According to the IBM Global CEO Study 2006, 65% of the world's top corporate leaders plan to radically change their companies in the next two years.
Yet almost half of the 765 survey participants reported achieving only some or no success in managing fundamental change in the past. Considering the inherent challenges, what is driving companies to take such drastic measures? It comes as no surprise that global competition fuels much of the demand for change.
Much of the change will focus on product innovation. Fashion industry participants know better than anyone that innovation drives growth. But we also know that it's not just about product innovation anymore. It's also about understanding how to innovate on operational processes such as collaborative development and supplier relationship management.
Fashion companies are increasingly recognizing that collaboration with external partners is a critical source for new product and process innovation. While more than 75% of the CEOs in the survey ranked business partner and customer collaboration as top sources for ideas, less than half of the leaders in mature markets said their organizations currently collaborate extensively.
Internal R&D ranked eighth and was cited by only 14% of CEOs as an important source for new ideas. In the fashion and many other industries, this collaboration 'gap' is holding back innovation.
The survey also supports a link between a company's financial performance and its ability to effectively collaborate. Out-performing companies - those with the highest 5 year revenue growth (CAGR) – reported using external sources 30% more than underperformers. CEOs that are effectively collaborating with partners stated that top benefits are: reduced costs, higher quality and customer satisfaction, access to skills and products, increased revenues, and access to new markets and customers.
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