machinery and equipment

86% of business leaders don’t consider their own production line as the starting point to innovation

July 5, 2017, 11:16 am

Happen, a leading innovation consultancy, has revealed that majority of C-suite leaders (86%) believe production capabilities are often not considered when it comes to new product development and innovation for them.

Supporting the thought that perfectly good machines lie idle because businesses don’t have the capability to produce the company’s latest innovation, 81% of business leaders stated they would spend more money on new production facilities going forward including machinery, technology and manufacturing.

In their latest whitepaper The Innovation Factory, Happen explore how businesses can get to market faster, with lower capex and better odds of success. The paper identifies that one of the biggest causes of innovations failing is that companies don’t consider their own production capabilities: instead, they end up wasting time on ideas that they can’t bring to life or investing huge amounts in new production equipment because whatever they’ve developed can’t be made using their existing equipment.

As documented in the report, factory utilisation rates typically hover around 80%, suggesting that the average company has plenty of room for improvement.

When asked what innovation skills will become more important in the future, only one in five (20%) CEOs admitted to needing to understand production.

To support the whitepaper, in a study of 100 business leaders and C-suite employees, four out of five (82%) CEOs claimed that innovation as a function lives within the marketing and sales teams, rather than production line. In light of this outcome, additional internal research found that 3.4 million of LinkedIn’s 467 million members include the word “innovation” in their profiles. Of those, more than two thirds also include the word “strategy”, “marketing” or “sales”. However, only around one in seven include the words “product”, “production” or “operations”.

Costas Papaikonomou, Founding Partner at Happen commented:

manufacturing innovation graphic
Manufacturing innovation graphic

“We’ve proved that there’s still a big education for businesses to learn when it comes to considering their own production line as part of their innovation process.  Clearly, innovation is viewed as a function that lives with marketing and sales, and not with the nuts-and-bolts production side of the business. Herein lies a problem. Whilst a creative process at heart, Asset-Out ensures less time is lost, less money wasted, and fewer ideas compromised on the journey to create insightful, commercially sensible products that bond you with your consumers.”

In response to a growing issue of inefficient utilisation of production capabilities within innovation, Happen’s whitepaper focuses on a number of different industry pain points businesses face when trying to innovate. The full whitepaper is broken down into the below six sections:

  • The problem with innovation
  • It doesn’t have to be this way
  • The factory floor: Seedbed of innovation
  • The solution: Asset-Out innovation
  • A different way of looking at innovation
  • Time for change

The full Happen’s The Innovation Factory whitepaper can be found here:



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