INNOVATION:Converting new ideas into products or services becomes a lot easier and more successful when you appoint an innovation expert, according to a new report

THE AGE-OLD challenge of turning ideas into products for market ahead of competitors is leading global companies to increasingly consider the appointment of an innovation executive.

For companies with a business strategy dependent on innovation the move is an attempt to improve the frequency and sustainability of innovation by changing their organisational culture.

To discover the impact of such a role, the Economist Intelligence Unit, on behalf of Accenture, has surveyed over 600 senior executives in Europe and North America. The report found that while the majority of companies surveyed had business strategies based on innovation, only one in five had appointed a chief innovation executive. The majority, or 48 per cent, had dispersed responsibility for the role among a number of executives.

Those companies found to be most successful in managing and introducing innovation into their business strategies were those that had appointed someone to this role, the report noted. Andy Tinlin, senior executive with Accenture, said more agile companies appeared to be more likely to create a new role such as innovation executives. "Having an innovation executive is most likely a symptom of an already innovative company," he says.

When talking about innovation the survey uses the word in its widest sense. "Innovation is not just about launching new products and services. It is an organisation-wide view to do things differently than before. The fact that you need a specific person for that is kind of intuitive and many companies are starting to instutionalise that role because they realise the need to be adaptable," he says.

The survey also identified recurring barriers to a successful innovation strategy with many executives reporting the need to reduce the time to market and change the organisational culture.

More than a quarter said this process was hampered by the lack of an innovation strategy and many respondents also pointed to a concentration on short-term profits over longerterm growth. Just 15 per cent of respondents said they were satisfied with their company's ability to convert ideas into service offerings and only 13 per cent said the firm could do this repeatedly.

According to Tinlin, innovation is quickly moving from being a back-office research and development function. "That is where you really see a difference between high performing companies, they treat innovation as a core business process as equally as important as supply chain or customer management with clear performance goals and metrics."

The role of the innovation executive is evolving at a time when the "multi-polar world", of the US, Japan and western Europe, is being dispersed by the growth of multi-nationals in emerging economies that are increasingly adept at innovation, the report noted.

While half of respondents regarded the US as the most innovative business region, Asia is now seen as more progressive than Europe. Of those questioned 38 per cent said they considered Asia "highly innovative" compared with just 22 per cent for western Europe.

Respondents from the UK and Germany agreed with this view and rated the levels of innovation in companies in the Asia Pacific region higher than in their own countries. Asked whether there was any pattern to the background of the executive appointed to the innovation role Tinlin said those from a marketing or commercial background frequently assigned to the position.

"One reason for that is in their roles to date they would have been working cross functionally more than many other people. The key to good innovation is knocking down the barriers to functions," he says.

Tinlin identified the pharmaceutical sector as one where the need for an innovation executive was compelling. "Pharmaceuticals is probably one of the best examples of where there is an absolutely time critical component to this innovation role. The extent to which innovations are copied drives the need to innovate faster and to have someone who's primary responsibility is to make that happen."

Another industry that is heavily reliant on innovation is the alcoholic drinks sector, he said. A common practice is to establish innovation units separate from the core business to develop brands and incubate them. "Within a year or so it will be clear if the innovation has taken off and then it can be folded back into the main company. That is another role of the innovation executive, managing the development of products on the edge of the business."

He says companies considering appointing an innovation executive should allow a full business cycle of 12 months to allow the benefits of the role become clear. "My experience in the marketplace is that it takes between 9 and 12 months to really bed into that role. In fact, at a very prosaic level you almost need to go through the whole business cycle once."

For the role to be effective, the business strategy and objectives have to be amended he adds, because if they don't doing the job properly is "going to be pretty hard".

"The role starts to become effective when everyone starts to accept that there is an innovation person and that business is going to be done in a different way."

The survey respondents work across broad range of industries, including financial services, technology, energy, aerospace, media, manufacturing and professional services. They work for companies with minimum annual revenues of $750 million (€480 million), and almost two-thirds for corporations with revenues of at least $5 billion (€3.2 billion).