Concern has been expressed in the business press about the low levels of innovation recently seen in US, European and Japanese companies. Despite huge sums spent on R&D, fewer than 5% of all new projects meet or beat targets for return on investment. This article discusses a radical approach to innovation based on new cutting-edge research from a range of leading innovation consultants that can help to build creative corporate cultures and boost innovation “hit” rates.
The article uses Apple iPod’s success to illustrate ways in which a company can “change the game” on seven of ten identified types of innovation. It then uses examples in the computer and passenger airline services to illustrate ways to take advantage of the “competitive innovation landscape.” Common mistakes that impede innovation are discussed, including companies confusing R&D with innovation, consumer marketing with consumer understanding, and innovation with technology. The article ends with a recounting of key lessons learned from the few successful innovators, including:
- Opening up networks to outside contributors;
- Scattering designers throughout the different functional areas of a company;
- Hiring more anthropologists and social psychologists;
- Changing incentives; and
- Turning the innovation process upside down by making consumer needs the beginning of the process rather than designing products and trying to create a need for them.
Source: Business Week; Aug 1, 2005