Gaining competitive
advantage
Innovation and Competitiveness
in the eyes of CEOs
PwC 2nd Hungary CEO Survey
12 April 2013
Nick Kós
Country Managing Partner PwC
Hungary
Gaining competitive advantage
1. What is innovation?
2. Why is innovation so important to us?
3. How do CEOs see innovation and competitiveness?
4. The 1M USD question: how shall big companies become
entrepreneurial in these challenging times?
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1. What is innovation?
Toyota defines innovation as an incremental process,
Toyota implements a million new ideas a year, and most of
them come from ordinary workers!
Do your innovations create value for customers –
or just novelty?
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1. What is innovation?
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1. What is innovation?
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2. Why is innovation so important to us?
•
Disruptive changes in more and more areas
•
Countinous pressure on efficiency
•
Rapidly changing customer needs
+1: Employer branding: innovation is sexy
Intrapreneurship
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2. Why is innovation so important to us?
•
High priority for today’s companies: cultural change
needed
•
One of the priorities of PwC as Trusted Business Advisor
-PRTM Management Consulting as part of PwC now
•
PwC has a dedicated Innovation Office and Global
Innovation Network
•
New initiative: Global Innovation Survey
•
PwC Local initiatives – Innovation@Poland
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3. How do CEOs see innovation and
competitiveness?
16th Global CEO Survey – 1330 CEOs
•
•
2nd Hungarian CEO Survey - 171 interviews were
conducted with Hungarian CEOs between October and
December, 2013
CEOs priority: cost cutting and operational
efficiency…
…Meanwhile innovation isn’t possible without
investment
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3. How do CEOs see innovation and
competitiveness?
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3. How do CEOs see innovation and
competitiveness?
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3. How do CEOs see innovation and
competitiveness?
1. Improving operational
efficiency
Which factors have improved
your company’s
competitiveness in the past
12 months?
14%
2. Implementing cost
reduction
14%
3. New investments, new profiles
13%
…
8. Innovation
9%
…
26. R&D
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2%
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3. How do CEOs see innovation and
competitiveness?
1. Shrinking market
What is the biggest challenge
in your industry?
31%
2. Changes in legislation
26%
3. Changes in taxation
22%
4. Competition
22%
…
14. Innovation
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3%
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3. How do CEOs see innovation and
competitiveness? - government and regulators
In Hungarian CEOs opinion what role does the government take on?
The government supports innovation in the
private sector
30
The government is taking adequate steps to
improve the country’s infrastructure (e.g.
electricity, water supply, transport, broadband)
20
The government has maintained a level playing
field despite having stakes in private
enterprises
11
The government has reduced the regulatory
burden on corporations
11
0
5
10
15
20
25
30
35
And in comparison what should be its priority?
Creating and fostering a skilled
workforce
60
Ensuring financial sector stability
59
Reducing poverty and inequality
29
0
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10
20
30
40
Percentage of CEOs
50
60
70
február 2013
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4. An approach to corporate innovation by PwC - 1
First: Throw Out What You Don't Need.
•
Don't weigh your innovation portfolio down
•
Clean the pipeline
•
Reduce complexity
Next: Move Faster.
•
Severe conditions punish slow movers.
Now, Manage Capacity.
•
Take a hard look at what you have on hand and what you will need to survive for the next 12 months.
•
Find new sources
•
Identify constraints
Convert What You Have Into Something More Valuable.
•
Be imaginative and bold
•
Create business model innovations for current products
•
Innovate on cost reductions for existing products and services
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Leverage strong customer loyalty to provide new customer experiences
And Finally: Keep Your Head.
•
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Don’t let the current situation affect your basic good judgment.
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4. An approach to corporate innovation by PwC - 2
Getting closer to your customers:
•
...but how you develop it, how you sell it, how you deliver it, and what you sell with it.
•
For example, over half of CEOs in our 16th Annual Global CEO Survey are increasing the emphasis
of their company’s innovation portfolio on business model innovations.
Becoming systematic about innovation:
•
Effective innovators have structures in place to encourage entrepreneurial thinking at employee
level...
•
...while having strong leadership backing and centralised support.
•
Companies are also looking to harness the power of ideas that come from outside their
organisation.
The long haul:
•
Continuous innovators have a pipeline of incremental ideas as well as longer term big bets.
•
How are you creating the business of tomorrow, even as you keep your organisation lean today?
Embracing digital:
•
The complete change of operational models as a result of digitalisation is driving many forms of
innovation.
•
Are you fully taking advantage of what digital means for your business?
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If we want to turn Hungary
From Assembly lines in Electronics vs. …
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If we want to turn Hungary
… to high value added, innovative industries
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