Fewer than 20 percent of innovation focused projects are coming to life, according to a new report from cloud company, Oracle, primarily caused by lack of focus and leadership, poor processes and an ongoing resistance to change. The survey of 1,850+ decision makers across the Asia Pacific region in the cloud solutions and software market also showed that despite a clear link between growth and innovation, most of the companies interviewed have little plan to be proactive in innovation over the next three years.
“While Asia has taken a lead globally in innovation, the research confirms the growing feeling that there is an impending innovation winter coming,” said Andrew Sutherland, Senior Vice President, Technology and Systems, Oracle APAC and EMEA. “In today’s highly competitive global economy, companies cannot afford to sit back. Those who do risk being outpaced with little hope of catching up. Instead they need to look at the barriers and actively seek to address them. With an effective and supportive culture, clear vision from leaders, the prioritization and funding of chosen projects and new approaches like co-innovating, activities in this area are more likely to see success. Being innovative isn’t just about ideas, it’s about execution.”
According to the report, nearly two thirds of those questioned say 80 percent of innovation projects never make it to market, over one third of companies are overwhelmed by too many innovation projects and one quarter say lack of process is hampering their innovation efforts (26%), a lack of vision (27%) and a lack of commitment from business (23%) are major barriers to innovation.
Key factors preventing new products, services, and customer experiences from reaching the market include not having the technology to enable execution/ delivery, having the innovation team too separated from core business and poor execution, the study said, yet, 86% of companies experiencing strong to significant growth are investing in innovation.
Not enough focus and structure
Over-commitment of resources is preventing companies from bringing their innovation initiatives to life, with one third admitting to being overwhelmed by too many projects. The issue was particularly evident in high-growth companies, with 41% reporting an excess of parallel initiatives. Having the innovation team too separated from core business was also identified as a key barrier.
Lack of leadership
Insufficient commitment from the business in terms of leadership support, investment and vision, coupled with a lack of clear ownership, were shown to be key barriers to a company’s success in innovation.
Customer engagement as an indicator of success
Organizations are moving away from traditional critical success factors measuring success of employee productivity (52%) and revenue (53%), and increasingly looking towards areas like customer experience (57%) and retention (52%) as the key measures for ROI.
The report, “Having a successful innovation agenda” is based on a global survey of 5,000+ decision makers in cloud solutions and software. The respondents represented companies across 24 markets, comprising Australia, New Zealand, Singapore, Malaysia, Thailand, Korea, China, Japan and India within the Asia Pacific region, with revenues of up to £500 million and workforces of 100 to 50,000 employees.