A Response to PwC’s 29th CEO Survey
PwC’s latest CEO Survey reveals a paradox I’ve witnessed in boardrooms around the world for two decades: whilst 53% of UK CEOs declare innovation critical to their business strategy, they’re systematically destroying the very conditions that make it possible.
The survey’s most telling observation deserves closer examination:
“Many organisations may not be realising their full innovation potential, by not taking advantage of opportunities such as external collaborations, or rapidly testing new ideas with customers. Others are getting in their own way, with 33% of CEOs agreeing that bureaucratic processes are inhibiting their company’s operational performance.”
This isn’t a knowledge gap. It’s a courage gap.
After working with Fortune 500 companies and governments worldwide on innovation strategy, leadership, and culture, I can predict with precision which organisations in this survey will succeed at innovation—and which are engaged in what’s become commonly known as “innovation theatre.”
The uncomfortable truth? The organisations struggling aren’t lacking frameworks, resources, or commitment. They’re caught in a self-inflicted trap between what they claim to want and what their leadership behaviours and organisational systems actually enable.
The 29% Problem: From Disruption to Opportunity
For me, the survey reveals something far more concerning than the bureaucracy statistic. While 39% of CEOs say their leadership teams can respond to disruption, and 34% believe they can anticipate it, and only 29% think they could convert disruption into new business opportunities.
This gap exposes the fundamental difference between genuine innovation capability and innovation theatre.
Responding to disruption? That’s crisis management—the organisational equivalent of firefighting. Anticipating disruption? That’s strategic planning with better foresight. But converting disruption into new business opportunities? That requires systematic innovation capability—the ability to identify, develop, and deliver solutions that create meaningful value at scale.
The 10-point drop from anticipation to opportunity capture reveals precisely where organisations are failing. They can see what’s coming. They know disruption will arrive. But they cannot systematically translate that awareness into competitive advantage because they’ve never built the capability to do so.
Research I’ve conducted with global organisations consistently shows this pattern: whilst 84% of executives consider innovation essential to growth strategy, only 6% express satisfaction with results. This isn’t coincidence—it’s causation. Organisations that treat innovation as something to implement rather than a capability to build will always struggle to capture opportunities when they arise.
The Bureaucracy Barrier: When Systems Contradict Strategy
One-third of CEOs acknowledging that bureaucratic processes inhibit operational performance should set off alarm bells. But here’s what that statistic doesn’t reveal: these same leaders likely created or perpetuated those bureaucratic processes whilst simultaneously declaring innovation a strategic priority.
This is the innovation culture double bind: executives demand breakthrough thinking whilst maintaining governance systems that guarantee it cannot emerge. They champion psychological safety whilst implementing performance metrics that punish unsuccessful experiments. They talk about empowerment whilst concentrating all decision authority at the top.
The neuroscience is clear—our brains feel potential losses approximately twice as intensely as equivalent gains. When organisations layer bureaucracy onto innovation efforts, requiring detailed ROI calculations for experiments, implementing stage-gate processes designed for predictable outcomes, demanding executive approval for every deviation from plan, they’re asking people to override millions of years of evolutionary programming without providing the psychological safety to do so.
From my work advising global organisations, I’ve found that bureaucracy in innovation contexts typically serves two unspoken purposes: it provides political cover for executives who don’t genuinely want innovation to succeed, and it creates the illusion of control in situations that are inherently uncertain. Neither purpose advances competitive advantage.
The External Collaboration Gap: Why Organisations Stay Insular
The survey notes that many organisations aren’t “taking advantage of opportunities such as external collaborations.” This pattern reveals something deeper about organisational culture and leadership mindset.
External collaboration—with customers, suppliers, research institutions, or even competitors, requires capabilities most organisations haven’t developed: the humility to acknowledge what you don’t know, the transparency to share genuine challenges rather than polished narratives, the agility to rapidly integrate external insights, and the courage to give credit to external partners rather than claiming innovation success internally.
More fundamentally, external collaboration exposes whether your organisation genuinely prioritises solving meaningful problems or merely wants to be seen as innovative. External partners quickly recognise when collaboration is performative rather than productive.
