2011 annual innovation study

2011 Annual Innovation Study

South Africa

This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for

distribution outside the client organization without prior written approval from Innovation Agency. This material was

produced by Innovation Agency based on client interaction; it is not a complete record of the discussion.

About the 2011 Annual Innovation Study

2011 Annual Innovation Study Results

About the 2011 Annual Innovation Study

Purpose of the Innovation Study

Research methodology

Survey questions

Respondent demographics

Purpose of the Innovation Study

In the highly competitive market that organisations in South Africa find themselves, ameans of differentiation is of paramount importance. Innovation is seen as one of theprimary drivers in achieving this differentiation.

This study investigates a number of aspects surrounding the level of innovation beingachieved by organisations, as perceived from a localised end-user perspective. Thestudy also explores innovation from an organisational level; whether or not innovationis promoted within organisations; and how individuals deal with ideas they may have.Further analysis delves into why individuals share their ideas with certain people. Thiswill provide insight into some of the critical success factors with regards to innovationmanagement.

The core purpose underpinning this initiative is a strategy for managing the informationacquired and turning it into insights that empower customers and organisations in newways.

Research methodology

This report provides insight on the study conducted during 2010 and 2011. This is anadministered survey conducted during various programs and workshops offered byInnovationAgency.

The survey was administered in a controlled manner. Survey questions were designedto be opened-ended in nature, and served to gauge individual perceptions around thelevel of innovation achieved by institutions from an end-user perspective.Respondents were not given information and/ or definitions of the survey questions.

Data collected was grouped and analysed and keywords created as a means tographically represent the results of study. The 2011 Innovation Study consisted of638 respondees.

Survey questions

The study questionnaire consisted of the following questions:

• Which South African company is the most innovative?

• Why did you rate the company as the most innovative?

• Which international company is the most innovative?

• Why did you rate the company as the most innovative?

• What should companies focus on to become innovative?

• What is your definition of innovation?

• What did you use as your source of innovation?

• Have you ever participated in innovation programs before?

• What did you like about the approach of the innovation program?

• What did you dislike about the approach of the innovation program?

• Is collaboration promoted within the organisation?

• Do you collaborate with people/ teams when developing new ideas?

• How do you collaborate?

Key thoughts

Respondent demographics

• Study respondents represented a widespread of individuals, from various backgrounds

• Many individuals surveyed occupied middle to executive level positions within corporate South Africa

Female44%

Male56%

Gender split

African19%

Asian15%

Coloured9%

White57%

Ethnic classification

0%

5%

10%

15%

20%

25%

30%

20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59

Age distribution

0%

5%

10%

15%

20%

25%

Income distribution

2011 Annual Innovation Study Results

Focus on innovative companies

Focus on innovation within companies

Focus on innovative companies

Most innovative South African company

Reason for rating the company innovative

Most innovative international company


Key thoughts

Most innovative South African company

• Respondees look to be quite versed in terms of the various South African companies and their offerings

• Many companies featured in the list comprise companies that are well known and hold significant market share in their respective industries

• The top three companies are product based companies

• The list does, however, contain a fair amount of service as well as product based companies

• In the Banking Innovation Study, FNB was rated the most innovative bank. Capitec , however, was the top rated bank amongst overall South African companies

0% 2% 4% 6% 8% 10% 12%

BMWCell C

Mr PriceVirginMTN

NaspersKulula

FNBShoprite & Checkers

Coca ColaOutsurance

VodacomBidvest

Multichoice Pick n Pay

CapitecDiscovery

SARSSasol

Nando'sWoolworths

SABMiller

Key thoughts


• Respondees indicate that many individuals see innovation by how well the company is marketed and how prevalent company products have become

• The results also indicate that company marketing goes a long way to influence public perception

• Customer service did not rank highly in this category

• Respondees are also recognising companies that have grown outside of the South African footprint as innovative

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Distribution modelOperating model

