How Has Innovation Changed Since the Pandemic? The Answer in 3 Charts
“Everything changed since the pandemic.”
At this point, my husband, a Navy veteran, is very likely to moo (yes, like a cow). It’s a habit he picked up as a submarine officer, something the crew would do whenever someone said something blindingly obvious because “moo” is not just a noise. It’s an acronym – Master Of the Obvious.
But HOW did things change?
From what, to what?
So what?
It can be hard to see the changes when you’re living and working in the midst of them. This is why I found “Benchmarking Innovation Impact, from InnoLead,” a new report from InnoLead and KPMG US, so interesting, insightful, and helpful.
There’s lots of great stuff in the report (and no, this is not a sponsored post though I am a member), so I limited myself to the three charts that answer executives’ most frequently asked innovation questions.
Question #1: What type of innovation should I pursue?
2023 Answer: Companies are investing more than half of their resources in incremental innovation
So What?: I may very well be alone in this opinion, but I think this is great news for several reasons:
- Some innovation is better than none – Companies shifting their innovation spending to safer, shorter-term bets is infinitely better than shutting down all innovation, which is what usually happens during economic uncertainty
- Play to your strengths – Established companies are, on average, better at incremental and adjacent innovation because they have the experience, expertise, resources, and culture required to do those well and other ways (e.g., corporate venture capital, joint ventures) to pursue Transformational innovation.
- Adjacent Innovation is increasing –This is the sweet spot for corporate innovation (I may also be biased because Swiffer is an adjacent innovation) because it stretches the business into new customers, offerings, and/or business models without breaking the company or executives’ identities.
Question #2: Is innovation really a leadership problem (or do you just have issues with authority)?
2023 Answer: Yes (and it depends on the situation). “Lack of Executive Support” is the #6 biggest challenge to innovation, up from #8 in 2020.
So What?: This is a good news/bad news chart.
The good news is that fewer companies are experiencing the top 5 challenges to innovation. Of course, leadership is central to fostering/eliminating turf wars, setting culture, acting on signals, allocating budgets, and setting strategy. Hence, leadership has a role in resolving these issues, too.
The bad news is that MORE innovators are experiencing a lack of executive support (24.3% vs. 19.7% in 2020) and “Other” challenges (17.3% vs. 16.4%), including:
- “Different agendas held by certain leadership as to how to measure innovation and therefore how we go after innovation. Also, the time it takes to ‘sell’ an innovative idea or opportunity into the business; corporate bureaucracy.”
- “Lack of actual strategy. Often, goals or visions are treated as strategy, which results in frustration with the organization’s ability to advance viable work and creates an unnecessary churn, resulting in confused decision-making.”
- “Innovations are stalling after piloting due to lack of funding and executive support in order to shift to scaling. Many are just happy with PR innovation.”
Question #3: How much should I invest in innovation?
2023 Answer: Most companies are maintaining past years’ budgets and team sizes.
So What?: This is another good news/bad news set of charts.
The good news is that investment is staying steady. Companies that cut back or kill innovation investments due to economic uncertainty often find that they are behind competitors when the economy improves. Even worse, it takes longer than expected to catch up because they are starting from scratch regarding talent, strategy, and a pipeline.
The bad news is that investment is staying steady. If you want different results, you need to take different actions. And I don’t know any company that is thrilled with the results of its innovation efforts. Indeed, companies can do different things with existing budgets and teams, but there needs to be flexibility and a willingness to grow the budget and the team as projects progress closer to launch and scale-up.
Not MOO
Yes, everything has changed since the pandemic, but not as much as we think.
Companies are still investing in incremental, adjacent, and transformational innovation. They’re just investing more in incremental innovation.
Innovation is still a leadership problem, but leadership is less of a problem (congrats!)
Investment is still happening, but it’s holding steady rather than increasing.
And that is nothing to “moo” at.
ThinkFuture
The Life of a Corporate Innovator, as Told in 3 Sonnets
Day 1
Oh innovation, a journey just begun
A bold quest filled with challenges, risks, and dreams,
A path of creativity, knowledge and fun,
That will bring change, growth and a brighter scene.
Do not be afraid, though unknowns abound,
For greatness starts with small unsteady steps
Take courage and embrace each change that’s found,
And trust that success will be the final event.
Remember, every challenge is a chance,
To learn, grow, and shape thy future bright,
And every obstacle a valuable dance,
That helps thee forge a path that’s just and right.
So go forth, my friend, and boldly strive,
To make innovation flourish and thrive.
The Abyss (Death and Rebirth)
Fight on corporate innovator, who art so bold
And brave despite the trials that thou hast,
Thou hast persevered through promises cold,
And fought through budget cuts that came so fast.
Thou hast not faltered, nor did thou despair,
Despite the lack of resources at thy door,
Thou hast with passion, worked beyond repair,
And shown a steel spine that’s hard to ignore.
Thou art a shining example to us all,
A beacon of hope in times that are so bleak,
Thou art a hero, standing tall and strong,
And leading us to victories that we seek.
So let us celebrate thy unwavering faith,
And honor thee, innovator of great grace.
The Triumph
My dear intrapreneur, well done,
The launch of thy innovation is a feat,
A result of years of hard work, and fun,
That sets a shining example for all to meet.
Thou hast persevered through many a trial,
With unwavering determination and drive,
And now, thy hard work doth make thee smile,
As thy business doth grow and thrive.
This triumph is a testament to thee,
Of thy creativity, passion, and might,
And serves as a reminder of what can be,
When we pour our hearts into what is right.
So let us raise a glass and celebrate,
Thy success, and the joy innovation hath created!
These sonnets were created with the help of ChatGPT
