Executives Fall Short When Leading for Innovation, Global Leadership Study Shows



    Leaders Fail to Set a Clear Vision, Recognize and Reward Innovation

    NEW YORK, December 12 /CNW/ - Employees at some of the world's more
prominent companies don't feel that innovation is well managed or even
encouraged by their senior leaders, and it turns out their bosses agree with
them. According to a new study, three out of four global executives believe an
innovation strategy is critical to their company's success, yet fewer than
half are creating an organizational climate that fosters innovative thinking
and leads to innovation success. In fact, approximately 65 percent still don't
have an innovation strategy in place.

    The message from senior-level executives is that innovation, an important
driver of business growth, isn't getting the attention that it needs. The
results of the study by Oliver Wyman - Delta Organization & Leadership in
conjunction with the Economist Intelligence Unit indicate that without leaders
who establish a culture of innovation from the top and an organizational
structure that supports innovation, companies will falter and look elsewhere
for growth.

    These and other significant findings are part of the second report in the
Global Leadership Imperative series, an annual in-depth look at the challenges
of leading in today's complex, global marketplace. 293 senior executives from
large, global corporations participated in the survey representing 17
industrial sectors worldwide. The survey was supplemented with a number of
personal interviews.

    Executives agree that creating an organizational climate that fosters
innovative thinking is the greatest challenge to their leadership and to
delivering business results. One major obstacle is a shortage of leaders who
demonstrate through their behavior that innovation is essential to their
business success. Over half of respondents said leaders in their companies
fail to establish a clear purpose and direction for their innovation efforts
or create an open and supportive environment. Furthermore, executives believe
they are failing in the following areas:

    --  Maintaining discipline in the innovation process (82%)

    --  Recognizing innovation (73%)

    --  Taking an outside-in perspective (71%)

    --  Facilitating idea generation (68%)

    "Global organizations are realizing that innovation is no longer just
about investing in the next big product, nor does it have to begin in R&D,"
said Carole France, a Partner at Oliver Wyman - Delta Executive Learning
Center. "Senior leadership plays a critical role in fostering the right
climate for innovation. A company's culture, values and organizational
structure all contribute to the DNA that supports innovative thinking."

    Respondents are aware that it is essential to establish business
processes that translate new ideas into action. However, they state that their
companies, for the most part, are not structured to support generation and
execution of new ideas.

    Companies with Innovation Strategy Report Less Bureaucracy, More
Productivity

    Approximately 35 percent of executives said their innovation strategies
are "well-established." Companies with well-established innovation strategies
are less likely to say that their bureaucracy slows down decision making and
hinders innovation, than their counterparts, according to the study.

    Respondents with well-established innovation strategies were three times
as likely to say that their companies were skilled at both creativity/idea
generation and at transforming new concepts into commercial processes or
products.

    Commenting on who owns innovation at Whirlpool, Nancy Snyder, corporate
vice president of strategy and competency creation said, "We do have a
corporate-wide innovation strategy; it's part of our overall strategy for the
company. It's created by our top ten leaders, but it's owned at different
levels."

    Innovation Is Not Yet Part of the Culture

    The survey findings show employees at approximately half of all companies
do not believe that innovation is a business priority or that they are
expected and encouraged to develop new ideas. According to survey respondents,
changes to the corporate culture may be necessary in order to improve a
company's innovation capacity. "We don't think of culture and competencies
separately," said Neal Kulick, McDonald's vice president of global talent
management. "Talent initiatives are tied to, and integrated with, the
corporate strategy."

    Companies that believe they are successful in this area believe in
hard-wiring the importance of innovation and the critical role every employee
plays into the company's culture.

    About the Global Leadership Imperative: Building An Innovation Engine

    Oliver Wyman - Delta Organization & Leadership in cooperation with the
Economist Intelligence Unit conducted a survey including 293 senior executives
situated in Asia, Europe, and North America, with companies engaged in 17
different industrial sectors. Company annual revenues range from approximately
$1 billion to more than $10 billion. Just under 40 percent of the respondents
held C-Level positions or their equivalents, including CEO, CFO, and CIO,
while more than 30 percent were Vice Presidents or Directors, and 30 percent
were heads of business units or departments. The remainder were board members.

    Oliver Wyman - Delta Organization & Leadership

    Oliver Wyman is building the leading global management consultancy,
combining deep industry knowledge with specialized expertise in strategy,
operations, risk management, organizational transformation, and leadership
development. Delta Organization & Leadership works collaboratively with CEOs
and senior executives to meet the challenges of building talent, accelerating
organizational performance, and driving business success. Our Executive
Learning Center provides top-tier executive education around the world,
designing and implementing customized programs that develop the leaders
companies need to compete and grow.

    About MMC

    MMC is a global professional services firm with annual revenues exceeding
$12 billion. It is the parent company of Marsh, the world's leading risk and
insurance services firm; Guy Carpenter, the world's leading risk and
reinsurance specialist; Kroll, the world's leading risk consulting company;
Mercer, a major global provider of human resource and specialty consulting
services; and Putnam Investments, one of the largest investment management
companies in the United States. Approximately 59,000 employees provide
analysis, advice, and transactional capabilities to clients in over 100
countries. Its stock (ticker symbol: MMC) is listed on the New York, Chicago,
Pacific, and London stock exchanges. MMC's Web site address is www.mmc.com.

    About Economist Intelligence Unit

    The Economist Intelligence Unit is the world leader in global business
intelligence. It is the business-to-business arm of The Economist Group, which
publishes The Economist newspaper. The Economist Intelligence Unit provides
geopolitical, economic and business analysis on more than 200 countries, as
well as strategic intelligence on key industries and management practices.
With over 300 full-time professionals in 40 offices around the world,
supported by a global network of more than 700 contributing analysts, the
Economist Intelligence Unit is widely known for its unparalleled coverage of
major and emerging markets. More information about the Economist Intelligence
Unit can be found on the Web at www.eiu.com.




For further information:

For further information: Peppercom Catherine Carlson, +1 212-931-6128
ccarlson@peppercom.com

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