The document discusses how innovation is critical for businesses to maintain their market position and advance. It summarizes research finding that while technology was the top strategy for addressing innovation, human capital issues are also heavily important. The document then provides definitions and frameworks for understanding innovation, including the three pillars of innovation, innovation excellence models, innovation management practices, and metrics for measuring innovation performance and return on innovation investment.

1. Zürich, July 2013
Innovative Talent Drives
Business Growth

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STRIM Group of Companies
Range of Services
The following products and services come across the divisions within the STRIM Management
Sphere System into effect:
Analyses & Workshops
Administration & Reporting Assessments & Coachings
Strategy & Execution Webinars & Congresses
Surveys & Publications

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Introduction
While technology was the top strategy to address innovation, recent studies found that innovation is
heavily dependent upon human capital issues.
Whether that is product and technology innovation or process innovation or business model
innovation, you have to be engaged in it in order to continue to maintain your market position, let alone
advance it.
Measurement drives success, and successful innovation is critical.

4. 4
Introduction
CEO Challenge 2013
The top five strategies to meet the top five global challenges
Source: The Conference Board: CEO Challenge 2013 Summary Report.

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Introduction
CEO Challenge 2013
Regional results reflect a global convergence on challenges
Source: The Conference Board: CEO Challenge 2013 Summary Report.

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Introduction
CEO Challenge 2013
Challenges by industry
Source: The Conference Board: CEO Challenge 2013 Summary Report.

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Definitions
Innovation
Creating value through new products, new processes, business models, and organizational structures to meet and
anticipate customer demands and remain competitive in a global marketplace.
The Conference Board
Innovation is a process through which the nation creates and transforms new knowledge and technologies into useful
products, services and processes for national and global markets – leading to both value creation for stakeholders and
higher standards of living.
Egils Milbergs, President, Center for Accelerating Innovation
Return On Innovation Management:
Measurement that evaluates the profitability of a company´s investment in new products. The return on innovation
investment compares profits generated by a new product with the expense of developing the product and bringing it to
market.
InvestorWords.com – Online Investing Glossary
A performance measure used to evaluate the effectiveness of a company´s investment in new products or services.
The return on innovation investment is calculated by comparing the profits of new product or service sales to the
research, development and other direct expenditures generated in creating these new products or services.
Investopedia

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Definitions
Invention is creating something new that may or may not have a measurable business value. It is
typically the outcome of research and experimentation.
Unlike innovation, invention can reflect the work of a single individual.
Ellie Hall, Audrey B. Smith, Ph.D.
Creativity is best viewed as an individual personality attribute. An individual may be creative in that he
or she is able to generate many unique ideas (or build on others’ ideas in value-added ways).
Creativity fuels invention. But an individual who is creative may lack the skills, discipline, and ability
needed to bring an idea to fruition and grow it into a meaningful innovation.
Ellie Hall, Audrey B. Smith, Ph.D.

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Challenges to overcome
Source: Arthur D. Little: Getting a Better Return on Your Innovation Investment . Results of the 8th Arthur D. Little Global Innovation
Excellence Study, 2013.

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The „three pillars of innovation“
Pillar One: Understand the Innovation Effectiveness Curve
Source: Alexander Kandybin and Martin Kihn: Raising Your Return on Innovation Investment. strategy+business issue 35, 2004.

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The „three pillars of innovation“
Pillar Two: Master the Entire Innovation Value Chain
Source: Alexander Kandybin and Martin Kihn: Raising Your Return on Innovation Investment. strategy+business issue 35, 2004.

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The „three pillars of innovation“
Pillar Three: Don´t Do It All Yourself
Source: Alexander Kandybin and Martin Kihn: Raising Your Return on Innovation Investment. strategy+business issue 35, 2004.
Dimensions of Best-in-class Innovation Time-to-Market, Actual vs. Planned

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The Innovation Excellence Model
Structure
Source: Arthur D. Little: Getting a Better Return on Your Innovation Investment . Results of the 8th Arthur D. Little Global Innovation
Excellence Study, 2013.

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„8 Step Process“
… To Perfect New Product Development
Source: Robert F. Brands: 8 Step Process Perfects New Product Development , Blogpost, May 27, 2013
For more information: http://kalyan-city.blogspot.com/2012/02/stages-process-steps-of-new-product.html

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Research Results
Percentage point difference between top innovators and others
Source: Arthur D. Little: Getting a Better Return on Your Innovation Investment . Results of the 8th Arthur D. Little Global Innovation
Excellence Study, 2013.
Energy & Utilities
Chemicals
Industrial & Manufacturing
Food & Beverage
Telecom, IT & Media
Electronic Engineering
& Electronics
Automotive Manufacturing
& Automotive Suppliers

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Research Results
Top innovators sustain significantly higher performance
The top quartile innovators enjoy
more than twice the proportion of
new sales for new products/
services (based on sales in last
three years),
nearly twice the EBIT and
a 30% shorter time-to-break-even
than the rest.
This is a good illustration of
financial (or economic) benefits of
excellent innovation performance.
Source: Arthur D. Little: Getting a Better Return on Your Innovation Investment . Results of the 8th Arthur D. Little Global Innovation
Excellence Study, 2013.

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Research Results
Relative positioning of innovation portfolio
Across all industries top innovators with leading innovation success tend to focus more on radical
innovation than other innovators.
The trend varies depending on whether innovation is being applied to products, services, processes
or business models.
Source: Arthur D. Little: Getting a Better Return on Your Innovation Investment . Results of the 8th Arthur D. Little Global Innovation
Excellence Study, 2013.

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Research Results
Innovation Management Practices, Tools and Methodologies
It is especially noteworthy that some of the newer tools that are often cited in innovation literature,
such as social media tools, crowdsourcing for idea generation, idea jams and bootcamps, apply only in
a minority of cases and are only weakly associated with innovation success when used on their own.
Source: Arthur D. Little: Getting a Better Return on Your Innovation Investment . Results of the 8th Arthur D. Little Global Innovation
Excellence Study, 2013.

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Innovation Metrics
Cash curve: typical path to cash payback
Source: James P. Andrew, BCG Chicago: Innovation Management.se. The leading online resource and learning center for management
Innovation, 2010.

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Innovation Metrics
Innovation framework: Metrics for beginners in innovation
Source: Amy Muller, Liisa Välikangas, and Paul Merlyn: Metrics for innovation: guidelines for developing a customized suite of
innovation metrics,

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Innovation Metrics
Innovation framework: Metrics for veterans of innovation
Source: Amy Muller, Liisa Välikangas, and Paul Merlyn: Metrics for innovation: guidelines for developing a customized suite of
innovation metrics,

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Your Contact
Dr. Volker Mayer
CEO at STRIMgroup AG
STRIMgroup AG
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CH-8122 Binz (bei Zürich)
Fon +41 (0)43 366 05 58
www.strimgroup.com
office@strimgroup.com
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