SuccessfulBusiness model

Agile/ adapt to changesCompany strategy

Continuously improvingMarket leader

Targeted marketCustomer service

DiverseProcesses

Customer centricTechnology

Innovative cultureDriving change

Growth of businessMarketing & ads

Products

Key thoughts

Most innovative international company

• Apple also occupies first position on Forbes 2011 top 100 most innovative companies

• The companies featured have become well known brands and their products are part of daily living

• The top two positions are occupied by companies in the technology sector

• Apart from the Virgin group, the rest of the companies featured in this category do not belong in the financial services sector, in contrast to the innovation companies in South Africa

0% 5% 10% 15% 20% 25% 30%

AmazonIKEAAudi

Nokia Virgin Airlines

Mercedes BenzMcDonalds

General Electric Hyundai

NikeRIM

ToyotaSony

FacebookCoca ColaSamsung

BMWMicrosoft

VirginGoogle

Apple

Key thoughts


• The reasons given further evidence how customers identify and appreciate innovation through tangible goods

• Products was the overwhelming reason given for rating a company innovative, and technology was a distant second

• Customer service , however, was lower down the scale in this category

0% 5% 10% 15% 20% 25% 30% 35%

Business modelWide appeal

Company strategyInvest in staff

AccessibleFirst to market

CompetitiveCreative/ think out the box

Customer serviceMarket leader

Customer centricDiverse

Marketing & adsGrowth of business

Continuously improvingInnovative culture

Driving changeTechnology

Products

Key thoughts

Company focus to become innovative

• In this demographic, customers are indicating a greater need for a more individualistic approach from companies

• The responses may even show a willingness by customers to try new and different options

• The prominence of client centricity prevails in this year’s Study

• Individuals are viewing innovation as a means of company growth, and differentiation

• People may also be indicating a yearning participation in their company’s innovation initiatives

0% 2% 4% 6% 8% 10% 12% 14%

Challenge the staus quoCost factors

Take risksForward looking

Finding solutionsCompany strategy and objectives

Continuously improveAnticipate needs and changes

Willigness to changeClient solutions

Do things differentlyCustomer service

ProductsProcesses

R & DIdeas and out the box thinking

TechnologyCompetitors and market changes

Company staffPromote innovation culture

Customer needs and behaviour

Focus on innovation with organisations

Definition of innovation

Participated in innovation programs before

Reason for liking the approach

Reason for disliking the approach

Source of innovation

Do you collaborate

Collaboration promoted

How do you collaborate

Key thoughts

Definition of innovation

• Innovation is often defined within the confines of technology, however the results show innovation can be less tangible

• For the purposes of driving innovation within organisations, however, it becomes imperative that a uniform view of the concept of innovation is adopted

• Crucial considerations when defining an innovation strategy beyond a process or methodology includes where innovation sits within the organisational structure

These were some of the responses to this question:

– Refining or coming up with process to improve productivity

– The ability to anticipate what will be required in the future and creating solutions to meet new demand

– Providing staff members the freedom to express themselves

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

ProfitabilitySustainability

Anticipating needs and changesImplemeting ideas

TechnologyParadigm shift

ProcessCustomer service

Continuous improvementRelevant

Finding solutionsNew offeringEnhance life

Competitive edgeImproving the existing

Satisfying needsOut the ordinary

ProductsNew ideas

Do things differently

Key thoughts

Source of innovation

• The results suggest that organisations are using customer feedback as insights when considering new innovations

• However, this may also be an indication of how reactive companies still are, and this may be the reason for placing high reliance on the customer for input

• Many companies have yet to move into an era where current analytics are used as part input into more predictive models in order to service customers and solve problems

• Customers and colleagues were by far the most widely used source of innovation

• It is indicative of fact that employees and customers know a lot about their offerings

