"Accenture believes that High Performance Innovation is not about finding a single idea, but about achieving execution excellence in Innovation by being right and being fast through a comprehensive approach to Innovation performance."
Where AEX companies lack innovative strength, successful start-ups turn their creative power into groundbreaking ideas. In exchange for operational knowledge and capital, large companies can get inspiration from these starting businesses.
Innovation is vital. Not just for organizations, but also for countries and regions. Globally, the lifespan of companies is decreasing and international relations are shifting. In the past, most of the innovative ideas came from Western European countries and the United States.
However, emerging markets such as the BRIC countries are investing heavily in innovation, resulting in twice as many patents as before. These economies used to focus on Western ideas (and countries), but this is changing rapidly. Consider the IT market; currently, most of the software development of large IT companies (and other multinationals) is outsourced to highly qualified engineers in India. Therefore it’s not surprising that innovation is moving to these areas.
The geographical shift is also noticeable in the investments in public and private partnerships. In the Netherlands the investment is near twenty Billion Euros, while in India it is near two Trillion Dollars. Although India is a much larger country, the size of investments underlines where most growth currently occurs.
As we approach the end of 2012, it’s a good time to look back and review all of the great content that’s been published the past 12 months. It’s been a busy time in the world of Innovation, Analytics and Digital, considering everything from different ideas about the key ingredients for successful innovation to shifts in the way consumers engage with social networks and mobile devices.
Below are a few of the best articles we’ve seen published this year.
Top 10 Challenges for Investment Banks 2012 Investment banks are increasingly operating in a volatile, resource constrained and highly regulated environment. Rigorous focus on strategic and operational priorities provides the key to high performance. Complying with new and impending regulations presents major challenges for investment banks.
To help investment banks plan and execute with success as macro trends reshape the industry, Accenture has developed a list of the top 10 challenges to address in 2012.
The responses to a poll Accenture ran on LinkedIn revealed that people have very different ideas about the key ingredients for successful innovation. A full half of the respondents believe that understanding customer challenges is the key, while another third believe it is essential to embed innovation in an organisation.
The truth is that all of these play a role in successful innovation. But is there one element that is so crucial that without it successful innovation would be impossible?
The importance of Data Governance Does your company consider its data to be a strategic asset? More important, do you not only consider it to be an asset, but are you also treating it as any other asset?
In my 20 years of experience in Data and Information Management, I worked for companies, who claimed to understand the importance and potential value of their data, but struggled to live up to this understanding. And, up to today, many companies I visit are still not taking full benefit of the wealth of information that is stored in their systems.
Are you moving fast enough in Digital? As the world is changing rapidly, organizations need to stay in the game by investing in digital capabilities. But many organizations find it difficult to predict the expected ROI, resulting in little investments and lack of innovation.
Digital is radically changing the traditional ways organizations interact with customers. Customers are willing to interact with organizations via social media, and expecting them to be out there too! Therefore the question is no longer how fast things are moving, but: are you moving fast enough?
High Performing Business in changing economic times
In this volatile, uncertain and increasingly complex world, many businesses and governments have an urgent need to reassess current strategies and vital capabilities to achieve high performance.
Companies that want to stay in business need to make concrete plans for the future, with little room for errors. After all, companies will need to keep launching successful business concepts or products to outperform their rivals in these challenging times.
In our last blog post, we looked at how parent companies and the spin-offs themselves cut their own chances of success, by smothering a spin-off in cash or IP, by not listening to their market and, basically, or being in too much of a rush to generates sales. However, our study (see below) also found a lot of spin-offs that avoided these pitfalls and went on to become highly successful companies in their own right.
So what are the success factors for a profitable spin-off and a growth engine for the future? Our study identified five main guidelines:
1) Keep them hungry Spin-offs often receive a lot of initial financial capital from their parent companies as well as from public funding programs. Both can actually hamper the successful development of a spin-off. On the other hand, limiting the amount of capital forces a spin-off to sell products at a profit. Profit that provides it with the capital necessary for further investments.
This has three motivational advantages. First of all, selling products shows that an actual need is being met and so the spin-off is listening to the market. Secondly, limited resources means time-to-market has to be as short as possible. And thirdly, the need to acquire capital for investments ensures that the focus remains on profit rather than volumes for volume’s sake.
