Organizations invest in innovation for various reasons, depending on their needs and stage of development and maturity. In challenging times, innovation plays a key role in survival. Market uncertainty creates opportunities, but they only last for a short moment. Innovation is the key to seizing these chances.
The NTT Data Innovation Index study examined interest and investments in three types of innovation: core, growth, and breakthrough.
Undoubtedly, we discovered that 79% of organizations focus on core and growth innovations. Core innovations help organizations optimize existing resources for customers and/or the market, while growth innovations help them expand existing resources and develop new markets. This is a typical market behavior during uncertain times. Organizations limit spending on discretionary investments while still needing to invest in ongoing “active” investments to maintain their market position. They concentrate on core innovations.
In the study, 11% of respondents were recognized as innovators, meaning individuals who excel in innovative programs compared to others. This group allocates 10% more funds to breakthrough innovations that develop groundbreaking solutions and resources for potential new markets or opportunities. Organizations that are forward-thinking plan current investments based on future aspirations, which is a key characteristic of innovators.
It is crucial for organizations to align their innovation strategy with their business goals and strategic direction. Innovation for the sake of innovation is empty. I see a world of innovation full of successful proof of concepts (PoCs). However, these PoCs are often unrelated to the business and can distract organizations, so such situations should be avoided. If organizations don’t know what to do with a PoC after its success, they shouldn’t pursue it at all.
Another critical part of the innovation game is patience. The innovation journey—from conception, through implementation, to value realization—takes time, sometimes years or even decades. Innovative companies that are market leaders today have been created over years. Patience is therefore extremely important.
In addition to patience, organizations should also be engaged and committed. This commitment applies to both allocating resources to innovation and building organizational flexibility.
Our report showed that innovators aggressively invest in innovation. This is particularly important in the context of the rapid pace of technological progress we experience, as exemplified by the saturation of artificial intelligence technologies. Many organizations fail to keep up with these changes because they still rely on outdated technologies. Currently, most organizations are unable to implement artificial intelligence technologies into their existing infrastructure because they haven’t modernized their IT technology. Unfortunately, speed matters in today’s times. If you wait, you lose, and you find yourself in a situation where you have to catch up with others.
Innovation also involves creating discipline in building proper processes that will enable idea capture and evaluation. Our study revealed that 59% of innovators (compared to 36% of the rest of the market) stated that they have a clearly defined process for identifying innovative products and services and effectively measuring outcomes. This commitment will also pave the way for creating a culture of innovation, another key piece of the innovation puzzle. Our study showed that 63% of innovators (compared to 43% of the rest of the market) have an innovation-oriented culture.
In conclusion, to truly leverage innovative opportunities, even in an uncertain market, innovative organizations must focus on developing new markets and creating solutions for potential new markets or opportunities. These innovations should align with the strategic strategy of the organization, with an awareness that achieving full value takes time and commitment. This commitment should include proper processes and culture so that companies can act when opportunities arise. Only then will they be able to act quickly enough to benefit from these opportunities.
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