Innovation and Change

Organizational agility

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We live in an age of agility, and organizations that want to survive, let alone thrive, need? to increase their speed, adaptability, and innovation. It is a challenge many are not well equipped to meet. In a survey of chief innovation officers and related roles which the authors conducted for this white paper, nearly 90 percent of respondents said agility was highly important to the future success of their companies, and 96 percent said they needed to become more agile in the future. Yet only 26 percent rated their company's current agility as high or greater. Executives may realize that agility is critical, but companies, especially large ones, find it difficult to achieve and sustain. More than 80 percent of corporations had undertaken one or more initiatives to improve agility over the previous three years; 34 percent said they failed to deliver the desired benefits. In our survey, 70 percent of firms said they were increasing investment in their innovation units, 60 percent of which were created in the past five years. Despite such increased investment in innovation, only 23 percent of companies said they had delivered a significant innovation - defined as one that accounts for more than 10 percent of the business's revenue. If agility is so critical, and innovation units are a way to achieve it, why are large corporations having such variable results? In this study, we will provide further background on the agility challenge and its causes. We will also point to some best practices for improving the effectiveness of innovation units as part of increasing agility more broadly, including how to remove internal informational silos, develop internal talent, and avoid delays because of internal politics, to name a few. They are, admittedly, difficult to apply systemically, but at a time when many firms operate in highly uncertain environments, they are increasingly critical.
Bibliographic citation: Prats, Mª Julia; Siota, Josemaria; Gillespie, David; Singleton, Nicholas, "Organizational agility: Why large corporations often struggle to adopt the inventions created by their innovation units and how to improve success rates in a rapidly changing environment", IESE; Oliver Wyman, ST-477-E, 04/2018
Date: 26/04/2018
Author(s): Prats, Mª Julia; Siota, Josemaria; Gillespie, David; Singleton, Nicholas
Document type: Study and Monograph
Editor(s): EIC - Centro de Iniciativa Emprendedora e Innovación
Languages: English