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Despite a forward-looking mindset, companies in the Middle East are taking an incremental rather than a disruptive approach to innovation. A new Accenture report shows the maturity of innovation efforts in the region.

The global consulting firm surveyed C-suite executives at 200 large companies in the United Arab Emirates and Saudi Arabia – for its annual summary of how business in the Middle East is handling the rate of change. This year’s study was all the more poignant given the unprecedented scale of disruption over the past twelve months.

“To digital disruption, we need to add climate change, conflict, trade volatility and now, unexpectedly, contagion,” said Xavier Anglada – Accenture’s strategy, advisory and innovation leader in the Middle East. “The effects of the Covid-19 pandemic underscore the importance of companies being both agile and resilient in order to be able to respond effectively to quick and unexpected changes.”

“Companies with a strategy to innovate across the business types in their portfolio – that is, across core, new, and emerging businesses – will be more successful in dealing with the storm.” Based on the survey, companies in the Middle East still have a lot to do before they can thrive in the new normal.

The researchers split innovation into two parts: innovative design refers to the structure, strategy and culture of a company – and how it is geared to rapid change; and “Innovation Practices” reflect how data, technology and talent are used to stay ahead of the curve. “Innovation maturity” is when both parts work together.

Despite widespread disruption, the number of mature organizations in the Middle East has increased 1% over the past year. Design continued to stagnate while practices saw a modest 2% increase – mainly due to increased technology investments in the face of the pandemic.

“Companies need to innovate and make greater strides in their business transformation,” Anglada said. Exemplary are a handful of innovation leaders – 14% of organizations in the Middle East that demonstrate the relationship between maturity and success.

Innovation leader

Rather than making incremental technological improvements, these companies are using digital as a means of bringing new product and service offerings – or, in some cases, to reinvent their entire business model as the market changes. Accenture identified twelve “habits” that these companies embody to stay ahead of the curve – divided into inspiration, brainstorming, experimentation and scaling.

Topics include putting innovation at the heart of the strategy, communicating that need through the workforce, and building a disruptive culture. Be open to ideas from employees and discussions with experts and technology partners for new ideas. Set a space and an incremental budget to experiment with and use the business ecosystem to scale new products and services.

“Between 2014 and 2019, this group of companies saw both higher employee productivity and higher profitability than companies that adopted fewer than six of these habits,” said Anglada.

“And they have very positive business prospects. By 2025, these companies expect to more than double their profitability compared to the rest, and we believe that by continuing strong innovation governance, they will achieve even higher employee productivity. “

With the rest of the pandemic and an evolving consumer market to prepare for, it is imperative for the broader business environment to follow suit. “As the disruption increases, the gap between executives and those who can’t keep up grows,” concluded Anglada.