The target value needs to be apportioned to relevant business “owners” and cascaded down to their organizations in the form of performance targets and timelines. If they can make their numbers using other, less risky tactics, our experience suggests that they (quite rationally) will.Įstablishing a quantitative innovation aspiration is not enough, however. The target itself must be large enough to force managers to include innovation investments in their business plans. Quantifying an “innovation target for growth,” and making it an explicit part of future strategic plans, helps solidify the importance of and accountability for innovation. It helps to combine high-level aspirations with estimates of the value that innovation should generate to meet financial-growth objectives. A far-reaching vision can be a compelling catalyst, provided it’s realistic enough to stimulate action today.īut in a corporate setting, as many CEOs have discovered, even the most inspiring words often are insufficient, no matter how many times they are repeated. Kennedy’s bold aspiration, in 1962, to “go to the moon in this decade” motivated a nation to unprecedented levels of innovation. In the digital age, the pace of change has gone into hyperspeed, so companies must get these strategic, creative, executional, and organizational factors right to innovate successfully. Own way, in accordance with their particular context, capabilities, organizational culture, and appetite for risk-they will improve the likelihood that they, too, can rekindle the lost spark of innovation. Yet we firmly believe that if companies assimilate and apply these essentials-in their While our years of client-service experience provide strong indicators for the existence of a causal relationship between the attributes that survey respondents reported and the innovations of the companies we studied, the statistics described here can only prove correlation. Please email us at: be sure, there’s no proven formula for success, particularly when it comes to innovation. If you would like information about this content we will be happy to work with you. We strive to provide individuals with disabilities equal access to our website.
The next four essentials deal with how to deliver and organize for innovation repeatedly over time and with enough value to contribute meaningfully to overall performance. The first four, which are strategic and creative in nature, help set and prioritize the terms and conditions under which innovation is more likely to thrive.
These often overlapping, iterative, and nonsequential practices resist systematic categorization but can nonetheless be thought of in two groups.
Taken together, the essentials described in this article constitute just such an operating system, as seen in Exhibit 2. Since innovation is a complex, company-wide endeavor, it requires a set of crosscutting practices and processes to structure, organize, and encourage it. What we found were a set of eight essential attributes that are present, either in part or in full, at every big company that’s a high performer in product, process, or business-model innovation. What can other companies learn from their approaches and attributes? That question formed the core of a multiyear study comprising in-depth interviews, workshops, and surveys of more than 2,500 executives in over 300 companies, including both performance leaders and laggards, in a broad set of Yet hard as it is for such organizations to innovate, large ones as diverse as Alcoa, the Discovery Group, and NASA’s Ames Research Center are actually doing so. In this engaging presentation, McKinsey principal Nathan Marston explains why innovation is increasingly important to driving corporate growth and brings to life the eight essentials of innovation performance.