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Need to adapt? Firms need to rethink the way they innovate

Companies that cannot change their offering or improve their functioning to respond to changes in their environments will be surpassed by more nimble competitors. The question for companies is how to foster a culture of creativity and innovation at all levels of the organisation. For many companies this task is allied with improving communication, which underpins better collaboration and idea sharing within and across departmental and geographical boundaries.

EF recently partnered with the Economist Intelligence Unit to look at how global companies do this. Here’s a top line look at the key findings or to read the report in full please visit: http://innovativecompany.global/

1) Firms around the world are staking their futures on their ability to innovate

Creating new products and services has become a top-three priority. This is more important than cutting costs or investing in talent. More than two-thirds have ramped up investment in innovation over the last three years and plan to keep doing so.

2) Many companies will fail to capitalise on their investments unless they rethink their approach to innovation

Employees’ confidence in their ability to communicate with colleagues to develop innovative ideas falls steadily as they encounter various barriers. Confidence falls significantly from 95% of respondents who feel confident communicating with colleagues in their own departments to 72% who feel confident communicating with colleagues in different countries.

3) Firms aspire to create a culture of experimentation, but often fail to follow through

A creative culture is one in which each employee feels encouraged to suggest ideas, and in which there is a high tolerance of failure. But many companies do not take steps to ensure those conditions are present.

In our survey, a third of respondents said their firm’s lack a culture that encourages new ideas from everyone and 30% said their companies lack a culture that allows for failure.

4) Companies need to build the skill base of employees in developing new ideas and communicating those ideas widely within the organisation

The research suggests investing in confidence-building and communication training could yield significant benefits. Four-fifths of respondents say that improving the communication skills of staff would significantly increase their firms’ ability to innovate.

What does this all mean?

Many global firms strive to react quickly and flexibly to market and technology changes through nurturing a culture of innovation. To do this successfully, businesses must first be aware of the main barriers to building a culture of innovation.

Ultimately, it is the willingness to imagine and to try something new that fuels creativity and innovation. As firms focus more on innovation, they should practice what they preach. Efforts to improve a firm’s ability to innovate are themselves an exercise in experimentation and continual learning.