0% 5% 10% 15% 20% 25% 30%

LecturesSocial media

Other company resourcesProcesses

Other technologyProblematic areas

All stakeholdersInformal meetings

MediaFormal meetings

CompetitorsGeneral conversation

Personal observationsDifferent research options

LiteratureMarket trends

InternetSuppliers

ColleaguesCustomers

Key thoughts

Participated in innovation programs before

• Innovation as a discipline is evolving from traditional R & D to a more transverse function; from the preserve of product development to now also include more incremental changes within organisations

• Innovation initiatives will often touch on these areas within organisations:

– People

– Processes

– Philosophy

• Many individuals can identify innovative companies, however, less than half of the participants have been involved in innovation initiatives

• The results may be an indication of the limited reach and narrow focus of innovation efforts within organisations

• The above illustrates that innovation may not be priority when improvements to the organisations need to be made

• This may signal that organisations do not understand how innovation can benefit them

Yes37%

No63%

Key thoughts

Reason for liking the approach

• Judging by the results, the success of innovation programs depends on

– The facilitation

– Program structure

– Methodology

– Approach used

– Chosen strategy

• Organisations may use innovation as a means to involve the greater community in the company’s evolution

• The freedom to explore was the top reason given for liking the approach used on the innovation programs

• This may an indication that employees would like to be given the opportunity to contribute to company’s innovations

• Above all individuals enjoy free reign within innovation programs

0% 5% 10% 15% 20% 25% 30%

Exciting

Methodology used

Process

Fascilitation

Interactive

Solution orientated

Tools provided

Good idea

Incentivised

Participating

Open to all employees

Results of the program

Collaborative

Challenging

Ideas generated

Approached well

Freedom to explore

Key thoughts

Reason for disliking the approach

• The reasons given in this category may speak to a lack of experience by organisations when initiating programs of this nature

• Many of the reasons given are at execution level

• The results may also be an indication of how difficult it is for companies to change • The approach decided upon is often incumbent on top management and

driven to the rest of the organisation

0% 5% 10% 15% 20% 25% 30% 35%

Few ideas were implemented

Initiated during crisis

Single point of authority

Personal issues

Incentives

Little or no feedback

Limited support

Lacked participation

Limited resources

Resistance encountered

No continuation

Results of program

Facilitation

Methodology

Process

Approach used

Key thoughts

Is collaboration promoted

• This may be a sign of organisations steering away from the silo approach to doing business in an effort to simplify and streamline processes

• Adressing the silo approach may require relooking at:

– Functions closed off from each other

– Management layers not communicating with each other

– And suppliers, internal experts, clients and end-user customers

• Many organisations look to have embraced the idea of collaboration through various efforts like co-production and cross departmental sharing

78%

12%

10%

Yes

No

Partially

Key thoughts

Do you collaborate

• Many individuals are not strangers to collaborating

• The results, however, may show that innovation programs are seen as separate from collaboration

• The results may be testament to the traditional approach still used by today’s organisations within the space of innovation

• Organisation Network Analysis (ONA) may assist in providing insight into the flow of information and how things get done

• The results may be an indication of a project based basis for the collaboration vs. collaborating for the purpose of innovation

• The question arises as to whether collaboration should be categorised as innovation

93%

5%

2%

Yes

No

Sometimes/ depends

Key thoughts

How do you collaborate

• The traditional methods of face to face and email communication still prevail within companies, despite the many alternatives available

• Idea management platforms can assist manage and channel innovation activity in the desired direction

• People still value personal interactions above many other methods

• Notably, social networks as a medium have been rated ahead of the conventional telephonic communication

0% 10% 20% 30% 40% 50% 60%

Different methods

Research

Online portal

Internet

Video confrence

Project driven

Different electronic mediums

Informal - face to face

Telephonically

Social networks

Email

Formal - face to face

About UsWe live in a socially aware society whereinvolvement across a collective workforcecommunity is used to drive innovation. SocialBased Innovation approaches pave the way toa more networked and integrated means ofmanaging innovation. We are driving thisevolution forward.

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2011 annual innovation study

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