Do CEOs See Innovation as a Priority?

This article was first published on: Innovation Excellence

We’d all like to be the best at everything and to make everything a priority, but that’s just not the real world.

So what did CEOs say was their priority when they were surveyed by KPMG for their Global CEO Outlook 2015.

Here are nine of the key findings from the report:

1- 62% of CEOs are optimistic on the economy

2- 54% are optimistic on company performance

3- 74% believe the competitive environment is getting tougher

4- 52% believe aggressive growth strategies prevail

5- 30% feel they are not risking enough for growth

6- 86% are concerned about the loyalty of their customers

7- 42% are pursuing a mix of both organic and inorganic growth

8- 47% of CEOs are pursuing significant geographic expansion

9- 73% feel regulatory environment having a big impact on their business

It is also interesting that American CEOs are more pessimistic about growth prospects than their international brethren:

Especially given that survey respondents see the greatest potential for growth in the United States. And while American, German, and Japanese CEOs definitely live in the most mature markets, part of their growth pessimism may come from more completely grasping the impact of the top four concerns of CEOs voiced in the survey:

“Maintaining status quo, while incredibly comfortable, is the most risky thing you can do in today’s world.” – Mark A. Goodburn, Global Head of Advisory, KPMG

Most interesting for me is the chart at the very top that shows fostering innovation as a lower priority than developing new growth strategies. Obviously innovation is just one component of any holistic growth strategy, but shouldn’t fostering innovation be a little more important if CEOs hope to create sustainable growth?

But it shouldn’t be surprising that this option scored the lowest, because my experience has been that leaders want innovation but they often aren’t willing to invest the dollars required when the rubber hits the road, and even more troublesome is that many leaders don’t understand how to foster innovation. Most CEOs see innovation as a project and not as an organizational capability they need to develop in order to help fend off disruption. Anyways, here are the top three barriers to innovation CEOs identified in the survey:

1- Rapidly changing customer dynamics

2- Unsure of which technologies will deliver the greatest return

3- Budget constraints

Maybe there is no money for innovation and companies are so worried about disruption is because the survey tagged the CFO as the executive gaining the most clout in the C-suite and the CIO came in last. Just a thought.

So what’s holding you back from making sustained innovation a priority?