Chief executives around the world are ramping up their efforts to innovate and find new ways to do business, in a move to stimulate growth in a challenging global business environment.
A new PwC Pulse Survey of 246 CEOs in Europe, North and South America, Asia Pacific, and the Middle East reveals that 97% of CEOs see innovation as a top priority for their business. The Pulse Survey was conducted as a follow-up to the 2013 PwC Global CEO Survey of 1,330 CEOs which showed innovation to be a major and lingering CEO concern.
In Ireland, PwC’s 2013 Irish CEO Pulse survey revealed that over half (56%) of Irish business leaders will increase their innovation capacity.
Perhaps the most interesting news is that there has been an important shift in the relative focus on operations and innovation. Globally, almost two in three CEOs see innovation and operational effectiveness as equally important to the success of their company. Business leaders in Latin America agree with this the most (71%), in contrast to their peers in the Middle East who are more divided (50%).
The research also shows that there has been a shift in how CEOs view their role in driving innovation. Today’s CEOs recognise that they need to be directly involved in driving innovation within their business, with 37% reporting their role as ‘leader’ in this area, and 34% as ‘visionary’. This contrasts sharply with the situation three years ago when a similar survey showed only 12% of CEOs were leading the charge on the innovation strategy.
Ann O’Connell, Consulting Partner, PwC Ireland said:
“The fact that top-notch innovation has now become as important as operational excellence represents a step change from our survey in 2009 PwC: “Caught in the Crossfire” 2009. Back then, sharpening operational effectiveness was the overriding objective as companies sought to survive the sudden loss of revenue caused by the financial crisis. Now, three-quarters of CEOs regard innovation as at least equally important as operational effectiveness.”
And their innovation plans are broad. Over the next three years, CEOs are planning to innovate across the board, from customer experience, products and services, through to business models, systems and approaches. With such widespread innovation planned by so many companies, the question will be around how companies will be able to differentiate themselves for competitive advantage.
Ann O’Connell continued:
“Put simply, CEOs have overwhelmingly recognised that today, companies that don’t innovate will fail. It’s no longer a choice. The CEOs we surveyed are ready for the challenge and are taking the helm. The key will be for them to deliver value in new forms, in new ways, to existing and new customers. What remains to be seen is whether their organisations are ready to deliver on their aspirations.”
Not every region sees the need for innovation in the same light. The appetite for innovation was strongest in Asia-Pacific and North America, where CEOs unanimously agreed that innovation is a key focus area within their organisation. In contrast, 18% of CEOs in Central and Eastern Europe and 10% of their peers in the Middle East disagreed, reporting that innovation is not a priority in the markets.
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