“We’re seeing a step change in the importance of innovation to the success of our clients and to the scale of the business benefits delivered. So, we decided to run this survey to start to quantify these benefits and to identify the practices that deliver them.
We asked over 1,700 board-level executives around the world what they see as the role for innovation within their organisation and how they see this changing over the next five years. Our research shows that, over the last 3 years, leading innovators have grown at a rate 16% higher than the least innovative. Moving forward, these same leading innovators forecast their rate of growth will increase to almost double the global average, and over three times higher than the least innovative companies. That translates into an average for all companies of $500 million in revenue over a 5 year timeframe.
Innovation is becoming a competitive necessity for companies and should be delivering significantly increased revenue growth. If it’s not, then executives need to be asking themselves what they could do to improve their innovation process. There is a transformation underway. Companies are changing the way they innovate. In this report we look at what the current leaders are doing and how their organisation, processes, culture, and other key elements are different, in the hope that others can benefit from these examples.
Breakthrough innovation and growth explores the impact that innovation has on growth and examines how leading companies are making innovation work for their organisations. The report explores three key questions:
1. How are companies using innovation to drive growth and what is the return on this investment?
2. How are approaches to innovation changing, particularly in light of a trend towards more disciplined innovation?
3. What are the best practices and critical success factors that deliver tangible business results?
To answer these questions we draw on insights obtained from interviews with board-level executives from 1,757 companies, across more than 25 countries and 30 sectors, who are responsible for overseeing innovation within their company. This is the largest and most comprehensive study of its kind exploring innovation from a global, multi-sector perspective. About this report
Throughout this report, we refer to incremental, breakthrough and radical innovation:
Incremental innovations are changes to an existing product or service. The changes to technology and business model are primarily aimed at protecting market share and maintaining margins. Competitors usually respond quickly to incremental innovations.
Breakthrough innovations make much more substantial changes to technologies and business models. Often called game-changers, breakthrough innovations create greater competitive advantage than incremental innovations. Competitors have greater difficulty responding to breakthrough innovations. As a result, a company with a successful breakthrough innovation increases revenues and margins.
A radical innovation creates drastic changes to the competitive environment for a product or service, or creates entirely new businesses. Radical innovations occur infrequently but can generate explosive growth in major new categories of products and services.”