Organisations need to encourage innovation

Media release

23 January 2013

Next-generation leaders say organisations need to encourage innovation to stimulate growth, retain talent, and positively impact society

While Generation Y values innovation in an employer, only 26 percent of those surveyed believe their current organization’s leaders encourage practices that foster innovation

Seventy-eight percent of the world’s future business leaders believe innovation is essential for business growth, according to the global Deloitte Millennial Survey released today in Davos, Switzerland. However, as the economic crisis enters its sixth year, just 26 percent of Millennials (also called Generation Y) feel that business leaders are doing enough to encourage practices that foster innovation.

“Innovation at the institutional level is needed to sufficiently shift an organisation’s mindset to allow new ideas to truly emerge and thrive,” said Deloitte New Zealand innovation leader Grant Frear.

“While our current business leaders can debate how and where to innovate, it’s clear how much importance our future leaders place on innovation—not just as a driver of business growth but also as a catalyst for solving society’s most pressing problems.”

Deloitte surveyed close to 5,000 Millennials from 18 countries. When gauging the perception among future leaders about innovation and its impact on society, 84 percent say business innovations have a positive impact on society, and 65 percent feel their own company’s activities benefit society in some way.

The business community is regarded as playing a lead role in developing innovations that will benefit society. Almost half of the respondents (45 percent) believe business drives the innovations that most positively impact society, compared to government (18 percent) and academic bodies (17 percent).

Innovation is also an important component of talent recruitment and retention. Two-thirds of the Millennials surveyed say innovation is a key factor in making an organization an employer of choice. This is particularly relevant to many companies, attracting the ever-growing number of Millennials, who are forecasted to make up 75 percent of the world’s workforce by 2025.

However, discrepancies were found when Millennials were asked about the requirements for innovation:

• 39 percent of respondents believe that encouragement and rewards for idea generation and creativity is a requirement for innovation to occur, whereas only 20 percent say their current organisation operates in this way.
• 34 percent say providing employees with free time to dedicate to learning and creativity is key to an innovative environment, versus 17 percent who characterize their workplace that way.
• 32 percent consider openness and the freedom to challenge as key to innovation, versus 17 percent who say this is visible in their organisations.
• 42 percent believe in the importance of encouraging innovative thinking at all levels of the organisation, versus 26 percent who describe their places of employment that way.

“A generational shift is taking place in business as baby boomers, many of whom may have been wedded to the ‘old way’ of doing business, begin to step down from their leadership roles to retire,” Mr Frear said.

“Real opportunity exists for organisations to step up and create the conditions and commitment needed to encourage and foster innovation in their work environments. And there’s a tremendous upside if we get this right: we can better retain talent, remain more competitive into the future, and more positively impact society,” concludes Mr Frear.

For more information and to view the survey results, visit: http://www.deloitte.com/nz/millennialsurvey.

About the Deloitte Millennial Study
The research findings are based on a study conducted by Millward Brown. A total of 4,982 interviews were conducted online between 19 November and 19 December 2012. Approximately 300 interviews were conducted in each of 16 markets: USA, Canada, South Africa, Brazil, the Netherlands, UK, France, Germany, Spain, Russia, South Korea, India, Australia, Japan, China, Southeast Asia (Singapore, Thailand, and Malaysia). Screening questions at the recruitment stage ensured that all respondents were Millennials – born January 1982 onwards, were degree educated, and were currently in full-time employment. Interviews lasted approximately 15 minutes.

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

About Deloitte in New Zealand
Deloitte New Zealand brings together more than 800 specialist professionals providing audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. Our people are based in Auckland, Hamilton, Wellington, Christchurch and Dunedin, serving clients that range from New Zealand’s largest companies and public sector organisations to smaller businesses with ambition to grow.

Deloitte’s local experts draw on best practice and innovative methodologies from around the world as part of Deloitte Touche Tohmatsu. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s approximately 182,000 professionals are committed to becoming the standard of excellence. For more information about Deloitte in New Zealand, go to our website www.deloitte.co.nz.

ENDS

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