Marketers Take the Lead on Innovation

November 13, 2019
Contributor: Laura Starita 

Innovation is no longer simply an item on the marketing to-do list. It is now a key focus for the role. Marketing-led innovation drives revenue for organizations who invest.

Of all the functions in a marketer’s wheelhouse, innovation may be the most exciting. It challenges us to forge ahead into new territory, sparking creativity and imagination. It also comes with a healthy dose of risk, the possibility of failure, investment wasted, opportunities missed. 

The Gartner Innovation Survey 2019 shows that 91% of marketing organizations are up to the challenge and involved in setting innovation strategy for the business. Twenty-nine percent drive organizationwide innovation from within the marketing domain. Marketing leaders’ commitment to innovation is natural, given their skills in creative thinking and customer focus. And it is necessary given ramped-up pressure on marketing to drive revenue growth.

“54% of marketers staff their in-house teams with talent whose sole job is to innovate. .”

To meet this innovation challenge, marketers must continue to advocate for increases to the innovation budget, grow the in-house talent pool, and engage partners to effectively build out new initiatives.

Innovation captures a growing share of marketing spend, with strong results

The 2018 Annual Gartner CMO Spend Research Survey data showed a marked increase in innovation’s share of the budget to 16%, off a 10% share in 2017. That 60% jump is remarkable at a time when marketing budgets overall were steady or declining. There are no signs of waning commitment, as two-thirds say they intend to increase innovation spending in the coming year.

Money appears to bring results when it comes to marketing-led innovation. Of CMOs who committed 25% or more of the marketing budget to innovation, 79% say their business outperforms peers in their industry in revenue and profit. For those committing between 10% and 25%, a smaller 59% overperform. These numbers offer important validation of the business value of both innovation and of the marketing organization.

Dedicated innovation talent makes up the core of inhouse teams

Fifty-four percent of marketers staff their in-house teams with talent whose sole job is to innovate. By giving people one set of responsibilities, marketers hope to increase the quantity and quality of innovation output.

 

“Unless benchmarks are included in their performance evaluations and leaders carve out time for employees to dedicate to various phases of innovation, the output will be minimal,” says Elizabeth Shaw, Senior Director Analyst, Gartner Research & Advisory. “In that scenario, employees don’t have any ‘skin in the game.’ Only dedicated employees will produce the quality and quantity of results you want.” 

The shift to dedicated innovation staff leads to greater innovation success. This may be due to the virtuous cycle in which innovation talent and funding operate. Sixty-three percent of CMOs with innovation talent on their teams are willing to fund high-risk innovation — twice the rate of those who don’t have innovators.

Yet finding innovation talent is like finding a snow leopard; they exist, but they’re elusive. So elusive that 41% of marketers say that a lack of talent is among their top 3 innovation challenges, along with risk aversion in the organization (46%) and an inability to measure innovation impact (41%).

Partnering for innovation success

Successful innovators complement in-house resources with the differentiated skills of external partners. Fifty-eight percent of marketers name martech vendors as highly valued innovation partners. Many marketers also rely on consumer technology firms (47%), business consulting firms (45%) and marketing agencies (39%) to complement their internal talent mix.

One common approach used between tech vendors and enterprises is the “launch partner” model, in which a company serves as a first adopter of a new technology.

The stakes will only get higher as more companies ramp up their innovation efforts through active investments and focused talent. Despite the inherent risks and talent shortages, innovation deserves the spotlight as a maturing marketing discipline. 

Learn more about innovation in the complimentary research Innovation Survey 2019: Marketers Lead Innovation but Face Risks and Talent Challenges” by Christopher Ross and Elizabeth Shaw.

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