In my experience, organisations that excel at external collaboration have already built strong internal innovation-led cultures. They’ve developed the psychological safety, cross-functional collaboration, and rapid decision-making that makes external partnerships productive rather than administratively burdensome. They’ve recognised that innovation increasingly happens at the intersections between functions, between organisations, between industries—and they’ve designed systems to capitalise on these connections rather than resist them.
Organisations struggling with external collaboration typically have deeper issues: leadership teams that fear losing control, governance processes that cannot accommodate partnership complexity, and cultures where “not invented here” remains a powerful barrier to adoption.
The Customer Testing Reality: Why Rapid Experimentation Remains Rare
The observation that organisations aren’t “rapidly testing new ideas with customers” exposes perhaps the most fundamental gap in innovation capability.
Customer testing isn’t primarily a methodology challenge—design thinking, lean startup, and agile approaches all provide frameworks for rapid experimentation. The barrier is cultural and structural.
Rapid customer testing requires:
Short decision cycles where teams can move from idea to customer interaction in days, not months. Most organisations’ governance processes make this impossible—every customer touchpoint requires legal review, brand approval, compliance checks, and executive sign-off, stretching timelines beyond the point where “rapid” has any meaning.
Comfort with imperfection where teams can share early-stage thinking with customers before solutions are polished. This contradicts decades of corporate training that emphasises presenting only finished, approved work to external stakeholders.
Distributed authority where teams closest to customer problems can make decisions without escalating through hierarchy. Yet the survey shows many organisations struggling with precisely this capability—bureaucratic processes ensure decisions remain centralised even as rhetoric champions empowerment.
Learning orientation where the goal is insight generation rather than solution validation. Most organisations’ performance systems reward being right, not learning quickly, creating incentives to delay customer testing until solutions are “ready”—by which point, they’ve lost the agility rapid testing provides.
The organisations I advise that excel at rapid customer testing haven’t just adopted methodologies, they’ve fundamentally redesigned how work gets done. They’ve addressed the psychological barriers (fear of looking incompetent), the structural barriers (governance that enables rather than restricts), and the cultural barriers (recognition systems that celebrate learning, not just success).
What CEOs Should Actually Do: Moving Beyond Rhetoric
Based on my work with organisations around the world, here’s what CEOs serious about realising their “full innovation potential” must do. Spoiler alert! It’s substantially more demanding than most are prepared to undertake.
1. Audit Your Innovation-Reality Gap
Before launching another initiative, conduct a brutal assessment of where your organisation actually stands versus where you claim to be:
The bureaucracy audit: Map every approval required for a team to test a new idea with customers. If it takes longer than two weeks from concept to customer interaction, your bureaucracy is destroying agility regardless of what your innovation strategy claims.
The collaboration reality check: When was the last time your organisation genuinely collaborated with an external partner on innovation—not outsourced work, not vendor relationships, but genuine co-creation where credit and value were shared? If you can’t identify examples from the past year, external collaboration isn’t happening.
The decision authority assessment: Can middle managers make meaningful decisions about resource allocation and strategic direction, or must everything escalate to executives? If authority remains centralised despite empowerment rhetoric, innovation capability cannot scale.
The consequence examination: What actually happens when experiments fail? Are people recognised for learning, or do unsuccessful initiatives damage careers? The answer to this question reveals whether your culture genuinely supports innovation or merely performs it.
This audit should be conducted by independent parties who will report findings honestly rather than politically. Most organisations discover their self-assessment is wildly optimistic—a gap that explains why innovation initiatives consistently underperform.
2. Address the Middle Management Bridge
The survey doesn’t explicitly discuss middle management, (for that you’d need to run an innovation maturity assessment), but this layer determines whether innovation rhetoric translates into innovation reality.
From my extensive work globally, I’ve found that middle managers operate at the critical intersection of strategic vision and operational execution. They make thousands of daily decisions about resource allocation, risk tolerance, cross-functional collaboration, and employee recognition that collectively shape whether innovation can flourish.
Yet most organisations either bypass middle managers during innovation initiatives or expect them to drive transformation without providing the capabilities, psychological safety, or authority required.
Organisations serious about innovation must:
Equip middle managers with innovation enablement capabilities beyond traditional operational management—specifically, how to create psychological safety for experimentation, facilitate cross-functional problem-solving, and navigate the ambiguity inherent in the pursuit of innovation.
