A recent report by Accenture has found that fewer than one in eight companies govern innovation extensively. More importantly, those that do have achieved twice the revenue growth of those that don’t.
The report, which examines how innovation is and will likely be governed in the future, found that only 12% of companies govern innovation extensively.
In doing so, they achieved a compound annual growth of 5.9% (CAGR), on average.
This is almost double that of the remaining 88% of companies that govern innovation more haphazardly. The report analysed data from 2013 to 2018 and found that these companies achieve 2.9% CAGR, on average, almost half the revenue growth of the highest-performing companies.
Findings of the same report also show that 84% of executives surveyed said they direct innovation centrally, meaning that it is overseen by a Chief Innovation Officer or an innovation committee. However, it might not be enough.
“While many see innovation as a creative force that can’t be controlled, our research reveals that a systematic approach to managing innovation and governing it extensively can provide tangible financial impact,” said Paul Daugherty, Accenture’s chief technology & innovation officer.
The report was based on a global survey of executives at almost 1,100 companies, along with a financial analysis and in-depth interviews with innovation experts in business and academia.
Its goal was to determine how organisations apply different types of innovation across their business portfolios, identify how they allocate innovation investments, and help executives understand how to govern more strategically across their business portfolios to get greater value from their innovation investments.
Diana Neves de Carvalho, Exago’s CEO
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