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

1. How can companies boost
innovation?
Part 2: Some suggestions
James Janega, jamesjanega@gmail.com
https://jamesjanega.wordpress.com/

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. 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. 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. 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. 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. 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. 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/