International consulting firm AT Kearney informed us through their 2008 Report that the front end of the innovation process is a determining factor in the success of highest performing corporate innovators – a group that they described as Innovation Leaders.
In the Innovation Management Study 2008, AT Kearney analyses the qualities and practices of successful innovation. The study expands on A.T. Kearney’s European Best Innovator Competition, including more than 250 companies worldwide, across industries.
The study found that the most successful innovators:
- have a clear focus on a robust innovation strategy, investing three times more effort on the front end of the innovation process
- embrace open innovation.
AT Kearney Innovation Management
The three times number comes from an aggregation of the first three steps in the innovation process.
When you investigate the AT Kearney findings closely, in fact the Innovation Leaders are more sharply distinguished from the Followers the further towards the front end of the innovation process you look.
As clearly demonstrated by this graphic, the Innovation Leaders in fact spend six times the effort on the initial Innovation Strategy step.
This is followed by an idea generation step (no doubt clearly informed , directed and bounded by strategy) where the Leaders focus four times the effort to identifying the right ideas types of ideas – qualifying, shaping and reconfiguring them until they possess the right qualities.
The latter shaping and reconfiguration step crosses over into the idea screening stage where the Leaders spend double the effort of the Followers.
It is interesting to see how the relatively more significant effort at the front end of the innovation process effects effort at the back end. Followers spend far more effort than the Leaders in the concept development and commercialisation stages at the back end of the innovation process. As we know from the 1:10:100 “rule of thumb” (ie., for every dollar you spend in research you need to spend 10 in development ad 100 in commercialisation) the multipliers make the the back end of the research to development to commercialisation continuum an expensive place to play. A double negative for the Followers?
The Leaders distinguish themselves from the followers by carefully emphasising their efforts on blockbuster new product and service candidates. In direct contrast the followers waster there time and resources with too heavy a focus on incremental innovation.
For me, the AT Kearney Report serves to emphasise very effectively the performance distinguishing value of clear insight and preparation at the front end of the innovation process. Analytics obviously has a role to play in this!
The Report may be downloaded from here.
Evidence supported decision making at the front end obviously has a value added role to play in enhancing the results delivered by innovation. There are a number of other well credentialled innovation management authors including Langdon Morris are also lining up to support this view.
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