Despite the recession, most U.S. and U.K companies have continued or increased their spending on innovation, according to Accenture. Two-thirds of the companies polled had either maintained or increased their innovation spend in the last six months. Nearly half (48 percent) of the U.S. and U.K. executives surveyed by Accenture said that their companies had increased funding for innovation in the last six months. One-third of respondents said the level of spend had remained the same. In fact, innovation is seen as a top priority for their economic recovery. Eighty-nine percent of the survey’s respondents said that innovation was more important to their company’s future growth than cost reduction was.
While companies are looking to drive innovation, common management practices hinder innovation, including failure to learn from mistakes, failure to use new technologies needed to drive innovation, endemic aversion to risk-taking, lack of collaboration and an emphasis on incremental innovation.
“Managers must lead by example, collaborate across departments, communicate the business strategy down the line and inspire their teams to engineer the next category-defining product,” said Accenture’s Mark Foster.
“Companies that fail to do so may lose significant ground to competitors who understand the value of innovation and manage it well,” Foster said.
Innovation goes against many, if not most, existing business practices. Says one executive surveyed by Accenture:
“If companies are doing something truly innovative, they are probably going against existing business practices. Opposing forces will likely counteract them. Among some consumer technology firms there is the belief that if it’s innovative, everyone will embrace it, but often just the opposite happens.”