In today's 24/7 global business environment, in which competition can spring up anywhere overnight and product life cycles are increasingly abbreviated, innovation is a prerequisite for continuing success and long-term survival. New research from the Institute for Corporate Productivity (i4cp) and 3M Corporation shows that 70% of companies believe innovation is more important today than it was just two years ago.
But research highlighted in the new report, Innovate or Perish: Building a Culture of Innovation, shows that most companies are missing opportunities to drive innovation, most notably during the hiring process. (non-members: download our Leadership Through Innovation white paper, which features excerpts from the full report)
While selecting the right people to spark innovation is widely acknowledged to be critical, the top methods for recruiting and selecting creative people are not being utilized by most companies. People who are innovative and creative tend to know other people of like mind - referral programs that emphasize innovation have the highest correlation to market performance (.19), meaning companies who do this typically have higher revenue, profitability, market share and customer satisfaction than their competitors. However, less than 7% of respondents from all organizations use referrals to attract innovative people.
Also, searching for and tracking innovative people in graduate school and in other organizations has a high correlation with market performance, but less than 15% of high-performance organizations employ this strategy.
Beyond talent acquisition practices, most organizations admit that they are not doing a good job of managing innovation internally - and only 31% of companies say a culture of innovation permeates their culture to a high extent.
High-performance organizations are more than twice as likely (44%) as lower-performers (20%) to embrace innovation. More telling, these companies have cultures that lead to greater innovation through reward and leadership practices, as well as approaches to processes and metric tracking.
Innovate or Perish: Building a Culture of Innovation explores what high-performance organizations are doing differently in each of these areas, providing a framework for other organizations to build off the successes of the most innovative companies in the world.
"This i4cp/3M study is important because it looks at innovation broadly, not as a feature of product development but as a very human endeavor. Innovation must permeate through every facet of a company, from customer service to human resources," said Karen B. Paul, Ph.D., Manager, Talent Assessment, 3M. "Human capital functions such as HR play a significant role in making innovation systemic, but how often do you hear about their involvement? This study helps to tell the story of both critical aspects of an innovative culture and the role Human Resources plays in facilitating culture development."
Innovate or Perish: Building a Culture of Innovation is now available to corporate members. Non-members may download our Leadership Through Innovation white paper.