Companies that put twice as much emphasis on this form of innovation experienced faster growing profit margins. The most common business model innovation is in organisation structure changes, strategic partnerships and shared services (where back-office functions such as finance and HR work together through internal IT networks, leading to cost savings and efficiencies).
Other forms of innovation relating to products and services and processes remain important, but it is business model innovation that is expected to drive growth.
The survey revealed that most innovative ideas come from business partners, employees and customers. R&D was very low on the list of sources for ideas.
High-performing companies valued external sources (business partners and customers) the most. Not surprisingly, therefore, 75% of CEOs believed that collaboration between employees as well as with outside partners was important to innovation. Reduced costs, customer satisfaction and access to skills were named as the top three benefits of collaboration.
Expanding the innovation horizon: The global CEO study 2006
IBM Global Business Services
Review by Morice Mendoza