Provide them with genuine authority to make decisions within defined parameters rather than requiring escalation for every deviation from established processes.
Protect them from above so they can create psychological safety below—if middle managers fear career consequences for team failures, they cannot enable the risk-taking innovation requires.
Recognise both activity and outcomes by measuring them not just on delivering results but on building capability, enabling collaboration, and creating conditions where innovation can emerge.
The organisations that have successfully embedded innovation capability have systematically enabled their middle management layer. Those who continue struggling have left this critical bridge unaddressed whilst wondering why executive vision never translates into operational reality.
3. Redesign Systems That Contradict Innovation
If bureaucratic processes are inhibiting operational performance, they’re certainly destroying innovation capability. But addressing this requires more than eliminating approval layers—it demands fundamental systems redesign.
Performance metrics: Move from measuring only outcomes to measuring both activity and learning. Recognise teams for rapid experimentation, cross-functional collaboration, and insight generation, not just successful project delivery.
Resource allocation: Create dedicated capacity for innovation work rather than expecting it to happen “in addition to” operational responsibilities. Research shows organisations maintaining 10-15% slack capacity specifically for adaptation and innovation dramatically outperform those running at maximum utilisation.
Governance frameworks: Implement processes designed for innovation’s uncertainty rather than applying governance designed for predictable operations. This means shorter cycles, lower investment thresholds before customer testing, and decision criteria that value learning velocity over ROI certainty.
Recognition systems: Celebrate learning from failure with the same visibility you celebrate successful outcomes. One pharmaceutical executive I advised transformed their innovation pipeline by dedicating the first five minutes of every leadership meeting to recognising learning from failure—creating psychological safety through consistent behaviour rather than rhetoric.
This systems redesign cannot be delegated to HR or innovation teams. It requires direct CEO and executive ownership because it involves making explicit trade-offs between competing priorities that only top leadership can authorise.
4. Build the External Collaboration Muscle
External collaboration doesn’t start with partnership announcements, it starts with internal capability building.
Organisations must develop:
Intellectual humility at leadership level—the willingness to acknowledge what you don’t know and seek external expertise without viewing it as admission of internal inadequacy.
Transparent problem-sharing rather than polished narratives—partners can only help solve problems they genuinely understand, which requires honesty about challenges rather than corporate messaging.
Rapid integration capabilities that can absorb external insights and translate them into action quickly rather than subjecting them to the same bureaucratic processes that inhibit internal innovation.
Fair value-sharing frameworks that recognise external partners’ contributions rather than attempting to capture all value internally.
The organisations I’ve worked with that excel at external collaboration have made a fundamental mindset shift, from viewing partners as resources to extract value from to recognising them as multipliers that accelerate capability development.
This shift typically requires addressing deep cultural assumptions about competitive advantage (“we must own all IP”), control (“partnerships create dependency”), and recognition (“innovation credit should stay internal”). Until these assumptions are confronted, external collaboration remains superficial.
5. Create Systematic Customer Testing Capability
Rapid customer testing isn’t just a methodology to adopt—it’s a capability to build systematically across the organisation.
This requires:
Compressing decision cycles through pre-approved frameworks that allow teams to engage customers within days rather than months. This might include standing approvals for customer interviews, simplified procurement for prototype development, or streamlined legal review processes specifically designed for early-stage testing.
Building customer panels ready for engagement rather than sourcing customers individually for each test. Organisations that maintain ongoing relationships with customers willing to provide feedback on early-stage ideas can move from concept to insight in days rather than weeks.
Developing facilitation capabilities across teams so customer testing doesn’t depend on specialist resources. When cross-functional teams possess basic skills in customer interviewing, prototype testing, and insight synthesis, rapid experimentation becomes scalable rather than bottlenecked.
Creating insight-sharing mechanisms that distribute learning across the organisation rather than confining it to individual teams. The most valuable innovations often emerge when insights from one customer testing exercise inform entirely different challenges.
The key is recognising that rapid customer testing capability compounds over time. Each testing cycle builds organisational muscle, with teams becoming more comfortable with imperfection, customers becoming more engaged partners, and leadership developing trust in the process. But this compounding only occurs if testing happens regularly rather than episodically.
