How can companies boost innovation? Not the way you think. It turns out R&D dollars alone can kill innovation results. But the right mix can vault companies into the top tier of performers.

1. How can companies boost
innovation?
Not the way you’d think.
James Janega, jamesjanega@gmail.com
https://jamesjanega.wordpress.com/

2. Can you
learn
innovation?
In a 10 year longitudinal survey of 1000 global companies
that spent the most on R&D, Strategy& found the vast
majority felt they’d learned some important things about
innovation:
• 27%: “We MASTERED THIS.”
• 32% got “MUCH” better after 10 years
• 44% got “better” after 10 years
• 73% found “room to improve,” would…
• Shift R&D mix from “incremental” to “breakthrough”
• Shift product R&D to service R&D
• 6% “got worse”
Signs point to “yes”
James Janega, jamesjanega@gmail.com
https://jamesjanega.wordpress.com/

3. Can you learn innovation?
Signs point to “yes”
• 27%: “We MASTERED THIS.”
• 32% got “MUCH” better after 10 years
• 44% got “better” after 10 years
• 73% found “room to improve,”
would…
• Shift R&D mix from “incremental” to
“breakthrough”
• Shift product R&D to service R&D
• 6% “got worse”
If so …
… how much better can you get?
Better Much Better Mastery Got Worse
James Janega, jamesjanega@gmail.com
https://jamesjanega.wordpress.com/

4. What’s the
magic formula
for innovation?
In a 10 year longitudinal survey of 1000 global companies
that spent the most on R&D, Strategy& found the vast
majority felt they’d learned some important things about
innovation:
• Core strategies improve returns
• Align business and innovation strategies
• Key success factors drive results
• Gain insights into customer needs
• Stated
• Unstated
It’s not magic. But it isn’t chance,
either.
James Janega, jamesjanega@gmail.com
https://jamesjanega.wordpress.com/

5. What’s the
magic formula
for innovation?
Build services out of products. Go
big.
James Janega, jamesjanega@gmail.com
https://jamesjanega.wordpress.com/

6. What DOESN’T
work?
Strategy& ran 10,000 Monte Carlo simulations on the 1000
R&D companies surveyed over 10 years, and found:
• R&D spend is not correlated to sustained financial
success
• R&D spend is not correlated to sales growth
• R&D spend is not correlated to gross profit
• R&D spend is not correlated to enterprise profit
• R&D spend is not correlated to market cap value
• R&D spend is not correlated to shareholder return
Money is not enough.
James Janega, jamesjanega@gmail.com
https://jamesjanega.wordpress.com/

7. What DOESN’T
work?
R&D spend as the sole thrust for
innovation DOESN’T work. In fact,
the MORE companies spent that
way, the WORSE they fared.
James Janega, jamesjanega@gmail.com
https://jamesjanega.wordpress.com/

8. How did top
performers
raise their
game?
The solution involved five key steps taken simultaneously:
• Align the portfolio of innovation investments with
customer needs and wants
• Develop and retain people with the right technical
knowledge
• Understand new product- and service-related
technology and trends
• Align innovative leaders with business leaders
• Pursue lean product/service development
By focusing on new capabilities
and processes.
James Janega, jamesjanega@gmail.com
https://jamesjanega.wordpress.com/

9. Next: What does that
mean for managers?
Come join the conversation at jamesjanega.wordpress.com
James Janega, jamesjanega@gmail.com
https://jamesjanega.wordpress.com/