In their search for sustainable and profitable innovation, many companies opt for a strategy that involves launching a spin-off to focus on undeveloped markets. These strategies have enormous potential but also carry huge risk. After all, they often involve a new technology and products for totally new and unknown markets. And sadly, many of these spin-offs fall at the first hurdle.
As we touched upon briefly in our last blog post, the reason why so many spin-offs fail is that their chances of success are undermined by the generosity of the parent company itself. The parent company’s urgency to develop a new engine for growth can have a disastrous effect. Because the spin-off is given such large quantities of capital, both intellectual and financial, it is less likely to listen closely to its potential market and the time-to-market gets longer.
This can be exacerbated by the skill of the top entrepreneur – the newly-hired CEO – to attract additional capital. This kind of spin-off will simply develop a product and/or service based on the large amount of cash and intellectual property (IP) available and put it out to market; a typical push method. This often fails, particularly in new markets, as the company has failed to listen to its market and to create any ‘pull’ demand for its product or service. And the fact that the spin-off is given so little time to develop and grow is a major limitation of its chances of success. What might have been a hit is transformed into an almost certain miss.
So what is the key to success? Our study (see below) found that most successful spin-offs had a number of things in common. The three most prevalent characteristics we found are the following:
During the TSOC Pitch 2012 event on November 21th the main question was which Dutch innovative products have the potential to become real game changers and transforms the telecom market.
With in total 12 start-ups, including several Accenture Innovation Awards initiatives (i.e. Greencloud, Scoupy and LocalSensor) the event kicked-off with Accenture’s Senior Manager and CMT lead Erik Hoogenhout analyzing the current state of Innovation in the Netherlands. First he discussed the Accenture HPB research which compared the performance of AEX companies with their international competitors, stating that the AEX companies have invested much less in innovation in the previous years than their international peers, resulting in a weaker market position in emerging markets and decreasing revenue growth. Furthermore he discussed the major trends he has seen in this year’s Accenture Innovation Awards concepts, including an increasing number of businesses focused on creating platforms for content and innovation, and the embracement of Cloud computing industry-wide.
Most companies now recognize just how important innovation is to continued profitable growth. The challenge is how to innovate successfully, not just once but again and again. Because real innovation demands constant and continuous renewal, which is hard to realize within an established enterprise.
Many companies see the spin-off as the holy grail of successful innovation. In a recent study on spin-offs in the biotech industry, Accenture and Utrecht University looked at hundreds of examples of how major corporations have launched ‘innovative’ spin-offs only to see them flounder and fail. And discovered some very important lessons about how companies can avoid the pitfalls that doom so many spin-offs to failure.
It’s an all too familiar scenario. After years of success, a major company sees its margins decline and its growth slow. It desperately needs a new engine for growth and because the company is so big it has to be a very big engine. So the management decides to launch a spin-off company to focus on unchartered markets, because these are the only markets with the potential for real, sustained growth. So far so good. The spin-off can operate away from the constraints of its parent company and its often cumbersome organizational structure.
Keep ‘em hungry
However, the first mistake many companies make, we found, is to throw resources at the new spin-off in the form of cash and intellectual property. There’s a lot of pressure for quick results, so apparently the new company needs lots of cash. For one, to hire a high-profile CEO with a proven ability to attract even more investment. But all too often the expected success fails to materialize and the spin-off is a massive – and costly – failure.
So why is it so difficult to launch a successful spin-off and why do so many companies fail? What emerged out of our joint study was that having a generous parent company can be as much a hindrance as a help. The study revealed some of the success factors behind profitable spin-offs. For instance – and this shouldn’t be a surprise – successful spin-offs listen to their markets and have short times to market. Successful spin-offs are patient in terms of growth, but tend to be very impatient for profit.
Of course, this still leaves the question of how can companies create the right conditions for a successful spin-off? The first recommendation sounds counter-intuitive, but may come as a pleasant surprise to many companies. Keep your spin-offs hungry in terms of capital funding!But do make sure they have the right people equipped with the right skills to deal with new technology, new products and new markets. And be patient. You cannot tap truly new markets overnight; spin-offs should be given the time to explore their markets and discover their customers’ real needs.
We’ll be exploring these success factors and the recommendations to companies looking to launch a spin-off in more detail in my next two blog posts.
Masters thesis For his Masters thesis, Tim Agterberg studied the development of various types of start-up companies in the Dutch biotechnology sector. Tim conducted the study during an internship with Accenture, under the guidance of Accenture’s Jeroen Hendrix and Dr. Jan Faber, associate Professor of Innovation Studies at the Copernicus Institute of Sustainable Development, Utrecht University. The study analyzed 540 cases spread across four years, in the period 2002-2005.
