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
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
4. Strategy, planning and innovation need to be better
There should be a closer relationship between innovation and overall
organisational strategy. Our interviews showed that many organisations are not
linking long-term strategic objectives with the innovation activities needed to
achieve them. Such a linkage would help leaders develop and communicate a
clearer innovation agenda for their organisations.
5. The external environment can be a rich source of
The external environment can be a rich source of reasons why an organisation
needs to innovate. Some of our interviewees found it difficult to view the
outside world from this perspective. Improving the ways in which organisations
scan and project their external competitive environments will help to support
the quest for innovation.