• Innovation is slow; only three per cent of the UK’s largest companies can get a new idea to market within six months
• Three-quarters rely on fading revenue streams
• More than a quarter of leaders fear their business model will be unsustainable by 2017
• Yet complacency rules; 94 per cent are satisfied with their innovation pipeline
Major UK companies are in dire need of innovation, but leaders are failing to deliver, according to new research from ?What If!.
Almost three-quarters (72 per cent) of leaders of the nation’s largest companies confess their organisation relies on fading revenue streams. Worse still, more than a quarter (28 per cent) admit their current business model will no longer work by 2017.
Despite depending on innovation for both growth and survival, an extraordinary 94 per cent of UK business leaders are satisfied with their current innovation pipeline.
These same businesses suffer from slow processes, taking, on average, more than 19 months to get an idea to market. More than a third (38 per cent) of leaders also admit they do not know where a significant proportion of their 2014/5 revenue will come from.
Matt Kingdon, co-founder and co-chairman of ?What If! comments:
“Despite recognising the acute need for innovation, most corporate leaders are struggling to create the conditions for new ideas to thrive. With a few notable exceptions, our research shows efficiency-focused leadership, disconnected structures and laborious processes are stunting hopes of an innovation-led UK recovery. Swift action is needed to generate sustainable economic recovery."
Three-quarters (74 per cent) of leaders recognise fast-changing market conditions are forcing companies to reinvent themselves quicker than ever. In a sign of how deeply corporates rely on innovation, leaders say on average 41 per cent of their 2013/4 revenue came from products and services new to the market in the last year.
Eyes Wide Shut released today (Monday 28 April 2014), ahead of an innovation summit in London on Tuesday, is based on interviews with 400 CEOs and senior decision makers and directors in large UK organisations across ten industries. The full report by strategic innovation consultancy ?What If! will be available at www.whatifinnovation.com/
Key problems identified in the report include:
Failing to lead for innovation
More than half (57 per cent) of the UK’s top business leaders concede their management team is failing to lead effectively for innovation. Another three in five (60 per cent) leaders believe those at the top do not understand their customers.
Built to operate not innovate
UK firms say they are about to switch from efficiency to growth and yet more than two-thirds (68 per cent) of leadership teams are considered better at delivering bottom line efficiencies than top line growth.
Damaged by disconnection
Almost two-thirds (58 per cent) of business leaders believe their teams have no problem coming up with ideas, but 62 per cent claim it is almost impossible to gain support to test and develop these new concepts.
Bureaucracy stops innovative ideas before they reach fruition in (59 per cent) of the UK’s major companies, while silos also play their part. More than half (53 per cent) are missing out on innovation opportunities because employees cannot see the bigger picture.
Matt Kingdon adds:
“During a recession the priorities are clear; drive costs down, minimise risk and just carry on, but as we enter recovery British businesses must innovate harder than ever, or be outpaced by the competition.
“The economic sun has risen on a very different landscape to the steady growth of the boom years. New technologies, rapidly adapting customer behaviours and globalisation are speeding up market changes and handing the advantage to nimble businesses who can innovate fast. Large companies, whose size was once considered a guarantee of survival, perhaps even a ticket to dominance, must respond quickly and with courage, to maintain their relevance and grow.”
- Ends -
Notes to editors
For a copy of the report, more details about the research findings, or an interview with Matt Kingdon, please contact:
Vicky Welstead or Julia Burns at Man Bites Dog
0844 561 1416
About the study
The ?What If! study Eyes Wide Shut is based on the views of 400 leaders from the UK’s largest businesses. Interviews were conducted in 2014 with CEOs, directors and senior leaders from ten industries: banking, energy, FMCG, healthcare, insurance, manufacturing, media, professional services, retail and telecoms.
The study is being launched at ?What If!’s innovation summit on Tuesday 29 April 2014. Panellists include Stella Creasy, Labour MP and Shadow Minister for Business, Innovation and Skills and Will Hutton, political economist and former editor-in-chief at The Observer. NEW STUDY: Three in four UK corporates rely on dying revenue streams