COVID-19 spurred myriad shifts in the healthcare system, including a widespread adoption of virtual care and a push toward speedier innovation — especially in the form of vaccine development.
Not surprisingly, industry successes have prompted health-adjacent companies, including many in the pharma and device realms, to boost their innovation ambitions. That was among the main takeaways from Wellspring’s latest R&D and Innovation study, unveiled by the company this week.
The study also found, however, that companies are struggling to execute on those lofty ambitions.
Surveying some 65 leaders across companies with revenue in excess of $1 billion, the study found that 60% expect an increase in corporate innovation budgets. Nearly the same percentage of respondents, 57%, hope to be innovation leaders rather than followers.
“Companies were very bullish on innovation this year,” noted Wellspring CMO Chris Townsend. “On one level that’s not a surprise — you can think of it as a COVID hangover. Now that we’re finally stabilizing operations after the year, it’s time to re-invest in things that may have gone sideways last year.”
Townsend stressed, however, that the notion of “innovation” itself is often misinterpreted by many leaders, and that a lack of a long-term strategy can derail organizational ambition.
“Most companies find it difficult to have the deliberate, long-term strategies that allow them to confront a lot of these bigger trends that are coming,” Townsend explained. “How they fund innovation and how they manage it is all over the map. They do everything on a case-by-case basis, and there’s no corporate-wide sense. That shows up in company performance.”
The report offered several steps companies can take to remedy such issues, starting with centralized R&D operations. Townsend noted that, in the healthcare industry in particular, companies are beginning to take steps towards some of those recommendations. They include making sure that innovation units have a direct line to senior leadership.
“The danger is, if leadership decides to cut the innovation budget, the team will get disbanded and the good work they may have been doing will go to the wayside,” Townsend continued. “There are lots of shoots of green out there. The question is how to make it sustainable and how to make it a core part of the company.”