Successful innovation is much more than a roll of the dice. Yet, many companies apparently feel lucky these days. They’re placing blind bets on innovation with huge sums of money on the line by failing to align innovation investments with business strategy.
Uniting innovation strategy with a company’s overall business strategy is essential to the success of any innovation program. However, a new PwC Innovation Benchmark study finds that most companies are struggling with alignment, particularly those that invest heavily in innovation.
Business leaders and strategists must remain deeply involved in helping set the innovation agenda in today’s more inclusive innovation operating environments—in which companies are opening up their innovation process to more stakeholders and contributors, both inside and outside the organization. Fortunately, within this new more open innovation framework, companies have an excellent opportunity to achieve better strategic alignment.
PwC’s Innovation Benchmark study, entitled “Reinventing innovation: Five findings to guide strategy through execution,” is based on a survey of more than 1,200 executives in 44 countries. It also includes insights from in-depth conversations with executives managing innovation initiatives at leading companies.
The study aims to understand how executives view innovation today and what they are doing to optimize its contributions to their businesses. We looked at innovation across a wide range of factors, including strategy, operating models, culture, metrics, and other factors, to understand how innovating companies are creating business value from their efforts.
Overwhelmingly, our respondents told us that innovation must reap measurable financial rewards to be considered successful. They indicated that sales growth is far and away the most important metric of success.
Nagraj Kashyap, corporate vice president of Microsoft Ventures, for example, was adamant that innovation investment must lead to measurable financial and strategic returns. “If that doesn’t happen, it’s just a waste of everybody’s time,” he said.