World Monitor Mag, Industrial Overview WM_November_2018_WEB_Version | Page 95

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more likely to report strategic alignment. Of that group, 77
percent said their innovation strategies were highly or closely
aligned with their business strategies, compared with 54 percent
of respondents who reported growth typical of their peers,
and 32 percent of respondents who reported slower growth.
Similar differences hold true for companies that reported higher
profitability.
We also found differences when it came to strategic alignment
among the three innovation models into which we have
segmented companies over the past 11 years: Need Seekers,
Market Readers, and Technology Drivers. In our survey this
year, need seekers made up 34 percent of total respondents.
(Note: Figures have been rounded.) These companies engage
customers directly to generate new ideas, then develop original
products and services and get them to market first. Market
readers, accounting for 23 percent of our respondents, are fast
followers. They typically generate ideas by closely monitoring
their markets, customers, and competitors, focusing largely
on creating value through incremental innovations to current
products. Technology drivers, 44 percent of our respondents,
depend heavily on their internal technological expertise to
develop new products and services, driving both breakthrough
innovation and incremental change, in hopes of meeting
the known and unknown needs of their customers via new
technology.
It is helpful to consider the breakdown of responses by
innovation model, given need seekers’ own perception of relative
success: 65 percent of need seekers report they have higher
profitability than their peers, as compared with 38 percent of
market readers and 43 percent of technology drivers. And need
seekers also report higher revenue growth (59 percent) than
market readers (35 percent) and technology drivers (36 percent).
It is significant, then, that 84 percent of need seekers say their
innovation and business strategies are closely aligned, whereas
this is true for only 48 percent of market readers and 53 percent
of technology drivers (see “Need Seekers Embrace Strategic
Alignment”).
Conversations with innovation leaders at high-leverage
innovator companies revealed a similar focus on alignment.
At Amadeus IT, “our ambition is to have a strong alignment
between our business strategy and the innovation strategy,” says
Marion Mesnage, head of research, innovation, and ventures.
“We’ve increased the alignment and are strengthening it.” In
the past, R&D at the company — a $5.8 billion global travel
software and information technology business headquartered
in Spain — tended to be technology-centric, Mesnage says. But
it is shifting its focus more toward understanding customer
needs and identifying growth opportunities within the company’s
business units, which serve airlines, hotels, tour operators,
insurers, car rental and railway companies, ferry and cruise
lines, travel agencies, and individual travelers. “Right now,” says
Mesnage, “we are running strategy sprints to gather people in
the same room from different business units with the end goal
of co-creating our next wave of innovation themes.”
At DIC, a Japan-based global manufacturer of printing inks,
organic pigments, and synthetic resins, top management
has also moved in recent years to align the company’s R&D
activities more closely with its business strategies. DIC splits
R&D operations into two divisions. The direct-to-customer
technology division, which focuses on incremental innovation,
is always in sync with the business strategy and works closely
with the business units. “The organization of these activities
is quite closely linked,” says Kiyotaka Kawashima, executive
officer and general manager of R&D. “The budget control
and administration are both done by the business units, and
they approve the themes of technology and R&D.” A separate
division, which focuses on basic innovation, has also been more
closely aligned with the business strategy in recent years, but
has more leeway in deciding which projects to pursue.
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