The Pacesetters survey found that in-house R&D is key to fostering creative and forward thinking
Fast-growing businesses are invariably powered by their innovation, driving into new markets with a compelling customer proposition or improving their offer still further in markets where they are already strong.
The businesses selected for the Pacesetters research are a case in point: they are focused on the power of collaboration to deliver innovation and the intrinsic ability of technology to drive their development. Not all these fast-growing companies hail from the technology sector by any means, but each one of them shares the view that innovation has been a crucial growth enabler – and that this will continue in the years ahead.
R&D is the key
Sustaining innovation is difficult for any organisation and the companies in this survey are exploring a range of models for fostering new thinking. Most significantly, almost a third of these fast-growing companies (31%) say that establishing an autonomous research and development (R&D) team has delivered the greatest innovation benefit for their organisation.
This is not to discount the importance of other models, with significant numbers of businesses also reporting that they are innovating through alliances with third parties, including other companies, or developing their own corporate venturing arms or incubator programmes.
Nevertheless, in many fast-growing companies, the decision to carve out a separate and independent R&D function within the business has delivered huge innovation dividends. Such teams sit outside companies’ business units and functions but work collaboratively across the enterprise to identify and build out new products and services.
The CEO of an Advanced Manufacturing and Technology company in France puts it succinctly: “The business has been running successfully thanks to the R&D team. They are the lifeblood of the business.”
The power behind the products
The thinking behind having autonomous R&D teams is clear. Almost a third of the companies in this research (32%) say innovative product or service development has been one of the three most important drivers of their growth over the past three years. Ensuring there is a pipeline that will deliver further innovation of this type is therefore an urgent priority for fast-growing companies: an autonomous R&D team with a brief to deliver on that imperative represents a disciplined and strategic response to this need.
Autonomy is a crucial concept in this regard. Many businesses operating through traditional structures have found it difficult to avoid creating product silos, where innovative thinking is limited by the confines of the business unit in which they find themselves. By pulling the business’s brightest people out of these embedded positions, fast-growing companies are often able to break down such silos and develop new solutions that take their proposition in a new direction.
Innovating in this way, with organic teams driving the push for continual reinvention, also reflects the idea of collective endeavour, another shared characteristic of the fast-growing businesses in this research (32% say a sense of collective purpose is important to their corporate culture). By working across the business, rather than operating only in certain silos or functions, autonomous R&D teams are able to support this sense of shared purpose – and to feed off it, working with partners throughout the enterprise to drive innovation forward.