IPG AND KOBE SURVEY REVEALS: COMPANIES NEED TO TAILOR ORGANIZATIONAL SETTINGS TO FUEL DIGITAL BUSINESS MODEL SUCCESS Featured

03 October 2022

For the very first time, a study of IPG together with Kobe Research & Consulting analyzed 75 leading companies regarding how they organize their business model innovation activities along the main phases of innovation. Here is a glimpse look into one important finding.

The study proves a clear need to differentiate organizational settings in light of ambidexterity. While success patterns for innovation around core business appear pretty straightforward and tend to be stable over time, for innovation beyond core it is essential to adapt to specific needs along the different phases of innovation.

Screenshot_2 IPG AND KOBE SURVEY REVEALS: COMPANIES NEED TO TAILOR ORGANIZATIONAL SETTINGS TO FUEL DIGITAL BUSINESS MODEL SUCCESS

 

For 80% of companies, building new digital business models is a top priority, but how organizational setups need to be configured often is unknown. It clearly limits success if a company can’t answer how such kind of innovation activities e.g. need to be structured, who is making final decisions, or where these activities should be located.
What makes it more complex, an increasing number of companies tries to establish complementary revenue streams in existing business models and pursue more radical forms of innovation in parallel. The need to distinguish organizationally, as the most important finding of our study, up to this point is not understood well enough.

Key finding business model innovation "around core"

  • "Digital team across business units" is a model for success
  • "No defined organizational structure" inevitably results in the failure of many innovations
  • Involving external partners under clear rules of the game promotes innovation success in the long term
  • Top management as a decision-maker is overrated
  • Geographical proximity to the business unit leads to failure in two out of three cases

Screenshot_novi IPG AND KOBE SURVEY REVEALS: COMPANIES NEED TO TAILOR ORGANIZATIONAL SETTINGS TO FUEL DIGITAL BUSINESS MODEL SUCCESS

 

Key finding business model innovation "beyond core"

  • The targeted adaptation of organizational structures in the course of the phase is decisive for success
  • Middle management as a bridge between top-down and bottom-up is the key to innovation
  • Decisions by top management to pursue ideas often fail
  • Proximity to the core business in the search for radical new ideas is harmful
  • The value of specialized support teams for business innovation proves questionable

Screenshot_novi2 IPG AND KOBE SURVEY REVEALS: COMPANIES NEED TO TAILOR ORGANIZATIONAL SETTINGS TO FUEL DIGITAL BUSINESS MODEL SUCCESS

 

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