- Where to Play 2021+
While the risks presented by climate change are daunting—and, increasingly evident—the renewed strategic priorities of The Sustainable Development Agenda offer a new frontier for differentiation. To fuse sustainability and a sustainable competitive advantage coherently, business leaders must consider various implications for innovation and actively tie innovation activities to sustainable outcomes.
A key recommendation to this endorses benchmarking current capabilities and initiatives with emerging compliance & regulations. By applying suitable indicators to measure how well a product or company performs in the context of set sustainability objectives, companies are better equipped to estimate and track how advanced they are on their journey. In much the same way, the value of Systematic Innovation Management lies in creating a future competitive advantage by defining the strategic direction of their organization.
Having recently reached its first anniversary since release, the ITONICS Control Objectives for Innovation Management (short COFIM) was developed to provide clear guidance on how to develop and systematically steer the innovation management capabilities needed. Founded on extensive experience from hundreds of innovation projects and academic expertise, COFIM represents the fundamental framework for successful corporate innovation management, defining the capabilities required if organizations are to successfully shape the future.
In light of the hypothesis that innovation and sustainability are inextricable, the control objectives outlined in the ITONICS COFIM framework exemplify what a best practice for sustainability-focused innovation might look like.
Survival, success, and sustainability in the next decade will be determined by the capacity to innovate, the power to mobilize the required resources for action, and the ability to communicate with full transparency.
In this article, we look at how organizations can apply the COFIM to better assess capabilities in relation to the indicators of successful innovation. This extends to measure the specific innovation capabilities needed to:
To date, over 200 clients from a variety of industries have participated in the ITONICS Innovation Maturity Assessments. The indicators used in this assessment provide a view on existing strengths that can be underscored as differentiators and point to the capabilities needed to be improved for greater resilience.
Taking a sectoral lens, we consider some of the analyzed results to estimate the innovation readiness of each industry. And thereby, extrapolate the probability of achieving sustainability objectives profitably.
For the purposes of this article, we examine the industries which have scored the highest overall maturity. Using this data, we are able to identify precursors of success and assess where structures, capabilities, and metrics can be improved to effectively manage innovation activities that work towards better business outcomes.
According to the data, the Pharmaceutical, IT & telecommunication, Automotive, and Finance & Insurance sectors are best equipped with the capabilities to innovate.
As indicated by the results, Foresight & Strategy is the capability set most developed in organizations that hold a higher level of maturity.
While managing innovation is shaping change and uncertainty, strategic foresight offers organizations greater opportunity to reach consensus and act decisively in doing so.
In developing foresight, organizations are empowered to establish a 360° view on competitive developments, better prospect and plan their future competitive position, and ultimately, strengthen strategy.
For organizations that hope to emulate benchmarked practices within the Foresight & Strategy section of the COFIM framework, there are five thematic areas that are key to businesses building their innovation capabilities:
To further deep-dive into the success measures of these industries, we consider the 5 thematic areas of Foresight and Strategy. Of which, the highest-scoring areas on average were highlighted as Environmental Scanning, Pictures of the Future, and Commitment.
The results indicate that these industry players prioritize environmental scanning In managing innovation and developing strategies. These respondents first understand the context and impact of change in order to anticipate the new and the next.
To make sense of our fast-forward society and the complexity of change, the successful organizations within these sectors are also seen to develop pictures of the future as a clear, singular point of truth or, focused vision of the future wherein they will operate.
The competitive advantage lies in the management's willingness to transform today's business into tomorrow's business. As demonstrated by the results incumbents across all 4 industries scored highest on Commitment, citing that management and company are on board to support the innovation initiatives.
Conversely, the above results demonstrate significant opportunity for improvement, as all four sectors were seen to score particularly low in the Planning and Goals questionnaire.
Though the results demonstrate that they have a thorough view of their environment, the measure of the control objectives suggests that there are blockages in the crafting of strategic roadmaps that take into account key drivers affecting the business environment.
In this way, COFIM and other audits of this nature expose vulnerabilities in an organization’s end-to-end innovation process and management capabilities. If leveraged correctly, the outcomes of such will not only support decision-making on tradeoffs, improve R&D design briefs, and enable internal reporting but can become a primary driver of industry-wide disruption.
As asserted in our latest report, The Decade of Action: Innovation & Sustainability 2030, sustainability will be the primary innovation challenge of the next decade.
Reporting on business models and sustainability, the World Economic Forum states that in order for environmental targets to be adequately met, “environmental or social responsibility” can no longer be outsourced but must be internally prioritized by companies so that climate change mitigation is treated as a necessity and not a luxury.
It is made clear that “a continued disconnect from the reality of the change presented by the next century is not only an urgent social priority but a wasted opportunity.”
With just ten years to reduce emissions, it is no surprise to see greater demand and a committed response from the private sector in the transition to a more sustainable future. On the way to this future, it will be those who innovate with precision and transparency that will be best prepared with the execution capabilities to thrive. Those that fail to do so will be rendered obsolete.
Yet the questions we must ask is, how will we see commitment taken forward?