With the global economy facing its toughest test in over 60 years never has it been so important for companies, large and small, to innovate and grow. Whilst few business leaders would argue with this statement, research has highlighted the difficulty that businesses face in developing commercially successful, innovative products and services. It’s well documented that between 80-90% of new product launches fail and whilst 80% of business leaders believe that innovation is important 65% are dissatisfied with their ability to innovate. To understand why successful, innovative products and services appears to be so elusive we conducted original research amongst a sample of UK based companies. The aim of the research was to identify how companies generate potential product ideas and what barriers they face in taking these ideas to the next stage of development. The results showed that whilst small and medium sized companies recognized the importance of innovation they did not have formal processes for generating ideas. In contrast all respondents from large companies reported that their organizations did have formal documented processes for innovation activities. Worryingly, all companies failed to use a sufficiently wide range of research tools to identify customers unmet needs. Another key area of the research was regarding barriers to innovation. Perhaps unsurprisingly, cost was considered to be the greatest barrier. Several of the other top and middle tier barriers to innovation were: lack of communication between departments; senior management; politics; poor decision making processes; and incomplete scientific or technical understanding. These barriers are directly rectifiable by putting specific transparent front end innovation processes in place. Although these problems are likely to differ between different industries the use of some innovation methodologies such as technical forecasting would help in the strategic decision making process. These findings suggest that both SMEs and large companies have gaps in the quality of their innovation systems which present a significant risk that the new products they develop may meet with commercial failure.
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