There is a lot of content in the blogosphere about innovation theory and how to innovate. One of the basics of innovation is considering new perspectives. With that in mind, we dug deeper on sentiment from leaders on the topic in a recent survey by Insigniam.

The 2012 Insigniam Executive Sentiment Survey asked executives to think about their biggest concerns around innovation and to also define what it means. As would be expected, executives understand that innovation is key to growing their business, but showed a wide variety of semantics and opinions on how to define it.

In addition, we uncovered an interesting correlation between the prevailing definitions of innovation and where people, behaviors, and culture fit into the executive mindset. Overall, the general theme of comments either pointed to or circled around defining innovation in terms of “process” or “product.”

How executives define innovation

We asked executives to tell us how they define innovation. Their answers fell within six categories:

  • Process: internal processes, procedures, and practices
  • Offerings: product or service offered in the market
  • Strategy: business model, funding, or partnerships with other firms
  • Marketing: manner of delivering value message in the market
  • Ideas: related to the concept of new ideas, irrespective of domain
  • Change: using the word “change” or referring to the concept

How CEOs define innovation?

Offerings were the primary definition for CEOs, followed by process at 36%. Ideas, strategy, and marketing made up the rest of the CEO answers, all at 7%.

There were some regional differences. 67% of respondents in India defined innovation as offerings, followed by Europe at 46%. The U.S. divided its definitions between offerings and process at 38% each.

We saw responses from executives that showed they believe innovation means:

  • Bringing new value to their customers that makes their lives better,
  • Being the first in the market to be different, and
  • Creating new ideas and ways of working.

Innovative processes and innovative products and services were important to respondents when defining innovation, but innovations are reliant upon people and culture across an organization. For example, innovation efforts that gauge success by project milestones and reward people for the process of managing ideas into a pipeline won’t cut it—the footprint of change to make innovation yield long-term results is across many fronts.

Lack of innovation, or need to shift momentum in innovation, cannot be cured by processes and programs alone—it requires holistic, meaningful, and lasting levels of change with the beliefs, perspectives, assumptions, and presuppositions of the people in the enterprise.

Insigniam sees the call to action as to how to bring people and process together to create a culture and speed with an output of timely, innovative products and services.

The survey points to a high state of awareness by executives as to the underlying obstacles to innovation created by their teams or organizational status quo—unless of course the status quo is innovation itself, such as one might see with companies like Nike or Apple. There is an interesting, indirect tie between responses on forward-facing frustrations and the weight of the importance that innovation serves in executives’ forward view.

Insigniam’s experience globally has shown that complacency, organizational culture, and a lack of innovation have a symbiotic relationship. Treating innovation as a “program” to fix processes, for example, won’t yield sustainable results from innovative thinking unless the underlying frustrations expressed by executives are tackled as well.

How important is innovation to competitive advantage?

Well, the response may seem obvious – but experience shows many organizations are lacking in innovation. 78% of executives believe that innovation is very important to their ability to succeed and strengthen competitive advantage in the next one to three years.

People, product, or process?

The biggest frustrations and biggest concerns shared in our survey were focused on “people.” Executives are clearly worried about teamwork, leadership impact in driving innovation efforts, and productivity. They are frustrated with employees who are complacent, employees who are cynical, and employees who have issues with the culture of the organization.

This survey indirectly showed that there is a potential disconnect between how innovation is defined [and manifests itself] and the steps needed to deal with the frustrations with employees who need to have the conversation that drives innovation for competitive advantage.

By first focusing innovation on factors such as shifting company culture (the beliefs, perspectives, assumptions and presuppositions underlying the mindset of the people) and thereby elevating performance and people development, organizations can realize sustainable enterprise-wide transformation, which positively impacts both process and offerings without ignoring the key factor that people are the most important element.

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