The research is based upon 20 interviews conducted with corporate leaders.
The researchers used cognitive mapping processes and coding techniques to help
to "get inside the minds" of members of leadership teams to see how they
personally thought about innovation and their roles in building the capacity
for innovation in their organisations.
The corporate leaders worked in a range of industries, but a special emphasis was placed on conducting research within the financial and professional services sectors. Of these 20 interviews, insurance operations represented 40% of the organisations analysed, banks and investment banks 20%, professional services firms 30% and other industry sectors 10%.
The key findings from the report are:
1. Strategy and innovation are changing
There is a strong recognition that traditional sources of competitive advantage such as cost reduction and product differentiation are changing. For example, technology is now enabling all competitors to achieve the same cost position. A key task for corporate leaders is therefore to broaden their organisations' approach to innovation and to find new foundations for strategic success.
2. Financial services firms need to be on top of new approaches to
innovation in use elsewhere
This is particularly relevant to financial services firms that face a the prospect of two perfect storms - increasing regulation and stagnating growth. Clearly, new thinking about innovation is needed: one that goes beyond simply products and internal processes. Greater consideration should be given to innovation in the fields of customer experiences - how the process of inter-acting with customers differentiates an organisation, exploring distribution routes and seeking out new markets. A major challenge is to create a culture that increases awareness and knowledge of a broader range of innovation approaches.
3. Cost reduction and M&A are innovation
There has been an historic focus, in many organisations, on bottom line growth through acquisitions and reductions in expense base. Some corporate leaders were concerned that this approach had robbed their organisations of the capability to support the forms of innovation necessary to enable more organic growth.