to keep continuous improvement flowing.
“A Taste for Innovation”: Cross-functional, self-governing employee boards help global spice company McCormick & Co. identify business process improvements and other innovations. McCormick executive Ken Kelly, CPA, CGMA, explains how it works – and how employees benefit.
—Ken Tysiac (firstname.lastname@example.org) is a CGMA Magazine senior editor.