INSEAD - Are you innovation ready?

INSEAD, the world’s leading business school, and Logica have revealed the UK findings from its pan-European study on innovation: one of the most comprehensive studies ever conducted on Collaborative Innovation in business. Other country findings will be released over the next two weeks.

The study has shown that UK Business is not ‘Innovation Ready’ for the economic rebound. While business leaders see innovation as a means to fight the crisis, the link between money spent and results is broken. The study revealed a dichotomy between businesses committing spend on innovation, but not letting people get on with the job of innovating or measuring value and outcomes. Key findings from the study include:

• Despite the recession, 80% of organisations have increased or maintained innovation spend
• However, 41% see short-term financial performance clashing with long-term innovation priorities
• Only 16% have good metrics in place to evaluate the success of innovation projects and only 9% use ROI as a measure of innovation
• 64% don’t have a Chief Innovation Officer
• Only 28% of UK respondents think innovation is deeply embedded in their culture
• UK workers are most likely to learn from their mistakes with 50% of business leaders saying they encourage their organisation to do so. France achieved the lowest rate at 20%

INSEAD and Logica surveyed two hundred CxO level business leaders from blue-chip organisations from public and private sectors across Europe, about their views on innovation. Based on the findings, INSEAD developed an Innovation Readiness Model (IRM), as a way to rank organisations' ability to innovate successfully. The ‘readiness’ ranking is the measurement of an organisation’s ability to put into practise leading-edge thinking on innovation. The IRM showed that despite leaders prioritising innovation at board level, organisations scored on average a disappointing two out of four on the IRM.

The study found that organisations’ ‘Innovation Readiness’ is weakest in the Organisation & Collaboration category, especially worrying given collaboration is such a crucial part of solving global problems as well as driving innovative thinking. Those organisations with the most mature innovation process management and measurement got the best return on their innovation spend. Of the countries, the Netherlands stood out as being the most forward thinking in their embrace of collaborative innovation, driven by strong beliefs in the power and applicability of innovation.

Andy Green, CEO of Logica commented. “The importance of collaborative innovation for future competitiveness is now widely accepted. But it is clear from this research that the practical steps needed to reap the benefits are not happening. The Innovation Readiness Model gives us valuable insights as to how organisations can address the real world challenges of successful implementation.”

Soumitra Dutta, faculty director of the research centre eLab@INSEAD and the Roland Berger Chaired Professor of Business and Technology at INSEAD, commented: “If leaders do not improve their innovation readiness, their organisations will not rank among the future winners of the global economy. This is particularly true given the increasing competition from new competitors from emerging markets, such as China and India.”

The Innovation Readiness Model underpins Logica’s approach to innovation called ‘Applied Innovation’ – a pragmatic approach to making innovation happen. One example of this is EMO, Logica’s emission monitoring solution, offering differential fuel pricing, incentivising ‘greener’ driving behaviours. EMO has been recognised by The Economist as one of ten game-changing solutions to combat climate change. Logica is working with governments, regulatory bodies and oil retail companies in a collaborative frame work to create an ecosystem where EMO, coupled with progressive policy-making, drives the overall societal good by improving energy efficiency to make a positive impact on the carbon economy.