The Acquisition vs. Innovation Paradox
The survey reveals that 47% of CEOs expect to make at least one major acquisition in the next three years—yet many struggle to realise their full innovation potential internally.
This presents a critical strategic question: are you acquiring to access innovation capability you cannot build, or are you avoiding the difficult work of developing internal capability by buying it instead?
From my work advising organisations globally, I’ve observed that acquisitions without underlying innovation capability rarely deliver expected value. The acquiring organisation either:
Destroys the innovation culture they purchased by imposing bureaucratic processes, governance frameworks, and performance metrics designed for established operations rather than entrepreneurial agility.
Fails to integrate acquired capabilities because their systems, leadership behaviours, and cultural norms actively resist the very approaches that made the acquired company innovative.
Creates resentment by paying premium prices for external innovation whilst internal teams watch their ideas languish due to bureaucracy and risk aversion.
The organisations that successfully leverage acquisitions for innovation have first built internal innovation capability. They’ve developed the cultural conditions, leadership behaviours, and system designs that allow them to absorb, and scale acquired capabilities rather than accidentally destroying them.
M&A can be a powerful accelerator of innovation—but only for organisations that have already created the foundation where acquired innovation capability can thrive.
The Leadership Behaviour Imperative
Ultimately, the gap between innovation rhetoric and innovation reality comes down to leadership behaviour—specifically, what leaders are willing to sacrifice to create the conditions innovation requires.
The survey’s findings suggest that many CEOs understand innovation’s importance intellectually but haven’t internalised the behavioural changes required to enable it. They demand breakthrough thinking whilst maintaining risk-averse governance. They champion external collaboration whilst protecting internal territories. They advocate customer centricity whilst constraining customer testing with bureaucracy.
Building genuine innovation capability requires leaders to:
Model vulnerability by acknowledging uncertainties, sharing their own innovation attempts including failures, and demonstrating that not having all answers is acceptable rather than a leadership weakness.
Demonstrate strategic patience by protecting innovation capacity even when short-term pressures demand every resource be allocated to immediate operational challenges.
Make visible trade-offs between innovation and other priorities, showing organisation-wide that innovation isn’t rhetoric, but a strategic commitment backed by resource decisions.
Accept imperfect solutions that can be tested rapidly with customers rather than demanding polished presentations before authorising any external interaction.
These behaviours feel uncomfortable for leaders selected and promoted based on different criteria—certainty rather than curiosity, command rather than enabling, perfection rather than learning. But without these behavioural shifts, innovation capability cannot develop regardless of how many initiatives are launched or acquisitions completed.
The Path Forward: Capability Over Activity
The PwC survey reveals a business landscape where innovation is universally recognised as critical yet inconsistently realised. The gap isn’t about knowing innovation matters—it’s about building the systematic capability to deliver it.
For CEOs genuinely committed to realising their “full innovation potential,” the path forward requires:
Honest confrontation of the gap between innovation rhetoric and organisational reality—specifically, identifying where systems, behaviours, and cultural norms contradict innovation aspirations.
Systematic capability building rather than programme launching—recognising that innovation isn’t something you implement but a capability you develop through consistent practice, system alignment, and leadership demonstration.
Courage to eliminate bureaucracy that inhibits innovation even when it serves political purposes or provides comfortable illusions of control.
Investment in foundation building—particularly psychological safety, distributed decision authority, and rapid learning cycles—before expecting innovation results.
The organisations that make these commitments will discover that innovation isn’t as mysterious or difficult as commonly believed. When systems enable rather than constrain, when leadership models rather than merely mandates, and when culture rewards learning rather than punishes failure, innovation emerges naturally.
The organisations that continue treating innovation as something to announce rather than capability to build will join the majority who remain dissatisfied with their results despite claiming innovation is a strategic priority.
The survey data reveals which approach your organisation is taking. The question is whether you’re prepared to confront that reality and undertake the necessary work for genuine transformation—or whether you’ll continue investing in innovation theatre whilst watching competitors who built capability capture the opportunities disruption creates.
Your employees, customers, and long-term viability depend on getting this choice right.
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Cris Beswick is a strategic advisor and recognised global thought leader on innovation strategy, leadership, and culture. He works with CEOs and leadership teams worldwide to build systematic innovation capability that translates strategic intent into competitive advantage through behaviour change, system redesign, and cultural transformation.