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Post co-authored by Rob Shelton, PwC’s Global Innovation Strategy Leader

Last year if you asked a CEO what he or she is doing to achieve growth, the answer would have been investing in China. This year the answer is innovation.

Business executives are banking on bold innovation to meet aggressive growth targets, so they are taking innovation more seriously than ever before. In the spirit of Peter Drucker who said, “innovation is work,” business executives are focusing less on informal processes that produce incremental improvements to internal operations and more on formal innovation approaches that generate “breakthrough” and “radical” innovation.

In PwC’s latest innovation study, 69% of 1,757 senior executives contend having a well-defined innovation process is important to establishing a culture of innovation. This rigor is necessary to improve the chances of innovation success. To make headline-worthy innovations happen, a significant percentage of companies are looking to new innovation models such as open innovation (collaboration with outside partners), design thinking (looking at the need from an anthropologist’s perspective), corporate venturing (investing in startups), and incubators (small groups of intrapreneurs that use rapid prototyping).

Corporate venturing is the most popular approach among technology companies. To meet tenacious growth targets, established technology companies are teaming with technology’s up and comers to make swift and sweeping advances that lead to increased market share. In forging these strategic partnerships, high-tech companies are taking risks and thinking big.

Companies often start with individual freedom or open innovation and progress to other models. What we’re experiencing right now is companies transitioning to the next stage of innovation. Within five years, we are going to see a different landscape, where incubation expands and corporate venturing and design thinking catches fire.

Executives increasingly realize that courageous innovation is imperative in the digital age where potential disruption is lurking around every corner. Any no-name company or “digital disruptor” can quickly capitalize on technology and a novel business model and bring a corporate behemoth to its knees. Forward-thinking companies aren’t waiting around to see what happens. They are deflecting disruption with disruption by innovating their approaches to innovation.

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