Global firms are staking their futures on their ability to innovate. Yet they will fail to capitalise on investments to boost innovation due to staff fears of collaborating with colleagues abroad a study by the Economist Intelligence Unit has revealed.
The EF Education First sponsored report – The innovative company: How multinationals unleash their creative potential – shows a drop in confidence when employees share ideas outside of their departments and collaborate with colleagues in other countries, departments and hierarchies. The study found that 4 out of 5 businesses believe investing in communication skills would increase innovation but for many spend in this area is low or non-existent. The report also suggests that the onus to provide workforces with the skills to unlock innovation sits squarely with business, with 75 percentof government officials stating its ‘not my responsibility’ to fix creativity gap in firms.
Creating new products and services is a top-three priority for more than half of the 350 C-level respondents surveyed, more important than cutting costs or investing in talent. It has become such a key differentiator that three out of four firms plan to increase their investment in innovation. Two key skills are highlighted as being central to the development of an innovative corporate culture – those of creativity and international communication. However, this study shows that companies are failing to realise their aspirations for innovation because too many employees lack the skills and confidence to share ideas across hierarchies, departments and countries and are operating in silos.
Whose responsibility is it anyway?
Governments and business differ in who they believe is responsible for providing the skills needed to unlock innovation. Some 55 percent of executives said it was solely their responsibility to provide training to foster innovation. And more than one-third said skills provided in their countries are not adequate to improve the ability of the workforce to innovate. Yet 75 percent of government officials surveyed said it is not their job to address the creativity skills gap in corporations, leaving this responsibility to the companies themselves. The public officials see the main problem as making adults more aware of the training that is already on offer. “Poor communication skills is causing an innovation bottleneck for multinational firms.” EF Education First sponsored study shows employee confidence falls when collaborating abroad; Firms could fail to capitalize on innovation; 81 percent of firms said investment boost in communication skills would increase innovation; 76 percent of firms plan to increase their investment in innovation; 75 percent of government officials said ‘not my responsibility’ to fix creativity gap in firms
Global firms could fail to capitalize on investments to boost innovation due to confidence issues in communication skills, according to a study by the Economist Intelligence Unit. The report shows a drop in confidence when employees share ideas outside of their departments and collaborate with colleagues in other countries, departments and hierarchies. The study – The innovative company: How multinationals unleash their creative potential – found respondents’ confidence levels drop from 96 percent when communicating with colleagues in their own departments to 72 percent with colleagues in other countries. Some 87 percent of companies agreed cross-cultural collaboration produces innovative ideas, but half said cross-cultural differences make it harder to share ideas with colleagues in different countries.
“You keep hearing the phrase ‘innovate or die’,” said Peter Burman, President of EF Corporate Solutions. “CEOs know this is true and say innovation is their top priority, but clearly they face a bottleneck in innovation as employees lack confidence communicating with colleagues in other countries. Companies have to rethink the skills people need to be confident in sharing ideas across hierarchies, departments and countries.” The study found 81 percent of 350 respondents said improving cross-border communication skills in staff would boost their firms’ ability to innovate. Yet nearly 30 percent of firms surveyed concede their spending here is inadequate or non-existent. The study found while CEOs use idea-sharing processes a lot (95 percent), engagement tails off outside the c-suite, with managers (78 percent) and department heads (77 percent) less likely to use them. This casts doubt on whether formal processes can involve everyone in innovation.
Innovation tops global business priorities
The study found global firms are staking their futures on their ability to innovate. Creating new products and services was a top-three priority for 54 percent of survey respondents, more important than cutting costs (42 percent) or investing in talent (33 percent). Over three-quarters (76 percent) of firms plan to increase their investment in innovation further over the coming three years, with almost one-third (31 percent) set to increase it significantly. More than two-thirds (71 percent) have ramped up investment in innovation over the last three years, and a quarter (25 percent) have done so significantly (defined as increasing investment by 20 percent or more).
Whose responsibility is it anyway?
“Two key skills are highlighted as being central to the development of an innovative corporate culture – those of creativity and international communication,” added Burman. “Governments and business differ in who they believe is responsible for this training.” Some 55 percent of executives said it was solely their responsibility to provide training to foster innovation. And more than one-third (37 percent) said skills provided in their countries are not adequate to improve the ability of the workforce to innovate.
Yet 75 percent of government officials surveyed said it is not their job to address the creativity skills gap in corporations, leaving this responsibility to the companies themselves. The public officials see the main problem as making adults more aware of the training that is already on offer. “Governments don’t feel responsible for training the existing workforce,” said Claes Ceder, executive vice president at EF Corporate Solutions. “But they know they have to address the communication-skills gap to ensure students about to graduate are more innovation-ready for tomorrow’s job market. The good news is there is a lot that can be done in a relatively short period of time to address this, but governments have to be prepared to act now.”
Lack of innovation culture
Firms aspire to create a culture of experimentation, but often fail to follow through. In the survey, 30 percent of respondents said their firms lack a culture that encourages new ideas from everyone; 30 percent said their companies lack a culture that allows for failure; and 34 percent said their companies do not allow time for employees to experiment on their own projects. Many companies have formal processes to gather ideas, but these are often ineffective. The study found that a creative culture is one in which each employee feels encouraged to suggest ideas, and in which there is a high tolerance of failure. But many companies do not take steps to ensure those conditions are present. In an interview for the study, Tammy Lowry, Global Head of Learning and Organisational Effectiveness at Roche, said: “Unfortunately, much training focuses on making ideas ‘right and wrong’ through testing, so that individuals may lose that sense of confidence even as their knowledge increases.”
About the research
The innovative company: How multinationals unleash their creative potential is an Economist Intelligence Unit report, sponsored by EF Education First. It explores the challenges companies face when trying to promote innovation across departmental and national boundaries. Two global online surveys, one with senior corporate executives and the other with government officials, carried out in October and November 2014. The corporate survey sample totals 350 respondents, all of whom work for companies that operate in at least one other country outside their home markets. Over half (54 percent) are C-level or board-level executives. The government officials sample totals 57 respondents, all of whom are involved in the design and implementation of adult education and training policy.
