KPMG’s survey reveals how collaboration is central to success

Exago has partnered with KPMG in Portugal to promote the first global ‘Innovation Survey’ to companies operating in the country. Survey findings show how companies that systematically pursue collaboration opportunities have a significantly higher rate of commercially successful product launches and nearly twice as much revenue growth.

Three hundred participants at the European level took part in the survey, 39 of which were from Portugal. Overall, KPMG’s analysis concluded that good innovators in organisations with a budget allocated to innovation strategy and an idea management solution in place also have the largest share of revenue coming from successful new products launched in the last three years.

The data reveals as well that investing in product development and enhancement impacts positively on revenue growth. Yet it’s interesting to see how companies that focus on innovation to find new sales channels and on customer experience and satisfaction improvement have benefited from even higher revenue growth rates in the last three years (> 5%).

However, where innovation is concerned, the journey for companies is still a long one. There is a lack of well-structured innovation management processes to stimulate it and a lack of experience, as the battle to recruit talented innovators is growing.

The survey includes an in-depth analysis and insights from KPMG’s global experts and Exago’s CEO on subjects such as:

  • How is idea management structured?
  • Why is collaboration needed?
  • Where do companies focus their efforts, how do they finance innovation and what are the companies’ challenges?
  • How are corporates responding to the drivers of innovation and positioning their strategies?
  • What separates good from bad innovators?

You can check out Portugal’s results here. A short summary is also available below in English.

 


KPMG INNOVATION SURVEY 2016 – EXECUTIVE SUMMARY

‘1. Collaboration is crucial to success
Companies that systemically search for collaboration opportunities secure a higher success rate for their products and almost double the increase in income.

2. The building of broader innovation skills demands a more complex transformation process
In spite of evidence that supports the focus on collaboration efforts, only a few companies enjoy effective collaboration, as it requires a complex transformation process at both a cultural and an operational level.

3. Business model innovation offers significant opportunities in a world dominated by innovative products
The main focus in all industries is product development and improved process development. However, the creation of new selling channels, alternative income models and the discovery of new or present needs might have the same level of impact as the innovation of the company’s main functions and the product itself.

4. The war for talented professionals is ongoing
Most of the time, the main challenge that companies face in terms of innovation is related to lack of people with the required competences and the necessary experience.

5. Fine innovators have an implemented innovation policy
Companies that have implemented process management and innovative governance models enjoy a high rate of success with their products and a significant share of their income comes from products launched in the past three years. However, only 16% of companies use this approach in the management of their innovation programmes.

6. In spite of the importance of commercial deadlines, the inability to meet deadlines is where most projects fail
Meeting deadlines in the project’s chronogram is the main challenge of ongoing projects, with about 30% of projects falling behind schedule. The speed of commercialisation is particularly important as it can generate a competitive advantage.

7. Collaboration is anchored to your comfort zone
Research and Development (R&D) collaborations are particularly important, even if companies often find themselves limited to only business partners. Collaboration with universities, start-ups and incubators is much less common. Different kinds of collaboration partners have different strong points and contribute with different skills and resources. For that reason, diversifying collaboration partners offers more opportunities than maintaining a single collaboration with only one type of partner’.

Six common mistakes and one advice for innovation challenges

Operational efficiency is clearly ahead in idea implementation, while sales and marketing, sustainability and better customer experience count for more than half of all the ideas implemented. By dissecting the innovation challenges that performed the worst – and excluding extrinsic factors such as a weak system of incentives and feeble, meagre or uninteresting communication – we note that these challenges tend to be:

a. Unfamiliar or distant from people’s everyday work and needs;
b. Detached from current business strategic alignment: This may happen, for instance, if you launch a challenge focused on anticorruption, social inclusion or ecosystem protection, but your company has never, in your daily practices and initiatives, really shown interest in such themes;
c. Too technical for the target audience: Both technical and business jargon has the power to dismiss and demobilise larger parts of your audience;
d. Too abstract: Remember that, the wider the scope, the more people tend to submit ideas that are irrelevant for your business;
e. Too narrow: Yet, if you completely limit the scope, you may miss some relevant insights;
f. Ambiguous or difficult to understand: Linguistic complexity, such as unclear or complex sentences, may make you lose your audience’s focus and attention.

One of our clients suggests as well that “communication is important, but, if you find it is too important, then all the rest is poorly structured. You cannot feed a fire just with straw. . . Guidance on how to write a good idea must go well beyond mouseover suggestions.”

Also, remember that, even if you map the right tools and needs, other factors can still undermine the success and participation in your innovation programme. For instance, you should not expect highly engaging initiatives without first planning and rolling out an appropriate communication plan, as well as adequate awards, recognition and implementation mechanisms. In the next posts, we seek to give you a hand in establishing and structuring your innovation challenges.

