Innovation in Greater Washington? Hell yeah!

Business leaders say the metro area has a stronger track record of innovation than Atlanta, Austin, New York City, Boston, Miami and Raleigh, according to a survey of 185 local executives. The online nonpartisan survey of Greater Washington business leaders was a joint initiative of the Washington Business Journal and Cherry Bekaert LLP CPA & Advisors. Brand consultant McGinn and Co. and market research company REPASS conducted the survey.

The takeaway? Greater Washington businesses are not suffering from a lack of innovation-inspired self-esteem, generally giving themselves and the region high marks.

Forty-nine percent of survey respondents gave their organizations a “B” grade when it came to innovation activities. Companies with a formal innovation process tended to give themselves higher marks.

One quarter gave their own organizations an “A” grade, 22 percent a “C” and just 4 percent gave their organizations a “D” or lower.

The survey also found that:

• On average, nearly 20 percent of survey respondents’ companies were allocated to innovation. Firms with less than $100 million in revenue are less likely to allocate funds toward innovation while firms with $100 million in revenue or more allocate between 1 and 9 percent.

• About 46 percent of those surveyed said their organizations had a formal innovation process, while 47 percent said they did not. Public companies with $500 million or more in revenue are the most likely to have a formal innovation process, according to the survey.

• The person most likely dedicated to driving the innovation process is the CEO, with the chief information or technology officer a distant second.

Venture capitalist and innovation consultant Jonathan Aberman, managing partner of Amplifier Ventures LLC, said it is important for companies and organizations – especially large ones – to put into place formal innovation processes — or risk losing their competitive edge.

But the innovation process requires a conscious effort by the company to attract the creative workforce needed and buy-in from senior management to truly create ways to spur innovation.

“In order to encourage innovation you have to create a culture that rewards individual behavior around the concept of creativity,” Aberman said. “In order to do that you have to have a compensation structure, an information technology structure and a real estate structure and training structure that is in place to reward those kinds of behaviors.”

Companies can create “innovation centers” within the company — such as Booz Allen Hamilton’s Innovation Center in the District — or train employees in creativity and innovation and disburse them throughout the company, according to Aberman.

Smaller companies are less likely to have a formal innovation process because they must by their very nature be innovative in order to grow and beat out the larger competition – or else they fold, Aberman said.

Companies also incentivize innovation with company recognition, according to 62 percent of survey respondents. Another 41 percent (they could answer more than one) said financial rewards were also used to help spur innovation. About 20 percent of respondents said they provided no innovation incentives.

And the biggest barriers to innovation include the government, with 33 percent of survey respondents, too many regulations or policies being a close second with 30 percent, and politics coming in a distant third with 16 percent.

“In order to encourage innovation you have to create a culture that rewards individual behavior around the concept of creativity,” Aberman said. “In order to do that you have to have a compensation structure, an information technology structure and a real estate structure and training structure that is in place to reward those kinds of behaviors.”

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