B U S I N E S S P U L S E©

When it comes to innovation of products/services, 30% focus on

where do CEOs place their emphasis?
Are CEOs in NEWi focused more
on the innovation of products/
services, business operations or
on their overall business model?
The latest Nicolet Bank Business
Pulse© sought to answer these
questions and uncover what CEOs
CEOs: see as the benefits - and barriers -
of innovation.
Benefits/ CEOs and Business Owners in NEWi
place somewhat greater emphasis on
the innovation of their organization’s
Barriers to products and services (46%) and
somewhat less emphasis (32%) on
Innovation innovation in operations and
innovation in their overall business
model (22%). Interestingly, there
are no significant differences by
sector of the economy, nor the
size of the business.
Results in NEWi are quite similar to
the recent study of CEOs globally
by IBM Global Business Services.
IBM found that about 41% of CEOs
globally focus most on innovation
innovation in their operations and
29% are focused on business model
innovations. When correlated with the
five year financial growth patterns of
the businesses, IBM found that those
businesses that placed greater emphasis
on business model innovations
outperformed those that placed
greater emphasis on the innovation
of products/services and operations.
Naturally, financial growth
performance is one of the key benefits
of innovation, but it is clearly not the
only direct benefit. CEOs were asked
about a series of possible benefits of
innovation and how they impact
their organization. The two most
significant benefits cited are higher
customer satisfaction and increased
revenue: 76% of CEOs say that
higher customer satisfaction is a
major benefit of innovation for
their organization, 23% say it is
a moderate benefit, 1% say it is a
minor benefit and none indicate
that it has no benefit.

Executive Summary Part Two:

Data Taken April/May 2007

“I’m not getting information; I'm not managing.”

John Torinus, President & CEO — Serigraph, Inc
Increased revenue is identified
nearly as highly as customer
service as a benefit with 73%
saying it is a major benefit, 22%
say moderate, 4% say minor
and 1% say it has no benefit.
Behind customer service and
increased revenue as major benefits
are: reducing costs (55% major
benefit), access to new markets
(40%), increases strategic flexibility
(39%), increases their focus (35%),
faster time to market (31%),
enhances employee morale (27%)
and reduces risk (20%). Many
of these benefits are directly
intertwined with one another.
As a business provides higher
customer service they will also,
in most cases, retain or increase
revenue; reducing costs may also
increase revenue; increases in
employee morale may lead to
higher customer satisfaction, etc.
In a global economy there
are increasing pressures for
organizations to be innovative,
nimble enough to move rapidly
and to produce results faster.
Ultimately, these pressures fall
squarely on the shoulders of the
CEO. Yet CEOs are often faced
with a series of barriers that
impede innovation.
When asked to identify some
of the significant barriers to
innovation NEWi CEOs indicate
that having limited time (27%
major; 37% moderate) and limited
funding (21% major; 35% moderate)
are two of the more significant
barriers to innovation. Other
barriers that may come into play
for some organizations include:
economic uncertainty (14% major;
47% moderate), government
regulations (14% major; 31%
moderate), having products or
services that don’t lend themselves
to innovation (9% major; 24%
moderate), the nature of their
organizational culture (5% major;
26% moderate) and the perception
that things are going so well for the
organization that there is no need to
innovate (3% major; 20% moderate).
Having limited time and funding
are much more of a challenge for
organizations with 100 or fewer
employees than for larger
organizations: 71% of CEOs with
100 or fewer employees say that
having limited time to devote to
innovation is a major or moderate
barrier for them compared with
46% of CEOs with more than
100 employees. Similar results are
found for limited funding as a
barrier: 64% of CEOs with 100
or fewer employees say having
limited funding for investment
in innovative ideas is a major or
moderate barrier compared with
35% of CEOs with more than 100
employees. Smaller organizations
may simply have fewer resources
to devote to innovation.
Innovation will continue to be an
imperative for businesses to remain
competitive in the global economy.
The key to success, to an ever-
increasing degree, will be dependent
upon CEOs being able to create an
organizational culture that thrives
on the creativity and collaboration
of employees.

Sources/Resources:

“Forces Shaping the Business Environment”

http://www.mckinseyquarterly.com/article_
page.aspx?ar=1754

“Reinventing Innovation at Consumer

Goods Companies”
http://www.mckinseyquarterly.com/article_
abstract.aspx?ar=1870&L2=21&L3=35

“Expanding the Innovation Horizon”

http://www900.ibm.com/cn/services/bcs/iibv/
summarypdf/Global_CEO_Study_Executive_
Summ_2006_EN.pdf

How the Study is conducted

The Nicolet Bank Business Pulse© is a Quarterly Study of CEOs in NE Wisconsin (Brown,
Calumet, Door, Kewaunee, Manitowoc, Marinette, Oconto, Outagamie, Shawano, Winnebago
Counties). It is designed and implemented by IntellectualMarketing, LLC.
Participants include: 28% in manufacturing; 25% in services; 19% retail trade; 5% wholesale
trade; 6% finance, real estate, insurance; 5% in transportation, communications, utilities; 6% in
construction; 7% in other industries. 16% have fewer than 6 employees; 33% have 6-25; 19%
have 26-50; 6% 51-100; 18% 101-250; 2% 251-500; 3% 501-1,000; 2% have 1,001 or more.
Questions to Dr. David G. Wegge (920) 217-7738; david@intellectualmarketing.com