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12.01.06

Innovation Excellence

Arthur D. Little investigated in a study, which focuses on how companies worldwide improve profitability and growth through effective innovation management. From the announcement:

According to the study, innovation excellence can boost profit (EBIT) margins by 4 percentage points from 15 to 19%. However companies struggle to get innovation management right. The 25% best innovators are still getting 10 times more output (new products, services etc) than the 25% worst innovators!

If you follow the recent discussions about outsourcing (especially India and China) and competitiveness of regions/countries, one of the arguments is that innovation and creativity is one of the main competitive differentiators in future for Europe. So getting this right is not a nice add-on, but crucially important. In my point of view (see also what I have written on innovation recently), the difficulty with innovation management is that every organisation needs a different approach. Consequently, there is not one standard approach or solution. This is different from let’s say ERP or CRM, where you can find much more common activity chains. I am convinced that getting innovation right is one of the most challenging tasks companies will have to tackle.

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