5 Steps to Better Corporate Innovation

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Better company innovation doesn’t come down to one thing. But it may come down to five good habits, which together correlated strongly to the top 25% of corporate innovation performers.

Each year for the last ten, Strategy& has polled the 1000 global companies with the highest R&D spend on their habits and trends regarding innovation. In a previous post, I teased out one finding in the data: That innovation can’t be bought purely with R&D spend.

But the data did suggest a different path to higher performance. The key was to focus on a short, coherent list of capabilities and processes. Many top performers underscored this message with a bit of advice:

Don’t try being good at everything.

“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.

Instead, companies should start with their core innovation capability — the company’s superpower that directs them down a path to something customers need, in a way that competitors can’t easily replicate (or don’t want to).

This should be understood in the context of customer desires, competitor abilities and company strengths.

Consider:

— What do customers want?
— What are your competitors’ core competencies in new product development? (Circumvent them, if possible.)
— Apply these five capabilities and processes:

  1.  Align your innovations to customers, by staying alert to changes in market and demand.
  2. Track product/service technology and trend.
  3. Hire the subject matter experts you need
  4. Get your innovation team and business leaders talking. (Oliver Nussli, the head of project and portfolio management at Nestle, describes the desired end state this way: “The business side knows what it’s going to get, and the R&D side knows what it has to work on.”)
  5. Shorten the product development process; implement “agile inspiration”

This is a starting place for conversations about how to refine and tailor an individual company or business unit’s innovation strategy.

Don’t try being good at everything.

In the next installment, we’ll look at three different corporate personalities — each of them a strong innovator — and see how each type can get better.

– James Janega
@JamesJanega

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