The new imperatives in a post-COVID-19 world: Innovation, agility and openness

As the post-COVID-19 world resumes, companies are still grappling with how to incorporate innovation in a way that reflects the current and future business outlook for their sectors, especially in areas where innovation must be prioritized to remain competitive.

According to KPMG’s The New Imperatives: Innovation, Agility and Openness report, 59 percent of corporate innovators reported that their mandate was changing or expanding to include new activities and objectives in July 2020 — just as organizations considered resuming general business operations across various industries while keeping certain online aspects.

Eight months later, the survey found that 81 percent of corporate innovators say the pandemic is still impacting their innovation strategy or investment, with 42 percent of respondents describing the impact as “significant” or “extreme.” Engineering and construction were the industries that reported the most impact, while financial services reported the least. Industries like financial services have had a much easier transition to remote services since the onset of the pandemic.

Below are three ways corporations can prioritize transformational projects.

  • Consensus-driven decision-making, legacy systems, a culture that punishes people for taking risks and failing, and annualized processes all tend to reduce agility.
    When asked to compare their organization’s agility, 63 percent likened their organizations to a cruise ship or supertanker, meaning that they are not adapting quickly and not very agile. “We’ve actually found that the larger the organization, the harder it is to maneuver and respond quickly,” said Cliff Justice, national leader of Enterprise Innovation at KPMG U.S. “It’s important for organizations to establish microcultures or processes where projects can attract funding, assemble teams and move quickly within large organizations.”
  • Consistent openness to outside ideas and trends will contribute to revenue growth.
    Open innovation, including the ability to collaborate with outside partners and integrate external intellectual property, is still not standard for most companies. Professional services and healthcare were slightly more open than average (6.3 on a 1–10 scale), while government agencies and public sector entities were less open (2.8).
  • Incremental innovation should be prioritized.
    When innovators were asked how they would divide their time in an ideal world, they reported they would increase the time they spend on adjacent and transformational projects (Horizon 3) and downshift their incremental activity (Horizon 1) to just over one-third of the innovation portfolio.

“Above all, organizations should speak transparently and celebrate any innovation initiative within the organization, especially in this age of continual virtual interaction coming out of the pandemic,” Justice said. “It’s not only about advocating for technology but also about illustrating how it will help enable more streamlined and meaningful work.”

To learn more about the new imperatives, please download the full report here.

Media contact

Stephanie Trefcer

Stephanie Trefcer

Senior Associate, Communications, KPMG US

+1 201-505-6844

 

 

Cliff  Justice

Cliff Justice

National Leader of Enterprise Innovation, KPMG US

+1 713-319-2781

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