Companies know that innovation is one of the keys to growth. Seventy-five percent of the respondents in BCG’s report The Most Innovative Companies 2014: Breaking Through Is Hard to Do (October 2014) ranked innovation as a top-three priority for their company; 22 percent said it was their company’s top priority. More than 60 percent said their company planned to increase investment in innovation in the coming year.
So where are the results?
Companies are the first to admit that there is room for improvement. CEOs question whether they are getting a return commensurate with their investments. Many innovation managers express frustration that their teams are not developing the successful new products and services—or the compelling product or service extensions—that they seek.
Compounding those challenges, the bar is being raised. Customers, used to continuing progress and improvement, expect more. New technologies, especially digital advances, have conditioned customers to expect it more quickly. But long-used innovation models no longer keep up. Processes are too slow, dragged out by too many rigid stages and gates to clear. Decision making has become overly complicated and consensus based, resulting in compromised, incremental solutions with little chance for a big impact.
As customer expectations grow and markets evolve more quickly, companies can’t expect to innovate in the ways they used to. Innovation models themselves need to be systematically innovated, rethought, and updated.
On the basis of our experience working with hundreds of companies to reinvigorate their innovation strategies and processes, we suggest that executives seeking to sharpen their innovation edge follow a few organizing principles.