Irish chief executives are more successful than their global counterparts at embedding a culture of innovation in their organisations. This is one of the key findings of the Irish edition of the 2019 KPMG Global CEO Outlook. The report surveyed 1,300 chief executives in many of the world's most dynamic organisations, including from Ireland, to discuss how they are confronting long-held market orthodoxies and assumptions that govern decision-making.
The survey found that Irish chief executives have also embraced a “fail-fast” culture in their organisations. More than four-fifths (82 per cent) of the Irish chief executives surveyed want their employees to feel empowered to innovate and try new things without worrying about negative consequences – a figure similar to their global peers (84 per cent).
However, Irish chief executives were markedly more successful in actually achieving this goal, with more than three-quarters (75 per cent) claiming to have done so, while only just over half of global chief executives (56 per cent) feel they have similar attitudes in place.
‘Experiment’
"Business leaders are encouraging their teams to try new things and experiment where success isn't guaranteed, and Irish CEOs appear to be successful in embedding the ethos that lessons from failure are valuable in supporting the innovation process," says KPMG managing partner Seamus Hand.
“This is indicative of the entrepreneurial culture we have in this country now,” he adds. “That’s due to a lot of things, but one of them is the nature and diversity of the talent we have here in the Irish economy.”
But there has to be an overall goal in sight. “Trying new things and being tolerant of failure is only useful if it’s aligned with the objectives of the business. If the business isn’t making profits these things don’t matter. It’s about asking how things can be done differently to help the organisation succeed. What you learn from failure and what you do next with that learning is important.”
It has to percolate up from the bottom. You have to empower people to challenge the status quo
Saying that such a culture is required is one thing; actually embedding it is quite another.
“Every organisation is different,” says Hand. “But a lot of the things people said in the survey resonated with me and the leadership team in KPMG. When trying to embed a culture like this it has to percolate up from the bottom. You have to empower people to challenge the status quo. It’s about using the best resource most of us have – our people – to come up with the ideas and putting in place processes to gather those ideas, evaluate them and implement them.”
Hierarchical structures
Traditional hierarchical structures and departmental divides may not lend themselves to such a culture, but this doesn’t mean organisations should sweep away tried and trusted approaches.
“These historic structures are fundamental to the success to date of many organisations,” Hand notes. “It’s not about tearing things down and building from the ground up all over again. There are different ways of looking at it. It might be possible to do it outside and have external incubators to test and trial the ideas. In other cases, it may be possible to make changes which are less fundamental.”
Having good cybersecurity systems in place enhances a business's reputation and helps build trust with customers
Leadership is also important. “One of the points that came through the research was in relation to the new type of leadership that companies need. It is changing from traditional siloed roles to much broader ones where a key requirement is greater collaboration.”
The need to be agile was also highlighted. “Agility is primarily the ability to react quickly to changes in customer needs,” Hand explains. “There are many ways for organisations to do this. Cyber is an example. Companies often see this as just something they need to have in place to protect their business, but it can be used as a platform to grow the business as well. Having good cybersecurity systems in place enhances a business’s reputation and helps build trust with customers. It also offers a platform to add more technology solutions to meet the needs of customers.”
Resilience is also important. “It’s almost counterintuitive but it is not resilience in terms of bouncing back from setbacks or getting through a downturn,” says Hand. “It is about succeeding in times of change and how organisations respond to change.”
Finally, internal disruption is becoming increasingly important. “Successful companies have to constantly challenge themselves and look at ways to disrupt their own businesses,” says Hand. “That’s what their new, smaller competitors will do to them, so they have to do it to themselves if they want to remain successful.”