Innovation, and How to Get There

Innovation has always been a great key to the success of an organization. For business, McKinsey & Co. defines it as the ability to conceive, develop, delivers, and scale new products, services, processes, and business models for customers. Getting there, of course, is the challenge, and engineers and executives appear to have different views on what it is and how to get there.

TE Connectivity, a technology firm that designs and manufactures sensors and connectors for a host of industries, surveyed a range of engineers and executivesin their industries from around the globe. It asked them about innovation. It turns out there is a disconnect within organizations on the very definition of innovation.

Among executives, 57 percent defined innovation as a total transformation while 55 percent of engineers said innovation is an iteration or improvement on existing technology or products.

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“I was surprised at the difference in how engineering and executives view an innovation, with most executives viewing it as a total transformation, but the majority of engineers viewing it as an iteration or improvement,” said Davy Brown, vice president and chief technology officer for TE industrial solutions. “This disconnect could lead to disagreement on what sort of activity an organization prioritizes to maximize value creation, potentially underfunding very valuable innovation that builds on established and trusted products.”

That finding was underscored by McKinsey, which reported less than 10 percent of executives surveyed are satisfied with their firm’s innovation performance despite more than 80 percent saying innovation is among their top three priorities.
“Many established companies are better operators than innovators, producing few new and creative game changers,” according to the report.

The TE survey noted particular roadblocks that impact the progress of innovation:
 

• Misaligned perspective on innovations between engineers and executives.
• Difficulties developing the skills needed to incorporate new technologies into their businesses.
• A lack of structure to support collaboration and knowledge sharing.

There is agreement between the two on some of the basic understandings. Engineers and executives agreed that innovation is a top priority, and that their organizations had a defined strategy and resources to improve products, processes, or a business model. The results also showed that over 75 percent of companies have increased their investments in cloud computing, factory automation, renewables, data connectivity, and e-mobility. Looking ahead, 45 percent of firms surveyed are prioritizing renewable energy, followed by cloud computing.

To be successful at innovation, a company has to put money and resources behind the objective. The TE survey shows their investment priorities reflect intentions to create an environment that supports innovation. More than 80 percent of survey respondents expect to increase investment in new design processes, lab upgrades, and talent.

“We believe that the right professional tools and access to continued learning are key in creating a workplace that fosters innovation,” said Emily Zhang, TE director of automation manufacturing, about the results.

What is the primary motivation to innovate? Money certainly plays a big part. McKinsey found that companies that have harnessed the essentials underlying innovation can generate economic profit 2.4 times higher than others who have not. But the TE survey shows executives and engineers differ on factors driving specific products.

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Executives, for instance, believe addressing unmet consumer needs is one of the top two motivators for innovation and look to improved customer experiences as a big indicator of success. Engineers, however, claim that adapting external global factors is a prime motivator and look to improved market share as a primary indicator of success. “These results reveal that executives are likelier to support innovation with the end consumer in mind, while engineers approach innovation more tactically,” according to the TE survey.

The results show a clear need for better alignment between engineering and executive teams. It can be the difference between staying competitive or falling behind.

“Engineers and executives should align around the most impactful innovation for their business, regardless of what type it is, to solve customers’ problems,” Davy said.

John Kosowatz is senior editor.