I’m going to sound like a biased broken record, but innovation has never been more crucial for the survival of organisations of all sizes—and it’s more than just a buzzword. Today, a growing number of companies recognise the advantages of innovation, with 79% ranking it among their top three priorities and 66% planning to increase spending.
This article focuses on the return on investment that innovation-focused businesses can achieve by investing in improving their capabilities to innovate, particularly through workshops and training. It’ll be full of statistics and numbers that present the tangible benefits of fostering innovation within an organisation — so if you love stats and numbers this one’s for you!
What is Innovation Capability Development?
What exactly is innovation capability, or skills, development, and why should we care?
Innovation is the lifeblood of growth, progress, and competitive advantage in today’s rapidly changing world. Developing innovation capabilities is a critical source of competitive advantage for firms. These capabilities relate to an organisation’s ability to initiate, develop, and achieve innovation results. Enhancing these capabilities is essential for improving processes, developing new products and services, and boosting overall competitiveness.
Knowing how to innovate strategically and effectively is not just confined to senior leaders. While senior leaders must confront the reality of an increasingly uncertain business environment and recognise the need for continuous innovation for sustained growth, middle managers, focused on execution, often view innovation as a distraction from day-to-day objectives. Despite this, middle managers are pivotal—they empower their individual team members to innovate and ensure that valuable ideas reach senior leaders.
How Do Organisations Develop Innovation Capabilities?
Let’s dive into how organisations can build these crucial capabilities. Building the right capabilities and measuring their effectiveness is essential. According to the PWC Innovation Benchmark Study, more inclusive operating models are popular among innovators, incorporating:
- Open innovation
- Design thinking and problem-solving frameworks
- Co-creating with stakeholders
Investing in capability development through tools, methods, and mindsets such as facilitated workshops, collaborative activities, and engaging training programs faces the fewest barriers to implementation and is the most affordable and scalable, giving you the best bang for your buck!
Measuring Innovation ROI
So, once you’ve invested in developing these capabilities, how do you know it’s actually paying off?
Quantifying the benefits of innovation initiatives for decision-makers is essential. Investing in innovation-based workshops and training, whether conducted internally or led by an external expert, is a strategic move that delivers measurable returns. Let’s look at some compelling statistics:
- Increased Revenue: Companies prioritising innovation see 30% higher revenue from new products compared to their less innovative counterparts (Source: McKinsey & Company).
- Improved Efficiency: Organisations implementing innovation capacity development report a 20% increase in operational efficiency within the first year (Source: Boston Consulting Group).
- Employee Engagement: Teams participating in innovation initiatives experience a 40% boost in employee engagement and satisfaction (Source: Gallup).
- Competitive Advantage: 84% of executives state that their innovation efforts have significantly improved their market competitiveness (Source: PWC Global Innovation 1000 Study).
Let’s not forget that the most innovative companies anticipate 62.2% revenue growth over the next five years (Source: PWC Global Innovation 1000 Study).
In my opinion, the simplest and most compelling statistic to keep in mind is that businesses investing in innovation see an average ROI of nearly two times. This means that for every dollar invested in enhancing innovation capabilities, you can expect to double your return (Source: CommBank).
That’s not a bad deal.
Who Benefits from Investing in Building Up Innovation Capabilities?
Let’s talk about who stands to gain the most from investing in innovation capabilities
- Senior Management and Executives: Facing an increasingly uncertain business environment, senior leaders recognise the need for continuous innovation for sustained growth. Investing in innovation is not only for themselves but also for their subordinates. By fostering a culture of innovation from the top down, they set the tone for the entire organisation.
- Middle Management: Middle managers drive organisational success but need the skills to succeed. Targeted training can help them design systems and execute plans based on strategic directives from senior executives. They are the bridge between high-level strategy and day-to-day operations, helping to shape the strategic direction of the organisation.
- Independent Team Members: Building innovation capabilities within team members empowers them to contribute meaningfully to the organisation’s innovation agenda. It’s about giving everyone a voice and the tools to make a difference.
The truth is, everyone stands to benefit. Every organisation should aim to cultivate intrapreneurs.
Whether you’re an aspiring entrepreneur, business leader, manager, designer, strategist, or an everyday contributor, enhancing your skills and involvement in innovating products and services within your organisation is valuable.
The Long-term Benefits of Innovation Development
Alright, so we’ve established who benefits, but why should they care about workshops and interactive training? Workshops and interactive training are effective methods for building innovation capabilities, particularly for leadership roles. The benefits include:
- Long-term Gains: A strong innovation culture has a lasting impact on business growth and competitiveness, which is relevant to strategic decision-makers. It’s like planting seeds that will bear fruit for years to come.
- Improved Collaboration, Decision-Making, and Problem-Solving: Training enhances these critical skills, leading to more effective and innovative teams. When everyone is on the same page and equipped with the right tools, the possibilities are endless.
Investing in innovation capability development is not just a commitment to growth; it’s a strategic move with measurable returns. By enhancing innovation capabilities, organisations can achieve sustained growth, enhance product and service innovation, and improve operational efficiency.
Centred’s workshops deliver tangible ROI for businesses led by leaders and aspiring intrapreneurs. These workshops provide the tools, frameworks, and mindsets needed to foster a culture of continuous innovation, enabling teams to seize new opportunities effectively and ensure that no great idea goes unnoticed. Whether you’re kicking off a new project, uncovering challenges and designing solutions, or zooming out to leverage emerging trends and changes, our workshops will help you go beyond the business core.