In 2019, disruption remained a significant, and growing, challenge for companies and industries across the Middle East. Though executives in the region are aware of the threat posed by disruption, they are poorly prepared to face it. When Middle Eastern companies do respond to disruption, they tend to do so with excessive caution: a timid response—or no response at all—to disruption could cost the region’s firms up to $578 billion in lost enterprise value. To manage disruption successfully, most Middle Eastern companies need to innovate more.
There are, however, some happy exceptions. These “Innovation Champions” have adopted organizational structures and practices that are allowing them to “supercharge” their innovation. And, despite their differences, such firms share an uncanny ability to use data as a strategic asset, thereby powering their wise pivots to the future.
These leaders are also working toward the perfect synchronization between technology and humanity with greater intensity, and are acknowledging how they complement one another to thrive in the technology economy.
Innovation champions do things differently
Middle Eastern companies that excel at innovation set themselves apart in at least three ways:
- They pursue wise pivots. In our research, 71 percent of Innovation Champions use innovation to unlock value in new businesses while revitalizing their core business (compared with a 41 percent rate for less innovative firms). Indeed, champions invest 1.8 times more than their peers to transform their core business; they invest 1.6 times more to grow their core business; and they invest 3.0 times more to scale new businesses (Figure 4).
- They prioritize formal innovation structures. In the areas of culture and architecture, Innovation Champions
enjoy large advantages (18 and 31 points, respectively) over less innovative firms (Figure 5).
- They adopt first-rate innovation practices. In the seven practice categories, Innovation Champions enjoy, on average, a 20-point lead over their peers (Figure 6). Champions particularly excel at being data-driven, earning a score of 89 points, on average. In the last five years, champions have significantly improved their data-driven prowess, and they have even more ambitious plans for the next five years.
In 2019, disruption remained a significant, and growing, challenge for companies and industries across the Middle East. Though executives in the region are aware of the threat posed by disruption, they are poorly prepared to face it.