World Monitor Mag, Industrial Overview WM_November_2018_WEB_Version - Page 95

additional content 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. supported by EUROBAK 93