Welcome to a day of blogging with James Andrew, co-author of Payback: Reaping the Rewards of Innovation! Glad to Be Here… and Thanks to Jack and Todd First off, I want to thank Jack and Todd for inviting me to the blog-fest here at 800-CEO-Read. I spend my days taking a hard look at innovation – my Boston Consulting Group colleague Hal Sirkin and I wrote Payback: Reaping the Rewards of Innovation to blow up innovation myths and help leaders innovate in ways that really drive their business.
Welcome to a day of blogging with James Andrew, co-author of Payback: Reaping the Rewards of Innovation!
Glad to Be Here… and Thanks to Jack and Todd
First off, I want to thank Jack and Todd for inviting me to the blog-fest here at 800-CEO-Read. I spend my days taking a hard look at innovation – my Boston Consulting Group colleague Hal Sirkin and I wrote Payback: Reaping the Rewards of Innovation to blow up innovation myths and help leaders innovate in ways that really drive their business. It’s great to meet up with all of you and spend my day sharing ideas here in the blogosphere. I hope we can take a look together at what innovation is, what it isn’t, and how we can all do a better job of it.
Innovation and Why It Fails: Results from the 2007 BusinessWeek/BCG Innovation Survey
What’s wrong with innovation? Plenty. Most leaders say that innovation is critically important. But more and more, they’re unhappy with the returns on their innovation efforts.
For insight into why, look no further than the Boston Consulting Group/BusinessWeek Innovation Survey. The 2007 edition was released on May 4th. We do the survey every year to benchmark innovation and see what’s working and what isn’t. The survey helped us frame some of the arguments in Payback, and the new results tell us that there’s still a long way to go.
The 2007 numbers are worse than we’ve seen in the past. This year, fewer than half of the execs say they’re happy with the way their innovation programs are paying off. Operating executives are far less happy than CEOs – that has to be a sign of trouble.
What’s most worrisome is that there are signs of an innovation pullback. Fewer executives than last year said that innovation was a top-three priority. And fewer said they were planning to increase innovation spending. So innovation frustration is leading to real consequences.
That’s a bad outcome. Pulling back on innovation is exactly the wrong approach. At the end of the day, innovation is by far the best way to build asset value and give shareholders a return. That’s because innovation is really nothing other than the management of new knowledge to create organic growth. And it goes without saying that sustainable organic growth is a major prize.
So what’s wrong? We believe that businesses fail at innovation because they treat it like some magical art. They don’t manage it as what it is – a business process that needs business discipline.
The survey shows why innovation programs fail. Executives say their companies:
- Aren’t able to move innovations through the pipeline quickly enough.
- Waste too much time at the development stage.
- Fail to enforce “hurdles” to test and disqualify innovation projects at key stages.
- Fail to apply key metrics, like “innovation ROI,” and fail to measure their innovation portfolios based on hard measures like the number of innovation projects that meet planned targets.
In other words, business leaders don’t apply to innovation the normal management discipline that they bring to bear on every other business process.
The good news is that the solution to the innovation problem is right at hand. To succeed at innovation, all that managers need to do is... manage. Everything they need to do to improve innovation is already under their control. Improving the innovation process means applying the standard management toolset and approaching innovation with the same rigor and the same attention to metrics you’d use in any business situation.
We wrote Payback to make that point – and to describe the approaches and metrics that will turn innovation frustration into innovation success.
Watch for more throughout the day...