Challenges to Innovation Strategy
In the study, entitled “Innovation Reignited,” innovation ranks as the number one strategic priority, with 82% of C-suite leaders expecting new product/service development to become even more important over the next three years. Yet at the same time, 60% of survey respondents said their organizations are not effective at generating and executing innovation.
The newly published report, conducted by Market Logic, Ipsos, and Alchemy-RX, reveals various gaps in execution of innovation but at the same time offers some takeaways for companies to deploy in the aim of reinforcing innovation readiness. The C-suite research on innovation surveyed 250 CEO’s and senior executives working in CPG, healthcare, and other industries.
The survey also found that innovation isn’t meeting launch goals (93% of executive leaders stated in the survey) and isn’t reaching its revenue potential, with only 1/3 of leaders stating that innovation will generate over 20% of revenue over the next three years. Artificial intelligence is sometimes seen as a “silver bullet” to these issues, but the survey also found that while the majority agree that AI will be extremely important to innovation over the next three to five years, only 32% of AI users report improved idea generation and innovation.
Other key findings of the study include detailing the challenges to innovation, which include not enough or not the right insights; underestimating or underdelivering differentiated innovation; and de-prioritized or non-strategic innovation management.
In fact, the study also noted that 75% of innovations fail to meet expectations because they are disconnected from the consumer.
Bringing Insights to the Forefront of the Ecosystem
Another key finding of the study is that while AI has helped companies gain data, there is also the common refrain of “drowning in data.” About 91% of respondents said the sheer volume of data has limited their organizations’ success. Barriers to meaningful innovation include that not enough insights from that data are available to develop more ideas and that there is a lack of understanding the consumer as a result.
But if there’s a silver lining here for innovators, it’s that many companies can find their pathway back to innovation growth—with the help of AI, insights and market research. Investing in insights, data and research as strategic capabilities is one key avenue to success. The companies’ research signals that you can recommit to innovation in steps such as:
- Use your Data as Raw Material: Invest in tools and talent to make sense of data across sources. Learn what metrics matter most. Leverage AI to synthesize and surface patterns.
- Invest in Strategic Consumer Research: Build a roadmap with the right research partner to uncover motivations, barriers, unmet needs and white space – using sound methodologies, not shortcuts.
- Synthesize Across Datasets: Layer data to uncover true insights – market share + consumer qual + trend reports + brand performance. Use technology to centralize this and foster cross‑functional discussions around what it means.
- Flex your Insight & Foresight Muscle: Create the conditions for insights to be uncovered, shared, and acted upon. Embed insights into strategic planning. Raise the standard of what qualifies as an insight. Teach your teams to look for contradictions, patterns, and opportunities. And don’t stop there; look forward to plausible future scenarios with foresight.
- Ideate from Insight: Use your insights to spark ideas. Build ideas that solve real consumer problems in new, compelling ways. Provide incremental and new value to consumers, relevant to their needs and different from how they solve for it today.
Managing Innovation Through Differentiation
The research report from Market Logic, Ipsos, and Alchemy-RX also examines the role of differentiation in product innovation as well as innovation management structure.
Standing out and differentiating innovation has never been harder to achieve or mattered more than in this current environment of AI “slop,” as some have termed the phrase. Differentiating from the competition and having unique products that stand out to consumers remains a relevant focus for CPG companies and beyond. But the lack of differentiation remains a key barrier to meaningful innovation.
The survey again points to the potential of insights to make a difference in overcoming these barriers. Only 45% of respondents selected consumer research as the place where innovation ideas come from. That’s a significant disconnect but that gap also signals an opportunity for growth.
Aligning business strategy, brand positioning, and innovation efforts can help build that innovation funnel and drive growth. Additional recommendations from the report include:
- Set clear goals for innovation.
- Audit and risk-adjust your funnel.
- Distinguish renovation from innovation.
- Generate more (and better) ideas.
- Manage innovation as a system.
The research report makes the case that innovation-led growth has stalled a bit in today’s market. These barriers are making companies pull back on innovation. But insights can prove to be a powerful tool to stop this decline. The researchers advise: “This is precisely when innovation matters most. It’s not just a response to opportunity, it’s a defense against decline.”
Video: “Innovation Reignited: Why CEOs can’t afford to stand still,” courtesy of Ipsos.
