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A PLAYBOOK FOR THE NEW CHIEF INNOVATION OFFICER
BILL POSTON
39%64%
8%
Source: Apple, IBM & Royal Dutch Sell 2012 Annual Reports
Growth Expectation
Assets + Free Cash Flows
Growth expectations as percent of total market value
NYSE Valuation[2012]
Shareholders expect growth
It’s Getting Harder to Move the Bottom-line
Many are turning to “Innovation”
Source: Leslie Known, Wall Street Journal 2012; Samsung & Siemens 2012 Annual Report
‘’Our latest figures confirm our
power of innovation”
33,528“Technology innovation… accounts for our growth &
stellar performance”
“Our constant innovation and desire for positive
change…”
High Tech invests more in R&D
8.3%4.8%
4-Year Average R&D Spend as a Percent of Revenue[2008-2011]
Cross-Industry Average
73%M o r e
HIGH-TECHSPENT
Source: Booz&co. The Global Innovation 1000: Comparison of R&D Spending by Regions and Industries
I D E A S I N P RAC T I C E
High-Tech Industry Average
And gets no more in return
2008 2009 2010 2011
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
0.73%
-12.52%
18.57%
8.93%
9.22%
-17.16%
15.52% 9.25%
HIGH-TECH
Year-Over-Year Average Revenue Growth[2008-2011]
4.2%
3.9%
BUT
CROSS-INDUSTRY
8%L e s s
REVENUEG R E W
73%M o r e
HIGH-TECHS P E N T
Source: Booz&co. The Global Innovation 1000: Comparison of R&D Spending by Regions and Industries
I D E A S I N P RAC T I C E
Source: Booz&co. The Global Innovation 1000: Comparison of R&D Spending by Regions and Industries
WHAT’S YOUR R&D EFFECTIVENESS RATIO?
8.3%3.9%
R&D Spend as % of Revenue0.4
7
HIGH-TECH INDUSTRY R&D EFFECTIVENESS RATIO YoY Average
Revenue Growth=
I D E A S I N P RAC T I C E
Poor R&D Effectiveness
Dis-Economies of ScaleUS Industrial R&D Spend by Size of Enterprise [1981-2011]
Sources: National Science Foundation, Science Resource Studies, Survey of Industrial Research Development, 1991, 1999, 2001, 2013.
1981 1989 1999 20110%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
71% 68%
41% 35%
13%10%
14%17%
6%6%
9%8%
6%8%
14% 17%
4% 9%23% 23%
Less than 1,000
1,000–4,999
5,000–9,999
10,000–24,999
25,000 or more
Lack of a strategyLack of alignment
Overloaded pipelineRampant incrementalism
123
Seven Chronic Problems
45
Short-term orientation 6Accountability for results
Lack of skills 7
Seven Chronic Problems
Enter the Chief Innovation Officer
Source: Capgemini Consulting Survey
43%o r s i m i l a r i n p l a c e
A CHIEF INNOVATION OFFICER ROLE,OF 260 LARGE COMPANIES SURVEYED HAD
04
Formulate and communicate strategy Shape portfolio and accelerate breakthroughsEvolve disciplines, competencies and climateMeasure, monitor and learn
010203
Primary Responsibilities
Innovation Results Transformation
Close Strategic Gaps
Improve & Expand Capabilities
Accelerate Change
SUSTAINAdjust Strategy
Optimize
Measure & Monitor Results
Plan Linkages
Learn
CultivateTalent
TRANSFORMGET READY GET STARTED
Define the ChallengeBuild A Cross-Functional Coalition
Articulate Imperative
Structure the Org
Optimize
Portfolio
Clean Out Pipeline
Take Stock,Focus on Results
Develop Roadmap
Formalize Strategy
Building Innovation Competencies
Innovation Strategy
Fuzzy Front End
Business Strategy
Innovation Leadership
Consumer& Customer
Insights
Brand
Technology
NPD Portfolio Management In-market Portfolio
ManagementIdea Concept
Portfolio Management
Launch Manageme
nt
Product Lifecycle Management
New Product Development & Commercialization
Results Analysis
Are your innovation capabilities sufficient to transform
your organization?
RESULTS
INNOVATION RHETORIC
INNOVATION
VS.
Join the conversation at www.thechiefinnovationofficer.com