KPMG’s 2016 CEO Study revealed that the ability to innovate, or even have the time to think about innovation, weighs heavily on the minds of CEOs. In fact, 85 percent of the 400+ CEO respondents indicated that they need more time to strategize about how to foster innovation in their organizations, and proactively address the disruption in today’s business climate.
Although CEOs in the study view innovation as a strategic priority, only 25 percent say innovation is embedded into everything they do.
Why is innovation so important? Based on the KPMG CEO study and what we’re seeing in the Denver/Boulder marketplace, building a culture of innovation leads to increased growth and shareholder confidence. To move the needle, successful CEOs are working hard to drive the right mix of investments in new products and services, alliances, and acquisitions to open up new channels and attract new customers.
Rethinking the workplace
The study also highlighted the need for CEOs to examine their strategy and determine whether they have the necessary data, talent, resources and business models to continue on the right path to remain relevant and competitive.
A new report published by leading industry analyst Forrester underscores how the physical world can play a crucial role in fostering digital innovation. In fact, Forrester recently highlighted KPMG as one of only two forward-thinking companies who are rethinking workplace design. The Forrester report concluded that:
• Behavioral science shows that physical workspace has a strong impact on how well employees work.
• Innovative workspaces break down silos and hierarchies by removing physical walls to create open floor plans.
• Desks, chairs and other furniture are on wheels so the space is as agile as the development work.
• Cubicle farms are dying, and innovative workspaces are where employees want to be.
A prime example of this is KPMG’s Ignition Denver — the first in a national network of high-tech centers opening across the country that feature meeting, recreation and project spaces that encourage creative thinking; an open floor plan designed to enhance collaboration; and high-tech visualization tools that demonstrate solutions. Ignition has grown quickly and garnered significant interest in the local business community, with several clients wanting to conduct regular business meetings at Ignition to spur greater innovative thinking.
Attracting talent, empowering teams
Another key finding from the CEO study is that 34 percent of respondents said that working in an entrepreneurial or collaborative culture is one of the best ways to retain employees. Creating an environment where barriers to collaboration are removed fosters a cross-pollination of ideas that attract top talent who embrace disruption and innovation. It also stimulates creativity and engagement.
For example, digital and tax teams at Ignition Denver recently found that they were working on similar challenges over a game of pool and came together to form a solution. Science shows that if people are stuck with a problem they can’t solve, it helps to walk around or play a game to unblock their thinking.
Innovation and customer loyalty
Innovative solutions are also the key that can unlock the door to customer loyalty. In fact, the CEO study found that customer loyalty is a concern for 90 percent of CEOs. At Ignition, we satisfy customers not just in what we deliver but in how we deliver it. When our clients see the innovative and collaborative way that we approach their problems, it gives them confidence in our work, thus enhancing loyalty.
Moving the needle forward
Driving innovation initiatives can be challenging, and at times daunting. For example, the survey found that 49 percent of CEOs believe their organizations will be transformed into significantly different entities in the next three years.
Innovation can seem intimidating, especially when an organization feels the pressure to move quickly or miss the train. That’s because innovation builds upon itself. In other words, there are often tiers of innovation, and you can’t innovate at the enterprise level without also innovating at the smallest level.
While we strive to embed innovation into everything we do, it isn’t always possible. That’s why we look at how we do what we do each day and think about how we can do it differently tomorrow. Building on these successes and failures to move the needle forward is all part of innovation.
Mike Bearup is the office managing partner of the KPMG LLP Denver/Boulder office. Lou Trebino is an advisory principal for the KPMG LLP Denver/Boulder office. They can be reached at email@example.com and firstname.lastname@example.org.