Now more than ever, companies must focus on innovation. In this interview, Accenture Chairman and CEO Joe W. Forehand explains why.
Innovation is always important in business, but haven't a lot of companies been putting it on the back burner over the past year in order to focus on retrenching and belt-tightening?
Without question, responding to the recent economic challenges has been on the minds of senior executives. And a lot of that response has focused on getting back to business basics and running the business more efficiently. Yet, as companies manage through these difficult times, it's equally important for executives to stay focused on the future and on new sources of growth. I know from my personal conversations with executives that this question of how to drive growth through innovation is right at the top of the CEO agenda.
What makes innovation so powerful?
Innovation is all about being proactive. It's about anticipating change in a rapidly changing world and developing ideas and solutions ahead of the competition.
Companies can use innovation to capture market share or expand their businesses in new directions. In fact, down markets offer a great opportunity for leading companies to innovate and break away from the competition. Companies can also apply innovation to improve internal processes, so they can operate with more speed and agility.
There's no question that innovation helps a company significantly add to the value it creates for customers and shareholders. Good ideas are at a premium, and the ability to harness innovation from those ideas will lead to better and faster business results in a fiercely competitive environment.
You often talk about "innovation delivered." What do you mean by that, and why is that important?
The way I see it, "innovation delivered" means translating good ideas into results that improve business performance. Making big ideas happen is one of the biggest challenges for executives today. I spend a great deal of my time meeting with business and government leaders around the world, and many of them are frustrated by how their organizations' best ideas often go unrealized. Not surprisingly, our market research supports this perspective. In recent interviews with senior executives, an overwhelming majority felt they often lacked the ability to shape and execute their ideas to deliver sustainable competitive advantage.
I believe the future belongs to companies that create and deliver on big ideas to transform their businesses, whether it's a new approach in an industry, a groundbreaking outsourcing opportunity or a solution driven by the latest Internet-based application. In other words, winning companies will focus their energy on bringing their best ideas to life.
Historically, efforts to boost innovation have often provided more in the way of platitudes and slogans than actual results. What can executives do to make innovation real in their companies?
First and foremost, invest in your people. People are your innovation engine - they connect a company to its customers and the marketplace.
To make innovation real, companies need to foster what I call "corporate entrepreneurship." This comes by encouraging collaboration. Good ideas can come from anywhere in an organization, and turning them into results typically involves many people from different parts of an organization.
I'd also suggest that companies need to balance operational efficiency with innovative thinking. They need to support their people with the funding, tools and freedom to pursue good ideas. Think of setbacks as investments in the future. Clearly, executives always need to manage risks - and they need to be right a …