How the most successful organizations innovate

Innovation is alive and well. As documented in the 2013 IBM Institute for Business Value executive report, “Insatiable Innovation: From sporadic to systemic,” outperforming organizations combine product, operational and business model innovation to thrive in a challenging and complex environment.

Continuing along that theme, a new study, conducted by the IBM Institute for Business Value and the Economist Intelligence Unit, reveals that these outperformers actually approach innovation differently from other organizations. Analysis of responses from more than 1,000 C-suite level executives reveals that three separate categories separate outperformers from the rest:

1. Organizational structures and functions that support innovation – The most successful organizations align innovation activities directly with business objectives, pursue “open “innovation structures and create specialized innovation teams.

2. Cultural environments to make innovation thrive – The most successful organizations maintain a clear focus on innovation across all business activities, encouraging innovative behaviors and finding ways to sustain innovation momentum.

3. Processes to convert ideas into innovation – The most successful organizations source new ideas from diverse locations, often leveraging big data and analytics; innovation is funded separately and measured rigorously.

However, the nature of innovation is changing. Innovation has become more open and increasingly occurs within economic ecosystems. Innovation today often involves teamwork and collaboration. While the “magic” of innovation still exists, breakthroughs are driven by science and numbers, data and insight. For today’s business leaders, innovation is more than magic – it is the art and science of anticipating the future. It is about understanding what the full potential of new technolo-gies will be, of knowing what customers need and want, even before they know it themselves. And it is about building organizational and ecosystem-wide capabilities to execute and deliver. Successful organizations align innovation activities with business objectives, and they are not afraid to experiment. They see innovation as a critical business process, an enabler and a cultural imperative.

The new executive report created from the analysis of study responses identifies and documents clear steps for all organizations to adopt those elements of innovation strategy that differentiate outperformers from others.