The innovation commitment
Seven years ago, we unveiled research highlighting the existence of innovation’s eight “essentials”—a collection of attributes and behaviors that appeared to underpin superior innovation performance.1 Since then, we’ve validated the essentials through further research and seen them in action at hundreds of companies. This work has deepened our conviction that not only do the essentials matter but also that mastering them is critical to survival at a time when transformational growth is needed to defend against disruptive rivals (see sidebar, “Defining the eight essentials of innovation”). Simply put, the ability to develop, deliver, and scale new products, services, processes, and business models rapidly is a muscle that virtually every organization needs to strengthen.
Our latest research highlights a growing performance gap separating innovation “winners” from companies that merely muddle along. We recently compared innovation proficiency—based on competencies defined by the eight essentials—for 183 companies against a proprietary, company-level database of economic-profit performance. This analysis showed a strong, positive correlation between innovation performance and financial performance. Our research also shows us that innovation winners are extending their lead most conspicuously in two areas. First is the ability to set a bold yet plausible aspiration for innovation that is grounded in a clear view of the economic value that innovation needs to deliver. And second is the ability to make tough resource-allocation choices about the people and funds required to seize innovation’s value at a scale sufficient enough to make a difference.
This article focuses on these two essentials—aspire and choose—not because the other six are any less important, but because without these two in place, innovation investments often become scattershot and are more likely to disappoint. Setting aspirations and making tough resource-allocation and portfolio choices also are areas where a company’s top leaders play a unique and disproportionate role in creating change. Some leaders are doing this by defining what we call the “green box”—a quantification of how much growth in revenue or earnings a company’s innovation needs to provide in a given timeframe. As we’ll see, it’s a concept that can help animate the aspirations and choices that collectively separate innovation leaders from the rest of the pack.
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