Most corporate-executive suites are packed with all manner of state-of-the-art technology. But one low-tech instrument is in demand in nearly all of them: a periscope. Not a literal one, perhaps, but CEOs would no doubt welcome the ability to see around corners and spot the approaching forces that could disrupt their businesses or give them an innovation advantage over their peers. In this report, The Boston Consulting Group takes a close look at tools already in use at some of the corporate world’s innovation leaders to identify and explore new pathways to growth, including business incubators and accelerators, corporate venture investing, and strategic partnerships. Drawing on our extensive experience in the field, we offer insights into their most effective applications and describe how they can best be used in concert for maximum strategic advantage.
Innovation is high on most CEOs’ agendas—some 77 percent of those we surveyed in 2013 said it was their top strategic priority or one of their top three priorities. (See “Looking Back at Lessons from Leaders: The Most Innovative Companies 2013.”) Corporate leaders are urgently concerned about innovation for one simple reason: growth through innovation is the surest, straightest route to superior performance. In the Americas, for example, innovative companies generate three-year total shareholder return premiums of 6.7 percent over their industry peers; the ten-year premium is 2.9 percent. The spread is even wider in Asia, where innovators enjoy a 14 percent three-year premium and a 6.9 percent ten-year premium over their peers. (See Exhibit 1.)