How do the top innovators keep winning?
Every year our annual Global Innovation 1000 study investigates the relationship between how much companies spend on R&D and their overall financial performance. And every year, we reinforce the conclusion that there is no correlation between the two. What matters instead are the capabilities that successful companies put together to enable their innovation efforts.
We have found that nearly every company follows one of three strategies, need seeker, market reader, or technology driver. And for each of these strategies, there is a distinct set of capabilities that top performers identify as most critical.
And for those companies that focus on the “right” capabilities, execute them well and align their innovation strategy with overall corporate strategy, we have observed what we call a “coherence premium”. We have found that companies ranked in the top third in terms of coherence had 22 percent higher profit margins, on average, and achieved 18 percent greater market capitalization growth.
What is your strategy?
What capabilities do you need to succeed?
Use this brief strategy assessment tool to profile your strategy and understand the capabilities you need to succeed.