WEST MICHIGAN — Companies are increasingly turning to innovation to drive sales following the Great Recession, according to results of an annual survey.
The financial crisis and the meltdown in the housing market ushered in a period of “disbelief and uncertainty (that) seemed to paralyze business leaders,” Plante Moran PLLC Managing Partner Gordon Krater wrote in a report for the 2012 Midwest Innovation Quotient Survey.
But Krater wrote about the 2012 survey results that “it didn’t take long for (business leaders) to grasp the impact of the situation and begin working toward answers that would sustain their operations and prove the value of their organizations to customers.”
The results show that “an intense interest in innovation was clear.”
“Our data points out that leaders have always considered innovation essential to the sustainability of their organizations, but the impact of the Great Recession reawakened their innovative spirits. Through our process of discovery, it became clear that many of our respondents have been implementing changes in strategy and organizational structure as well as developing new marketing concepts,” Krater wrote. “At the same time, they were introducing new products, services, and processes.”
Survey respondents expect innovation to help them meet revenue and cost-cutting goals in 2013 and 2014, survey results say.
The 2012 Midwest Innovation Quotient Survey, conducted by Plate Moran and the NewNorth Center for Design in Business in Holland, also supports the principle that the more deliberately a company approached innovation, the higher the results that the innovation generates.
The 550-plus Midwest companies responding to the survey, about half of which were based in Michigan, attributed 16.1 percent of annual sales to new products or services introduced in the last three years. Most of the survey respondents fit into one of four categories.
On the bottom end of the scale, so-called “accidental innovators” – defined as those companies that “jump from one idea to the next” – on average generated 11.1 percent of their sales through new products or services.
On the opposite end, new products and services from “superstar” innovators that “develop an ecosystem of support allowing them to go for breakthroughs” drove an average 23.3 percent of revenues, according to survey results.
The difference in the results that respondents generated through innovation comes down to building the right systems and processes and having the right corporate culture and strategy, said Jeff Mengel, a partner at Plante Moran who led the firm’s annual Midwest Innovation Quotient Survey. Companies that generated the highest returns tend to look at innovation more strategically and deliberately, he said.
“It wasn’t that they were going to put more money into a budget. It was: ‘How is this going to be important to our business?’ It really drove down to their mission,” Mengel said.