Tuesday, August 18, 2009

Accidental Innovation? It Happens at Some Companies: Deloitte Online Poll

According to a new Deloitte online poll, 31 percent of executives surveyed believe innovation happens by accident at their company. Meanwhile, only 25 percent of respondents say their companies encourage innovation as a mandate.

"Companies need to build innovation into their DNA instead of relying on chance," said Mark White, principal, Deloitte Consulting LLP and moderator of the webcast. "Bad times in the economy present opportunities for organizations to refocus on innovation as a difference maker to driving their business performance and being in the best possible position to deliver results. That is why in Silicon Valley cycles of recession are cycles of innovation. Web 2.0 and semiconductors were churned during a recession."

The survey was conducted during a Deloitte July webcast titled, "Vicious Circle or Virtuous Cycle? The Balancing Act Between the Mandate to Innovate and Pressure to Optimize." With more than 450 respondents participating, only 14 percent said innovation is clearly defined within their organization, compared to more than 67 percent who said innovation is either very loosely defined or tackled project to project.

Doug Standley, principal, Deloitte Consulting LLP, believed the reason for some of these polling results is because most major companies are not organized around innovation. "Companies clearly need direction and a more focused approach to innovation as a basic fundamental building block for success. When only six percent of the respondents say that innovation in their company is funded as a separate entity, there can be a disconnect between innovation and how it impacts a company's performance."

Additional polling results during the Deloitte web cast included:

* Approximately 12 percent of the respondents reported the word innovation is not applicable in their company's structure.
* Innovation financed via "off the book" funding was reported by seven percent of respondents.
* Almost 40 percent of respondents claimed innovation is handled project-to-project.

Dr. John Kao, chairman and founder of the Institute for Large Scale Innovation and a senior advisor on innovation to Deloitte, also recommended the following foundations for success to the executives in spurring innovation:

* Develop and communicate a clear organizational narrative of what innovation is, the business purpose it serves and how it relates to organizational vision.
* Create platforms, practices and funding pathways to support the work of disruptive innovation.
* Link the work of innovation to strategy processes within the firm that illuminate future trends and latent customer needs.

To listen to an archived version of the webcast please visit: www.deloitte.com/us/dbriefs/futurete.

Kao also noted in the latest Deloitte Debate, "Innovation Can Wait -- or Can It?" that business leaders are asking themselves whether they should they stay focused on cost reduction, or is now the time to push even harder for innovation? "In many ways, the choice between cost reduction and innovation is a false one," said Kao. "You can do both at the same time and technology can play a big role in making it work. Just do not substitute innovate technology for the process of innovation itself."

To view Kao's points and counterpoints around these issues, as well as additional perspectives from the public and human capital sectors, please go to www.deloitte.com/us/Debates/InnovationNowOrLater

This topic is one in a series of Deloitte Debates that examine today's pressing business issues from multiple perspectives. New debate topics are added weekly. For a full library of Debates, please visit www.deloitte.com/debates.

About the Polling

The polling responses came from more than 450 business professionals ranging from chief technology officer to consultant across multiple industries who responded to survey questions during Deloitte's July 9 webcast.

About Deloitte

As used in this document, "Deloitte" means Deloitte Consulting LLP and Deloitte Services LP, separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

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