Challenges of innovation

Human aspects are the biggest challenge

Participants in the Innovation survey Netherlands 2018 mentioned the same top three obstacles for innovation as last year. The human aspect still needs to be improved because culture and leadership are the main challenges when trying to be innovative.

Wendy van Tol, PwC expert in Change and Leadership, explains.

Top three challenges for innovation

Our respondents highlighted the three biggest challenges in their innovation processes.

 

The main obstacles that respondents face in the culture and leadership of their organisation are rather sizeable. In terms of culture, collaboration is not sufficiently promoted; people are not very willing to take risks and are given little encouragement to be innovative. And while managers are open to innovation, they do not take risks and shy away from experimentation. A quarter of all respondents also said they are afraid to deviate from existing performance norms.

Radical change needed

Although the importance of innovation seems to be widely acknowledged, there is still room for improvement when it comes to the human aspect. Wendy van Tol is not surprised: “Innovation is a trend that many organisations are fixated on; they want to innovate, but don’t know how and with which purpose. Organisations must change radically in order to realise innovation. You must determine who you want to be as an organisation (your identity) and what you stand for (your purpose). If this is the benchmark, then culture and leadership will play a leading role.”

Van Tol had also expected value drivers to be a bigger challenge. “If they are to be innovative, organisations must start thinking long-term and cyclical. The things they find important must be translated into concrete business objectives they want to reach through innovation. And good value drivers are very important when determining the effectiveness of innovation. This is where many organisations struggle.”

Six characteristics of innovative companies

The international Global Innovation 1000 study by PwC Strategy& describes six characteristics of companies that excel in the field of innovation. Once again, culture and leadership are in the top three. As a result, the main obstacles identified in our Netherlands survey are certainly worth resolving.

High-leverage innovators and the larger universe of companies that report comparatively high performance vs. their peers share six key characteristics:

  1. Close alignment of innovation and business strategy
  2. Company-wide cultural support for innovation
  3. Close involvement with innovation program by leadership
  4. Deep understanding of insights from end-users
  5. Rigorous approach to R&D project selection
  6. Ability to integrate all of these things together to create a unique experience

Not enough resources

Resources occupy third place in the challenges faced during innovation. A third of all respondents said they do not have enough people to work on innovation. Therefore, the main challenge is to recruit people with the right capacities.

According the 22ste CEO-survey. , CEOs are also worried when it comes to attracting enough suitable employees. The survey mentions that 70% of CEOs are concerned about the availability of the desired skills in the market.

Our CEO survey shows that CEOs deemed problem-solving ability, versatility, cooperation, leadership and emotional intelligence to be crucial skills for future jobs. In 2016, the World Economic Forum published an overview of skills that are indispensable in the digital era of the 21st century. Competencies such as problem-solving ability and cooperation are already very important and critical thinking, knowledge transfer, and cooperation are the norm. As far as the future is concerned, characteristics like empathy, determination and versatility will become increasingly important. These properties help to improve resilience and success within changing social and work environments.

The untapped potential of STEM women

Innovation primarily involves developing and using new technologies. The extra people needed for innovation must have a technical background. One source of talent that has not yet been properly utilised is that of women with a STEM profile (science, technology, engineering and mathematics).

The Women in Tech report shows that 27% of girls in the Netherlands opt for a nature and technology education profile, compared to 42% of boys. In the end, only a small portion of girls end up in a technological position. Girls and women with a STEM profile can thus make a valuable contribution to innovation.

Many countries have already introduced policies that encourage girls and women to pursue STEM-related profiles and careers. Our survey, entitled Human value in the digital age, showed that the number of female participants in STEM courses doubled in the Netherlands between 2005 and 2014. There are also opportunities for women when it comes to soft skills needed to unite people with technology. Research by Hay showed that women perform better compared to men in competencies such as emotional intelligence, cooperation, versatility and inspirational leadership.

For the fourth year in a row, PwC researched the innovation climate in public and private organisations in the Netherlands. The Innovation Survey Netherlands 2018 involved interviewing almost one hundred participants about five themes: challenges, process and core values, cooperation, trends and the digital transformation. A third of all respondents work at C-level and another third occupy positions that involve innovation or R&D. A sizeable majority work for organisations with a turnover ranging from at least fifty million euros to one billion euros. Two thirds work for organisations with more than 250 employees.

Contact us

Wendy van Tol

Wendy van Tol

Partner, PwC Netherlands

Tel: +31 (0)62 353 44 50

Steven Schotanus

Steven Schotanus

Innovatiemanager, PwC Netherlands

Tel: +31 (0)61 017 97 22

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