collaborating for innovation 2010
DESCRIPTION
In this edition of “Collaborating for Innovation” the goal was to draw executive attention to current strengths and improvement opportunities, relating to the process of innovation, focusing on four overarching aspects of the innovative company:The consequences of changing corporate/strategic imperatives upon innovation as a lever for growthThe changing structure and operation of the R&D function and its impact on corporate successThe embedding of innovation as a culture underpinning an organization beyond the R&D function and across the value chain, including customers and suppliersThe drivers and obstacles for integrating these “external” parties in various stages of the innovation processTRANSCRIPT
Collaborating for InnovationCapgemini’s 2010 Global Study – Results and Findings
October 2010
Collaborating for Innovation – About The Study
Key Findings
Recommendations
Agenda
In this edition of “Collaborating for Innovation” the goal was to draw executive attention to current
strengths and improvement opportunities, relating to the process of innovation, focusing on four
overarching aspects of the innovative company:
The consequences of changing corporate/strategic imperatives upon
innovation as a lever for growth
The changing structure and operation of the R&D function and its
impact on corporate success
The embedding of innovation as a culture underpinning an organization
beyond the R&D function and across the value chain, including
customers and suppliers
The drivers and obstacles for integrating these “external” parties in
various stages of the innovation process
About the Study
Study Methodology and Respondent Profile
The study was carried out by a professional market research agency, using a web-based survey, comprising
41 questions focused on Corporate Strategy, Innovation Performance, and Collaboration with the R&D function,
Customers and Suppliers
Invitations to participate were sent to board-level and
senior executives, as well as middle managers closely
involved with, or responsible for, Innovation, Product
Development, Manufacturing, Sales, Marketing and
Customer Service. We approached a range of potential
participants including, but not exclusively, existing
Capgemini clients around the world
We collected responses from 189 participants from
companies based in 15 countries, with the respondent
distribution of 38% from companies headquartered in
North America, 39% from Europe, 11% China and
North East Asia, 7% Indian and South East Asia, and
5% from Australasia Central/South America and
Africa/Middle East
Industry Representation among Survey Respondents
23%
23%42%
12%
Automotive,
Aerospace &
Defense
Consumer
Products &
Retail
High Tech
Industrial
Products
Agenda
Emerging Multinationals – About The Study
Key Findings
Recommendations
Our research indicates that manufacturing companies have improved in their ability and
confidence to develop, produce, promote and measure innovation from strategy and then
throughout the value chain:
Innovation is increasingly integrated into corporate strategy
An integrated innovation performance measurement system is essential
R&D collaboration is key for top-line growth in global markets
Customer collaboration is more than collecting customer insights – it’s about
capitalizing on them
Supplier collaboration needs to shift from cost reduction to shared value creation
Overall Key Findings
Corporate Strategy 1/3
• Innovation appears to have become an integral part of corporate growth strategy and increasingly is embedded
in other functions beyond the R&D division, representing an evolving approach
50%
34%
45%
23%33%
44%
59% 36%
67%56%
6% 7%17%
10% 10%
Consumer Products & Retail
High Tech
2%
100%
Total
1%
Automotive, Aerospace & Defense
0%
Industrial Products
Alignment of Strategic Approach to Innovation with Growth Strategies
Somewhat aligned
Not aligned
Closely aligned
Completely aligned in all aspects
Corporate Strategy 2/3
This, together with increasing C-level involvement and growing external pressure from globalization, has led
companies to look at it as an important lever to improve business performance, in addition to the more traditional
role of bringing new products to market
Effectiveness of C-Level or Executive-Level Sponsorship and Support for Innovation Projects
22%
11%
37%
13%19%
50%73%
46%
73%65%
22%14% 10% 13% 13%
7%6%
Consumer Products & Retail
1%
High TechIndustrial Products
2%
Automotive, Aerospace & Defense
100%
Total
3%
No support
Some support
Good support
Complete and effective support
Corporate Strategy 3/3
Compared with our 2008 survey, the role of Marketing & Sales as the primary driver for innovation has been
strengthened, which reflects the tendency to more market-driven innovation instead of a technology push
Which Functional Area is the Primary Driver of Innovation?
