The days when innovation was mainly a sequestered process are decidedly gone. Companies are seeking the right mix of employees, customers, technology partners, and other contributors to push their thinking in novel directions, leading to innovative ideas and solutions.
Innovative companies aren’t going it alone. Instead, they’re pushing the boundaries of innovation both inside and outside their organizations by breaking down traditional silos and tapping a much wider ecosystem for ideas, insights, talent and technology, and incorporating the customer throughout the innovation process.
More-inclusive operating models, such as open innovation, design thinking, and co-creation with partners, customers and suppliers, are now all embraced ahead of traditional R&D, and by a wide margin—almost twice as many companies favor these models.
"When you’re trying to design and implement a new way of working, you really need a feedback loop,” says Eddie Copeland, director of government innovation at Nesta, which routinely conducts innovation workshops with employees, end users, and other stakeholders. “And that feedback needs to come from all the people involved, and not just what senior management thinks is the right thing to do."
But adoption of these ascendant innovation models does not mean R&D has scant use. As Rachel Nguyen, executive director of Nissan Future Lab, points out, R&D will remain a critical part of the mix: “When we’re talking about mobility and the future of electric, connected, and autonomous cars, there’s so much research and then development that needs to be done to create that future.”
Over one-third of innovating companies say that customers are their most important innovation partners. And the majority tell us that their customer engagement strategy helps define innovation requirements from the early ideation phase.
Businesses expect this approach to pay off: Those applying customer-engagement strategies that use design thinking and user-driven requirements from ideation to product/service launch are twice as likely as their peers to anticipate growth of 15% or more over the next five years.
Real-time customer engagement, in particular, is playing a key role in innovation. Says Nissan Future Lab’s Rachel Nguyen, “As our vehicles become smart products, we’ll start to see more of that real-time customer engagement, where we can really mash up what’s happening in the vehicle in real time with big data.”
Director, Global Lead for Innovation Benchmark, PwC US