Having found itself at the forefront of the technological revolution, the marketing industry has proven itself ready, willing and able to adapt to an increasingly diverse and sophisticated consumer base with cutting-edge tools and platforms; but when it comes to pushing the envelope on new ideas, there is new evidence that companies are not putting their money where it matters.
According to a Forrester survey released last month, only about one in 10 marketers includes innovation as part of their budget planning, even though 95% see innovation as important and valuable.
The problem, according to the analysts, can be found in three common management traits that adversely affect innovation potential: risk aversion, pragmatism and experimentation.
· Risk-averse firms – which include companies in highly regulated industries – tend to be fearful of change and avoid rocking the boat. According to Forrester, these companies, while few in number, are the least likely to voluntarily engage in the kind of out-of-box thinking that drives new ideas.
· Experimenters, as their name suggests, are most likely to try new concepts and push into uncharted waters, but they tend to fall short when it comes to long-term strategic thinking.
· Pragmatic – the vast majority of companies (more than 60%) can be characterized as pragmatic – which according to Forrester means they are consensus-driven and therefore slow to react to changes. While these firms engage in decisive marketing efforts, they lack the creative outlook to stay competitive when confronted by more forward-thinking rivals.
According to Bert DuMars, who co-authored the report, the companies most likely to have a strong culture of innovation are those that are single-mindedly focused on customer engagement. These firms – which DuMars calls customer obsessed — made up only about 3% of respondents to Forrester’s survey and are “defined by their obsession with the lifestyle, needs, and wants of their customer and build a culture that is both rare and inherently innovative.”
This parallels a similar finding by eConsultancy, which released a report in May, that ranks “knowing your customer” as one of four rules – including prototyping new technology and partnering – for sparking Disruptive Innovation. (eConsultancy lists seven examples of companies that have leveraged these rules into cutting-edge marketing campaigns).
While listening to customers is a crucial factor in driving innovation, DuMars notes that the key to sparking a change in priority needs to come from the top down. He recommends a concerted effort to encourage executive leadership to adopt the case for more investment in innovation. This should come in the form of a dedicated innovation budget which earmarks at least 10% of spending for “what’s next marketing programs.”
According to DuMars, the most consistent predictor of marketing innovation success is a “strong cultural bias toward innovation,” from the executive level down.
“Marketing innovation in the age of digital disruption, perpetually connected customers, and the customer life cycle is hard and getting harder,” he says. “What separates the marketers who are leading their organizations to accelerate marketing innovation velocity is the organizational culture they have created.”