Diana Neves de Carvalho, Exago’s CEO/ dnc@exago.com
Francisco Bernardes, Exago’s head of Innovation Services/ fmb@exago.com

READ MORE:
A step-by-step guide to defining your innovation challenges

FROM THE START:
Your ultimate innovation challenge – what works and what doesn’t

Which innovation challenges are more easily implemented?

By analysing 164 real innovation challenges, we’ve seen how people more easily relate to – and want to have a say in – questions that are closely tied to, and disrupt, daily work routines. These are, for instance, ‘How can we develop innovative products and services at cash desks?’, ‘How can we capture younger audiences?’ and ‘How can we increase safety during installation processes?’.

Yet, when tracking challenges’ specific results, the same five macro themes to which management gives more relevance are exactly those most important in implementation. After ideation and crowd discussion, followed by improvement and approval, management and leadership embrace innovations more easily, as the higher rates of implementation show.

CHOICE > ENGAGEMENT > RESULTS

ultimate innovation challenge

This may also relate to the fact that these challenges are, by their nature, more incremental. So, management can execute the resulting ideas more easily without causing major disruption or creating higher risks, by promoting:

• Positive changes in operational efficiency, routines and techniques to improve the way things are done;
Open idea challenges, such as motivational initiatives focused on teamwork and workplace relationships;
• Ways to encourage better customer experience;
• Daily practices that cumulatively contribute to more sustainable business, with respect to the environment and corporate business strategy;
Marketing initiatives to build on brand strengths and trust perceptions, increasing sales results.

Diana Neves de Carvalho, Exago’s CEO/ dnc@exago.com
Francisco Bernardes, Exago’s head of Innovation Services/ fmb@exago.com

READ MORE:
There is a clear winner theme in ideas’ implementation

FROM THE START:
Your ultimate innovation challenge – what works and what doesn’t

ATLÂNTICO Europa reinforces innovation as a core value

Banco Atlântico Europa (ATLE) is taking a step forward towards fulfilling its resolution to innovate with a new structured idea management initiative based on Exago’s software. All this bank’s employees can now use the Idea Market platform to share and evaluate ideas and insights, building solutions for the company’s main challenges.

Innovation, ‘using constant reinvention to succeed beyond expectations’, is one of the bank’s four core values – the others being security, accuracy and confidentiality. ‘These values guide our actions, drive performance and reflect our culture,’ says Francisco Pessanha, ATLE’s head of marketing.

‘This programme is set to engage all teams in key challenges, develop innovation as a culture and strengthen relevant core values. We are also motivated to make our banking services better, faster, easier and more secure and to create stronger bridges with our customers as their needs go global,’ Pessanha explains.

Established in 2009, ATLE is a European bank based in Lisbon. Services range from savings and day-to-day banking products to trade finance and highly complex advisory solutions. Recently, ATLE was recognised for being the bank that has grown the most in Portugal, in the category of medium and small banks, and one of the 100 best companies to work for, by Exame magazine.

Lessons learnt on 164 real innovation management challenges

To see more clearly what has worked better – or hasn’t worked – with our own clients in recent, real innovation management initiatives, we’ve selected 10 with different size dimensions, from different countries and continents and a variety of sectors, including utilities, banking, health care, energy producers and telecom operators. In total, our clients have presented their communities with 164 challenges, all of which we’ve studied in detail, focusing particularly on the engagement levels and results achieved.

What works best
We’ve started by identifying the macro themes most commonly chosen by management and then looked for those that have generated more ideas and interactions. The table below shows what we found has happened.

MANAGEMENT CHOICES vs. ENGAGEMENT LEVELS

ultimate innovation challenge

Challenges that are more tangible, related to themes such as ‘operational efficiency’, ‘cost savings’ or ‘product and service enhancements’, appear to have captured people’s attention and participation more easily. Although not usually among management’s top five choices, ‘quality-focused ideas’ is also a quite attractive theme.

Understandably, these findings mean that people more easily relate to – and want to have a say in – questions that are closely tied to, and disrupt, daily work routines. These are, for instance, ‘How can we develop new products and services at cash desks?’, ‘How can we capture younger audiences?’ and ‘How can we increase safety during installation processes?’

Here’s one client insight on the topic:

‘The themes that work best are those to which the employees can relate to, reflecting their life experiences and involving solutions from which they themselves benefit from or other issues where it’s easier to have an opinion without needing deeper expertise. This includes, in our context, themes such as family, children, services at home, corporate and social responsibility, new offers and solutions and communication campaigns – our teams love this one. But this excludes issues such as more specific business services – since the business world appears a bit far away, which may not be the case in a company where customers are exclusively from this sphere – and overly technological subjects.’

But how does it relate to challenges’ specific results? We’ll see that next.

Diana Neves de Carvalho, Exago’s CEO/ dnc@exago.com
Francisco Bernardes, Exago’s head of Innovation Services/ fmb@exago.com

READ MORE:
Which innovation challenges are more easily implemented?

FROM THE START:
Your ultimate innovation challenge – what works and what doesn’t