38%
29%
11%
5%
16%
1%
General
Management
Information
Technology
Manufacturing /
Operations
Marketing &
Sales
Purchasing /
Procurement
Research &
Development
Innovation Performance 1/3
Overall, we see a mix of performance measurements for innovation across and within sectors. To demonstrate
the benefits of collaborative innovation, companies need to establish a consistent range of performance
indicators
About one-quarter of respondents rated customer satisfaction, product performance and sales from various
types of new products as the key benchmarks to measure innovation performance – factors that impact primarily
the top line
Primary Measure of Innovation Performance Effectiveness
20% 18%31% 25%23%
14%7%
10%27% 9%
9%
22%25% 41%
12%23%
14%9%
16%
40%24%
23%
9% 9% 13%
5%
14%
0%
5%
Automotive, Aerospace & Defense
100%
TotalConsumer Products & Retail
3%
High TechIndustrial Products
Manufacturing and operations costs
Sales from various types of new products
Product performance
Time to market
Development costs
Customer satisfaction
Innovation Performance 2/3
About two-thirds of the respondents affirmed that less than half the products launched in the past three years
had been successful in the market. On the other side, 11% of respondents indicate that they achieve success
rates of more than 76% - a significant difference in innovation performance and a significant potential for
improvement
Success Rate of New Products Launched over Past Three Years
14% 17% 18% 13% 15%
36%
49% 41%61%
51%
27%
32%33%
13%23%
23%
8% 13% 11%100%
TotalHigh TechIndustrial Products
2%
Automotive, Aerospace & Defense
Consumer Products & Retail
0-25%
20-50%
51-75%
70+%
Innovation Performance 3/3
Failure to meet customer needs is by far the primary cause for new product launch failure, particularly in
industry sectors that sell directly to end-customers. New methods in the innovation process and the more active
use of collaborative technologies provide opportunities to address this challenge
Primary Cause of New Products Launch Failure
19%12% 12% 10%
14%5% 6%
47%
19%
22%
58%39%
21%
21%
10%
14%
24%16%
19%
17%
18%
10%18% 21%
5%13%
5%
Automotive, Aerospace & Defense
100%
TotalConsumer Products & Retail
4%
High TechIndustrial Products
Development project too expensive or not adequately fund
Poor product quality or technical performance
Product falled to meet customer / consumer needs
Product launched before market was ready
Product launched too late to market
Products retail price too expensive
R&D Collaboration
We expect a number of stakeouts of companies with large R&D units, and increased M&A activity. This may
precipitate further alignment of R&D unit operations, including process and tool harmonization, and shared ways
of working
In-house R&D is increasingly a consolidated function with a strong majority of companies maintaining only a
handful of distinct facilities, with North America still the preferred location
Complementing this is the recognition of the value of collaborating beyond organizational boundaries.
Compared with 2008, satisfaction levels increased for key tools such as open innovation environments to
collaborate with external parties, and information systems to support internal design collaboration
R&D Strategy in the Next Three Years
18%22%15%19%
11%10%12%22%
52%33%
71%64%
61%
19%35%
7%11%
High Tech
7%
100%
Consumer Products & Retail
TotalIndustrial Products
5%
Automotive, Aerospace & Defense
6%
Increase centralization
Increase decentralization
Increase In-house R&D
Increase R&D outsourcing
Customer Collaboration
Many innovations still fail due to the inability to meet customer needs, the CPR sector being the least successful
in gathering or incorporating customer ideas into product development
Many companies would like to involve customers more effectively into their innovation process, but they face
hurdles such as long development cycles and complex products. Our work with clients leads us to believe that
customer involvement is possible for just about any business
Percentage of New Products, Launched Over Past Three Years, Shaped by Customers During Development
49%
27%34%
59%
46%
18%
32%28%
25%
26%
23%29% 24%
9%
18%
5% 10% 11% 8%6%5% 2% 3%
Industrial ProductsAutomotive, Aerospace & Defense
2%
Consumer Products & Retail
100%1%
High Tech Total
60-79%
Less than 20%
80-100%
20-39%
40-59%
Supplier Collaboration 1/2
Companies are undertaking a number of supplier collaboration initiatives, which suggests that suppliers are
being seen more as partners in driving innovation, although the importance of being innovative in reducing costs
persists
Importance of Intellectual Property Control as Criterion during Partner Selection
17%
37%
13%
24%
66%
59%
43%
64%
58%
17%
34%
10%22%
15%
10%7%
100%
Total
3%
Consumer Products & Retail
1%
High TechIndustrial ProductsAutomotive, Aerospace & Defense
Not important
Somewhat important
Important
Very important
Supplier Collaboration 2/2
The overall picture clearly indicates that supplier collaboration has become a standard in all industry sectors and
that companies employ various models of supplier collaboration to fulfill the market demand
Effectiveness of Involving Suppliers in the Innovation Process
6%
32%24%
64%
21% 21%
46%49%
24%
49%48%
14% 20%
6%5%6% 5%7%
26%23%
100%
Total
1%
Consumer Products & Retail
3%
High TechIndustrial ProductsAutomotive, Aerospace & Defense
Good
Very good
Excellent
Poor
Adequate
Agenda
Emerging Multinationals – About The Study
Research Methodology
Recommendations
Our recommendations for companies wishing to enhance their collaborative
innovation and to become innovation leaders in the upturn:
Make business innovation a fully integrated part of your corporate strategy
Develop and implement appropriate innovation performance measurements or metrics
to aid sound decision-making
Reshape R&D to effectively enable collaborative innovation
Refine and maintain customer collaboration
Build and scale up strong supplier networks for collaborative innovation
Recommendations
www.capgemini.com
Together. Free your energies
For more information, contact:
Udo Lange
+49 151 4025 1159
Mark Heidenreich
+1 630 660 5464
Koen Klokgieters
+31 651 123259
Nick Gill
+44 870 904 5699