Which Innovation Efforts Will Pay Harvard Case Solution & Analysis

Successful innovative form, which leads to customer acquisition and profitability is a rare and difficult to achieve, and thus it can be concluded from the observation of the results of many efforts companies'innovation. Some have tried to invest heavily in research and development. But the author of the recently studied public companies, representing nearly 60% of global R & D expenditure and found that above a certain minimum level, as a rule, there is no correlation between R & D spending and financial indicators, such as sales or earnings growth. For many companies, the development of new products hit-or-miss. But according to the author's research, successful innovation is not magic. It comes from the attention to a few important criteria. The key question is not how much to spend, but how you spend. The author introduces the "return on innovation investment," or ROI2, methodology, which correlates directly with organic growth and innovation expenditure links to financial performance in a way that may lead decision makers to generate higher, more reliable returns on innovation and R & D. ROI2 approach is based on a series of innovative studies in the past seven years, with companies in the consumer goods, health care and chemical industries. In order to become more efficient, the company needs to diagnose its innovative practices and opportunities. The diagnosis may be quite different from one company to another, which is why the adoption of sectoral indicators not working. Individual profile of innovation is the value and quality of innovation portfolio and can be clearly expressed as "efficiency curve of innovation." This curve allows companies to plot the annual cost of innovation projects in relation to the financial impact of these projects and to "decide for growth." "Hide
by Alexander Kandybin Source: MIT Sloan Management Review 10 pages. Publication Date: 01 October 2009. Prod. #: SMR332-PDF-ENG

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