Businesses must back bright ideas

European firms could go out of business if top management continues to stifle employees’ innovative ideas, according to consultants and top industry executives speaking at the 1998 Arthur D Little European Innovation conference in Munich.

ADL said businesses will lose competitive advantage if they fail to encourage vision and reward people for creative high-risk, high-impact, product ideas.

“My fear is that many companies will stop innovating, faced with a recession and Europe will lose out in terms of competitive strength,” said Dr Richard Granger, ADL’s worldwide vice-president of technology and innovation management.

“The way to survive is to be very aggressive about what we call strategic innovation but there is a risk that businesses will question whether they should go forward by innovating and developing new products.”

Business process reengineering and cost cutting has created the lean, mean organisation, so that businesses do not have the option of cutting back. Granger believes that firms can only be successful if top management invests more money in the development of new product ideas and becomes more involved in the product development process.

“The culture of the organisation has to be one where people get public recognition for their bright ideas. Senior management has to create such an environment.” He added: “There are many potential business creators, but we perhaps don’t listen to them and we fail to get the best out of them.”

Granger cited ABB as the best example of a firm in the strategic innovation bracket, where chairman Percy Barnevick has led a top-down strategic innovation programme and adequately invested in it. The firm invested $10m to enable people to put forward their ideas and ensure a step change in the organisation’s thinking, market share and profitability. He believes this has made a difference in terms of tens of percentage points.