Inspiration: – Innovation Culture Eats R&D for Breakfast

Posted on 14/11/2011


Hutch Carpenter skriver på
Research and development is a mainstay of the innovation strategy for companies. And with good reason. R&D can invent new products and technologies that redefine markets. Think electricity, telephones, airplanes, semiconductors, the Internet. R&D can pave the way for whole new industries. Exciting, for sure!But there’s a problem. Too many companies treat R&D as their fundamental innovation strategy. R&D as the source of market differentiation and financial results, an “invent your way to prosperity” mentality. It’s a technology-led view of innovation.

Booz & Company tackles this issue head-on in its just-released annual report on the Global Innovation 1000, titled “Why Culture Is Key“. The report compares the R&D spend of companies to innovation performance. It draws the following conclusion:

There is no statistically significant relationship between financial performance and innovation spending, in terms of either total R&D dollars or R&D as a percentage of revenues.

Spending more on R&D won’t drive results. The most crucial factors are strategic alignment and a culture that supports innovation.

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Posted in: Inspiration