Introduction
Innovation is a top priority for many publicly listed companies, yet few have structured, effective strategies to turn ambition into results. While CEOs and executives recognize the importance of innovation, studies reveal a persistent gap between intent and execution.
So, how many stock-listed companies actually have formal innovation strategies? Are these strategies effective? And do company leaders truly invest in them? This article explores the current state of corporate innovation and what organizations can do to close the strategy-execution gap.
The Growing Commitment to Innovation
The importance of innovation in corporate strategy has steadily increased over the years.
- A report by Boston Consulting Group (BCG) found that 75% of companies placed innovation among their top three priorities, marking a significant increase from previous years.
- Another study showed that 83% of senior executives ranked innovation as a top priority, signaling that the focus on innovation has only grown.
Clearly, innovation is recognized as a key driver of competitiveness, growth, and shareholder value. But does this commitment translate into concrete action?
The Innovation Strategy-Execution Gap
Despite the widespread emphasis on innovation, execution remains a major challenge.
- According to BCG, only 3% of executives felt their companies were adequately prepared to achieve their innovation goals.
- A study by PwC's Strategy& found that only 25% of companies had a well-defined innovation strategy in place.
This suggests that while many organizations recognize the need for innovation, far fewer have the structures and systems to execute effectively.
Why Do Companies Struggle to Implement Innovation Strategies?
Several factors contribute to this disconnect between innovation ambition and execution:
- Lack of a Clear Strategy: Many companies treat innovation as an abstract goal rather than a structured process. Without a clear roadmap, innovation efforts often lack focus and direction.
- Short-Term Pressures: Public companies, in particular, face pressure to deliver quarterly financial results, which can overshadow long-term innovation investments.
- Insufficient Resources & Talent: Innovation requires dedicated resources, cross-functional collaboration, and skilled personnel—elements that many companies struggle to allocate.
- Risk Aversion: Many corporations fear failure, leading to a conservative approach to innovation that prioritizes incremental improvements over bold, disruptive initiatives.
The Role of Leadership in Driving Innovation
Executives, particularly CEOs, play a pivotal role in shaping a company’s innovation culture and effectiveness.
- Research shows that 90% of companies that outperform in innovation have a C-suite-led innovation agenda.
- Despite this, another study found that while 84% of CEOs believe innovation is essential for growth, only 6% are satisfied with their company's innovation performance.
This highlights a crucial insight: successful innovation isn't just about setting priorities—it requires direct engagement from top leadership to establish a vision, allocate resources, and foster a culture of experimentation.
What Can Executives Do to Strengthen Innovation?
To close the strategy-execution gap, corporate leaders should:
- Create a Formal Innovation Strategy – Define clear objectives, key performance indicators (KPIs), and structured processes to drive innovation.
- Dedicate Resources to Innovation – Set up specialized teams, allocate budgets, and invest in R&D to support innovation initiatives.
- Encourage a Culture of Experimentation – Foster an environment where employees feel safe to test ideas, fail fast, and iterate.
- Align Innovation with Business Goals – Ensure that innovation efforts align with the company’s broader strategic objectives and long-term growth plans.
Closing the Innovation Gap: What Comes Next?
The data is clear: while most publicly listed companies claim to prioritize innovation, only a small percentage have the strategies, leadership engagement, and execution capabilities to truly drive impactful change.
To bridge this gap, companies must move beyond surface-level commitments and implement structured, well-resourced innovation strategies. CEOs and senior leaders must take an active role in championing innovation—transforming it from a corporate buzzword into a sustainable growth engine.
Final Thought: Is Your Company Innovating Effectively?
Where does your company stand? Do you have a well-structured innovation strategy in place, or are you still struggling to execute effectively?
Looking for expert guidance on corporate innovation? Shift Actions specializes in helping organizations design and implement effective innovation strategies. Contact us today to learn more!