
The Boston Consulting Group has released its annual report on the state of corporate innovation. It’s rather interesting to note the press coverage that the report has spawned. Strangely, the commentary seems to focus on a reported increase in the number of companies forecasting a decrease in R&D spending. Even self-proclaimed innovation guru, Bruce Nussbaum, reported on his blog that “most corporations are cutting back on R&D and other innovation investments.” It makes one wonder if anyone actually read the report.
I did, and I suggest you do too. There are some very good insights in the report. Until you get around to it, here are some of the highlights.
While the economic crisis has caused some companies to lower the priority of innovation, most companies (64%) still consider innovation a strategy priority. This priority is quite justified. The BCG report cites that there is a strong connection between innovation competence and corporate success. Putting their money where their mouth is, fifty-eight percent of participating companies plan to increase their spending on R&D. Many of these companies plan to shift the emphasis of their innovation to cost control. Only 14% plan to reduce their innovation spend.
CEOs are considered the most visible champions of innovation, yet few CEOs see themselves this way. This represents a serious gap in the expectations of management and innovation workers and may be a factor contributing to why only slightly more than half of the respondents are happy with the return on their company’s innovation spend.
The report also finds that there is a tendency to pull back on innovation investment in rapidly developing economies, with innovation taking on a more local flavor. It will be interesting to see if this is an early indicator validating Nussbaum’s recent prediction of a slowdown in globalization.
Responding companies identify their biggest innovation challenge is move from an idea to a delivered product. This isn’t very surprising. All too many organizations confuse ideation with innovation. The emphasis on collecting lots of ideas rather than the full cycle innovation best practices undermines the ability of organizations to achieve their innovation objectives.
The BCG report is full on other fascinating information. You can find the full report here.











Gleaning Innovation Insights From The News
If you live in the world of innovation, you know that stay current on things is important and not just those things that are directly related to your work. You need to look around at everything and ask yourself some key questions. What does this mean? How does this impact other things? What is the opportunity that this reveals?
Here are some examples from today’s newspaper (I like the Wall Street Journal) to consider.
In Nevada, some people have found playing hard-rock music to be an effective way to repel Mormon crickets. Hmm… What is it that makes this so? Is the underlying principle useful more broadly? Is there an abstraction to be made here?
Ford is still losing money, but has slowed its cash burn. It looks like Ford is showing it will be able to something that the other Big-3 automakers can’t—rebuild their company without taxpayer assistance. Kudos for this! What else does this tell us though? What had allowed Ford to be different and how does this translate to other industries?
Microsoft is reporting its first ever decline in quarterly revenue. What are the predictable impacts on the rest of the software industry? How does this tie in to other high-tech sectors? What about the relationship to the consumer space?
More entrepreneurs are taking a pass on paying themselves to keep their businesses going. What does this tell us about the investment climate? What pressures does this create on the costs of services and the costs of personnel? Should larger companies consider similar measures?
Apple gets egg on its face over baby-shaking game. Makes you wonder who’s minding the i-store. What lesson does this misstep hold for us? Was this simply a failure of management? How could this have been prevented?
These are just a few of the headlines from today’s WSJ. What news items are you seeing that can provide useful insight for future innovation? Are you just reading the news, or are you analyzing it and extracting out useful innovation lessons?
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