The July issue of Harvard Business Review contains a terrific article entitled Funding Growth in an Age of Austerity, by Gary Hamel and Gary Getz. It offers some practical strategies on how to out-innovate your competition, despite today’s continuing focus on R&D cost-cutting, and how to squeeze more innovation out of every dollar you invest. If you are responsible for managing or leading innovation in your firm, this is a must-read article!
“A company can’t outgrow its competitors unless it can out-innovate them. And in these austere times, that is only going to happen if a company is capable of substantially raising the yield on its innovation investments. Achieving such a step function improvement requires more than just a bit of R&D belt-tightening. It demands a fundamentally new way of thinking about innovation productivity, as well as a set of strategies that have the power to deliver a whole lot more bang for every innovation buck.”
In this article, the authors debunk the myth that a company’s innovation productivity is limited by its level of investment. In other words, if an organization is obsessed with its near-term earnings, it will tend to neglect investment in innovation. According to Hamel and Getz, this view is just plain wrong! In their opinion, there is much that organizations can do to increase their innovation productivity, without a major investment. They have identified five key strategies that can help organizations to dramatically boost their innovation efficiency:
The article then describes how to improve these measures, and includes a number of compelling real-world examples of organizations that have succeeded in each area.
You can purchase a downloadable version of this article for US$7 from Harvard Business School by clicking here. It’s a worthwhile investment!