The key to innovation success does not lie in the volume of spending invested in developing and building innovations. The key to success lies in focus and coherence, says Cesare Mainardi, CEO of Booz & Company, in an interview with the American newspaper The Wall Street Journal.
What are the most important activities leaders can pursue to spark innovation within their organization? The Wall Street Journal asked several leading experts to give their view on the topic, including Mainardi. “Too many leaders are still buying into the myth that if they invest enough money in research and development, they can become the next Apple or Google. But, of course, it's not that simple. For eight years we've studied the world's 1,000 largest corporate R&D spenders in our Global Innovation 1000 study. And every year we come up with the same finding—there is no statistically significant relationship between financial performance and innovation spending, in terms of either total R&D dollars or R&D as a percentage of revenues” says Mainardi.
“The secret is not money – it's coherence. The companies that excel at innovation always have one characteristic in common. They know what they are truly good at in the marketplace, and they focus their innovation efforts around this core capabilities system–that particular combination of talent, knowledge, team structures, tools and processes that differentiates their company and contributes extraordinary value. My advice to leaders: Identify exactly what your company does uniquely well and build a distinctive innovation strategy around this. Indeed, our advice is to build your overall business strategy around this core capabilities system. When companies achieve this state of coherence, that's when innovation magic happens”.