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Improving company innovation: A 5-step approach

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How can companies improve their innovation track record? Here's a 5-step approach that the top 25% of corporate innovators follow.

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Improving company innovation: A 5-step approach

  1. 1. How can companies boost innovation? Part 2: Some suggestions James Janega, jamesjanega@gmail.com https://jamesjanega.wordpress.com/
  2. 2. Can companies boost innovation? Money doesn’t buy innovation. • In the previous presentation, we learned that annual spend on R&D doesn’t correlate to improved R&D results. • In fact, R&D spend as a sole facet of innovation efforts was negatively correlated to sales growth, gross profit or shareholder return. So what gets you to the top 25%? James Janega, jamesjanega@gmail.com https://jamesjanega.wordpress.com/
  3. 3. How can you improve your company’s innovation? In a Strategy& 10-year longitudinal survey, the most innovative firms raised their innovation game by focusing on core innovation capabilities and processes. The most effective recommendations? Identify your CORE INNOVATION CAPABILITY: It’s a path to: • -- something customers need. And is: • -- something competitors can’t do. Concentrate on a short, coherent list of innovation capabilities. Don’t try to be good at everything. James Janega, jamesjanega@gmail.com https://jamesjanega.wordpress.com/
  4. 4. How can you improve your company’s innovation? In a Strategy& 10-year longitudinal survey of 1000 global companies, the most innovative firms had raised their innovation game by focusing on core innovation capabilities and processes. The most effective recommendations? • Align your innovation portfolio with customer needs and wants • Develop and retain people with the right technical knowledge • Understand the technology and trends related to new products and services • Align innovation leaders with business leaders • Pursue lean product development Focus on two areas: Capabilities and Processes James Janega, jamesjanega@gmail.com https://jamesjanega.wordpress.com/
  5. 5. How can you improve your company’s innovation? In a Strategy& 10-year longitudinal survey, the most innovative firms raised their innovation game by focusing on core innovation capabilities and processes. The most effective recommendations? Capabilities and Processes: 1) What do customers want? 2) What are your competitors’ core competencies in new product development? Go all Blue Ocean on them. 3) Apply these: 1) Align your innovations to customers Focus on changes in market and demand. 2) Track product/service technology and trends 3) Hire subject matter experts you need 4) Get innovation team and business leaders talking “The business side knows what it’s going to get, and the R&D side knows what it has to work on.” – Oliver Nussli, Nestle. 5) Shorten the product development process; implement “agile inspiration” Understand the implications of customer desires, competitor abilities, and company strengths. James Janega, jamesjanega@gmail.com https://jamesjanega.wordpress.com/
  6. 6. Can companies boost innovation? They’re doing it. • 66%: “We’re aligning business and innovation strategies.” • Conversations lead to alliances, lead to formal arrangements, lead to repeatable results. • 75% “We understand our customers in much more detail than we did 10 years ago.” Here’s how … … we aligned business and innovation strategies. Aligned Not aligned … we understand more about our More About the same customers. James Janega, jamesjanega@gmail.com https://jamesjanega.wordpress.com/
  7. 7. Returns from improved customer insights 1.65 Indirect Customer Insights Direct Customer Insights 2 1 1 1 3 3.5 3 2.5 2 1.5 1 0.5 0 Shareholder Returns Return on Assets Operating Income Axis Title James Janega, jamesjanega@gmail.com https://jamesjanega.wordpress.com/
  8. 8. In the next installment: R&D approaches for three types of corporate innovators • Firms that benefit from superior customer insights • Firms that benefit from superior incremental innovation processes • Firms that benefit from internal technical capabilities • Previous installment here: http://jamesjanega.wordpress.com/2014/11/12/how-can-companies- boost-innovation/ James Janega, jamesjanega@gmail.com https://jamesjanega.wordpress.com/

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