With live national radio coverage on BNR Nieuwsradio, 1441 innovative entries and 32000 social votes, the sixth edition of the Accenture Innovation Awards was an even bigger success than last year’s edition. In the Amsterdam Convention Factory over 900 guests joined Accenture in recognizing and rewarding the most innovative concepts in the Netherlands with the Blue Tulip. This year, for the first time in Innovation Awards history concepts could also compete for a special award for the most sustainable innovation: the Green Tulip.
Aiming at honoring, uniting and stimulating innovation in the Netherlands, keynote speakers Wouter van Dieren (Club of Rome), Mike Lee (Appsterdam) and Andre Kuipers (Astronaut ESA) shared their thought and vision on sustainable innovation. Wouter van Dieren kicked-off the event by stating that there are limits to growth, developments and innovations of industrial capital and agriculture. By changing the rules of ‘Business as usual’ organizations can take natural and social capital in consideration, instead of mainly focusing on financial capital. Andre Kuipers took the audience on a breathtaking journey in the life of an astronaut, his daily practices and his experiences during Mission ISS earlier this year. He demonstrated the vulnerability of the Earth Read more…
When Accenture launched the Accenture Innovation Awards (AIA) six years ago, one of our goals was to encourage and promote innovation. The AIA did indeed create a platform for numerous truly innovative concepts from both major corporates and young start-ups. And many winners have gone on to become extremely successful. And yet it is still remarkably difficult for businesses to innovate successfully. This is why Accenture teamed up last year with the University of Groningen to define the so-called ‘Barriers to Innovation’ and identify the differences between AIA winners and non-winners. And to find out whether winning an Accenture Innovation Award offer entrepreneurs tangible benefits?
The study carried out by the University of Groningen in cooperation with Accenture identified six potential barriers to innovation: the cost, financing, HR, marketing, competition and external information barriers. More importantly, the research revealed some striking differences between award winners and non-winners, not just in how they overcome barriers to innovation, but also in their perception of these barriers.
As you can see from the figure above, the study revealed that non-winners recognized more of these barriers than the winners of the awards, especially the cost, financing, information and personnel barriers. They perceived these barriers, or combinations of these barriers, much more as obstacles to future growth than winners. The winners, on the other hand, recognized barriers much more unique to their business, rather than being confronted with a range of barriers simultaneously, so are able to take a much more focused approach to overcoming such barriers.
New connected technology is empowering people, businesses and organizations all over the world to drive personal and societal change on a local and global scale. Due to the Internet people have an increasing awareness of issues and social media is providing a stronger ability to take action. Today’s big challenges can not be solved by one company or one industry anymore, because a new notion of ownership has emerged: people are taking matters back into their own hands as they realize that everyone can potentially fulfill a role regardless of their position or location. Now everyone has the power to do things for themselves on an even greater scale.
How can businesses in other sectors successfully apply top innovation and creativity processes used by Dutch and international creative industry professionals?
During the PICNIC Innovation Mash Up on May 15 the main question was how businesses in traditional sectors can learn from the creative industry to successfully launch new products and services, and connect with their customers for sustainable grow. Approximately 165 participants representing different organizations and sectors from over the world joined this one day active learning event featuring design thinking, scenario planning, crowdsourcing, service innovation and open design.
Harmen Werkman: Je noemt drie seizoenen maar toen wij in Februari aankwamen was het dus eigenlijk nog winter. In Pune was dat al genieten en in Hyderabad...Read the full comment
Where AEX companies lack innovative strength, successful start-ups turn their creative power into groundbreaking ideas. In exchange for operational knowledge and capital, large companies can get inspiration from these starting businesses.
Loading ...
During the TSOC Pitch 2012 event on November 21th the main question was which Dutch innovative products have the potential to become real game changers and transforms the telecom market.
Most companies now recognize just how important innovation is to continued profitable growth. The challenge is how to innovate successfully, not just once but again and again. Because real innovation demands constant and continuous renewal, which is hard to realize within an established enterprise. 
New connected technology is empowering people, businesses and organizations all over the world to drive personal and societal change on a local and global scale. Due to the Internet people have an increasing awareness of issues and social media is providing a stronger ability to take action. 
