60% of companies plan to increase innovation budgets due to COVID-19, but threaten opportunities

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The study includes more than 65 senior decision makers – C-Suite executives from healthcare organizations in the US and UK with revenues of at least $ 1 billion – who were interviewed to examine the trends that dominated the healthcare, pharmaceutical and medical device business innovation sector during the COVID-19 pandemic.

“The pandemic has brought about an exciting shift in interest in innovation among corporate boards and the general public,” Robert Lowe, CEO and co-founder of Wellspring, said in a statement. “Unfortunately, our findings also revealed what many observers of business innovation have known for years – that a large majority of businesses today simply don’t employ many of the habits. necessary that translate into tangible and long-term innovation success. “

COVID stimulates innovation ambitions

The COVID-19 pandemic represents one of the most disruptive and troubling times in the history of business innovation. This has resulted in widespread efforts by healthcare, pharmaceutical and medical device companies to overhaul their innovation operations in hopes of effectively responding to a myriad of supply chain disruptions, explosions demand, digital transformation needs and other issues.

For example, according to this year’s study:

  • 60% of those polled said their business innovation budgets are expected to increase – and many respondents said they expect investment to increase significantly. This statistic overshadows companies that anticipate budget cuts by a whopping six-to-one ratio.
  • 57% of those surveyed said they want to be leaders and disruptors of innovation rather than follow the pack.

Execution threatens to derail innovation

Despite the promise of growing ambitions for innovation, many companies in the healthcare, pharmacy and medical device industries lack the consistent approach needed to generate material success from their investments, the statement said. . Of particular concern is that these execution missteps are large-scale and interconnected, ranging from C-Suite membership and coordination issues to poorly constructed innovation metrics and metrics.

C-Suite disengagement and logout

Only 6% of C-suite executives believe that a lack of C-suite commitment to innovation is a “very significant” barrier to successful innovation operations, compared to a third of vice presidents and innovators seniors at all other levels, from the director to the vice-president.

“Too often there is a mismatch between the C-Suite and other innovation leaders, C-Suite leaders simply adjust innovation strategies and then move on, leaving other Innovation Ops leaders achieve goals with minimal supervision, ”Lowe said. “As a result, employees fall back into old and inefficient habits and processes, instead of driving innovation forward. “

Metrics not suitable for use

Measuring innovation remains one of the biggest challenges for leaders of innovation operations in healthcare, pharmacy, and medical devices, with many still relying on a set of KPIs rather than a comprehensive measurement approach. Additionally, the KPIs that are in place do not accurately reflect the success of the innovation. For example, 43% of those surveyed said that a direct project-by-project financial calculation was their most common measure of innovation – almost a fifth said it was their only significant innovation measure.

“Now is the time for companies to rethink how they measure their innovation progress, but many still rely on metrics that are just not appropriate to measure innovation,” Lowe said. “This has created confusion among decision-makers, which has created a long-standing climate in which promising innovation initiatives must be ended too soon – or invested in safer but less impactful innovation projects. “

Disjointed innovation priorities

Conflicting priorities on the ground for innovation operations teams also hamper success. While an overwhelming proportion of respondents buy into their company’s high-level innovation strategy, their efforts on the ground often turn into parochial concerns and short-term solutions. For example, growing companies regularly cited innovation priorities such as conquering new markets or new white spaces (76% of respondents) and the introduction of disruptive innovations (59% of respondents) as important or very important. However, these two results were the least important among all other companies.

“Having big ambitions is great, but without long-term strategic priorities that can be purposefully pursued throughout a company’s innovation operations, the chances of success are virtually nil,” Lowe said. “Better orchestration of strategic innovation programs must be a major concern for business decision-makers, especially as they plan to increase investments in innovation after COVID. “

Disorganized approach to collaboration

Almost two-thirds of respondents said that a lack of internal coordination between innovation groups was a “very significant” or “somewhat significant” barrier to innovation success, making it the number one barrier according to respondents to this year’s study.

“It would seem logical to make interdepartmental collaboration a priority, but unfortunately it is not, which wreaks havoc on both the performance of innovation operations and the bottom line,” Lowe said. . “As innovation departments grow, many companies now have at least several disparate innovation teams, which too often results in poor communication and disorganization. Left unchecked, companies risk wasting their increased investment in innovation at record rates. “

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