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Innovation: Innovation by Tweaking may not be 'Low Risk'
93 percent of organization agree that innovation is a key to the future of their companies. The problem is that innovation isn’t easy. A survey by Accenture found that only 18 percent of businesses following a strategy of innovation were satisfied with their results. And that in turn has led many businesses to attempt ‘low-risk’ innovations — making only small tweaks to improve their current way of doing business. Accenture found that about one-third of companies have followed this low-risk road of innovation. But those companies may ultimately lose big by adopting this overly risk-adverse approach to their businesses.
The Accenture report found that the number of businesses that were experimenting with the introduction of new product categories fell from 42 percent in 2009 to 27 percent this year. Accenture attributed this to companies trying to take a “low-risk” approach to their businesses. Just following the status quo was viewed by these companies as a safer strategy than attempting something new, but Accenture thinks that, from a risk management perspective, failure to grow new products is actually much riskier than focusing exclusively on what’s working for you today.
Wouter Koetzier, managing director for Innovation and Product Development at Accenture, said that “Many companies take a low-risk approach to innovation that can jeopardize results because they lack a prudent, disciplined approach for innovation risk management. It’s a situation compounded for many by an inability to rapidly scale inventions. However, the research suggests that those companies that have a formal, end-to end management system to nurture, scale and launch innovations tend to be more satisfied with their results as they achieve stronger outcomes.”
What barriers are businesses finding when they attempt to innovate?
- 30 percent say that guessing what the future trends are is difficult
- 26 percent say that they can’t secure enough budget support for acquiring and leveraging new technology
- 24 percent say that it’s hard to transform new ideas into marketable goods and services.
