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November 19, 2006

Booz Allen Hamilton on Money and Innovation

ME Liz Strauss wrote this at 10:41 am

I Agree, But I’m Not Surprised

BusinessWeekONLINE

On November 13, Booz Allen Hamilton released the 2nd Annual Global Innovation 1,000 Survey. Business week’s Jesse Stanton summarized the study in an article “How to Turn Money Into Innovation,” on November 14.

The study, which analyzes the relationship between R&D spending and performance, focused on the 1,000 public companies located anywhere in the world that spent the most on Research and Development in 2005. The study by Booz Allen Hamilton found that

The Booz Allen Harrison study showed that some companies have learned how to successfully underspend in R&D and overperform in providing innovation — their spending on average half as much on R&D as their peers in industry, but their performance is as much as three times higher. The companies that stand out in the study include Kellogg, Apple, Boston Scientific, Tata Motos, Christian Dior, and Kobe Street.

High innovating companies each follow their own unique model.

The similaries found in the Booz Allen Hamilton Survey weren’t surprising.These common factors included what Booz Allend called a “value chain.” The value chain speaks to four key areas in which highly innovative companies exhibited strong competency: ideation, project selection, product development, and commecialization. Innovation is a company-wide investment.

Sustainable innovation depends on having the tools and processes to move from ideation through commercialization. Second, successful companies link R&D with C—customers. At Illinois Tool Works (ITW), for example, R&D engineers are required to spend time working in customers’ plants — Business Week Online on the Booz Allen Hamilton Blogal Innovation 1,000.

Mr. Stanton asks for more concrete answers. I find the value chain confirmation here is powerful enough model. Innovation thrives in a culture that values innovation beyond the simple action of throwing money in the direction of generating new ideas. The investment of currency in innovation has to be considered, thought through as any sound business venture does. Such an invetment recquires thoughtful process from ideation through the decision to move forward on a project, through every customer centered decision that drives the development, to each piece and parcle that introduces and informs the public about the new product during the commercialization phase.

In other words, innovation must be based in quality thinking that that stands on a firm and deep intimacy with the customers’ experience and understanding of the customers’ needs. That is the key driver to productive and useful innovative change that fuels growth.

How new is that idea?

–ME “Liz” Strauss

Click the title to read the Business Week article
How to Turn Money into Innovation





Filed under Analysis, Business Life, Productivity, Successful Blog | 7 Comments »




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7 Comments to “Booz Allen Hamilton on Money and Innovation”

  1. November 19th, 2006 at 4:26 pm
    MB said

    It is interesting how the Booz Allen Hamilton research is finding corelation between outsourcing to and funding in Research and Development in China and India. Yes, one of the drivers is the need to be closer to fast-growing markets.

    The other driver is also to leverage the skills in the East

  2. November 19th, 2006 at 4:35 pm
    ME Strauss said

    Yes, MB,
    Welcome.
    There’s no question that leveraging the skills there is a motivator. Still it makes sense that with a market the size of China finally opening there’s a need/want to be close to the customer.

  3. November 20th, 2006 at 9:52 am
    Mike said

    Hi Liz,

    Focus innovation on solving customer problems. Now there’s a bolt from the blue!
    I’m always glad to see timeless wisdom ‘rediscovered’ by a new survey or study! ;-)

    A while back I argued that one of the best-selling business books of the past decade, Good to Great, did exactly that.

    Mike

  4. November 20th, 2006 at 10:08 am
    ME Strauss said

    Yeah, Mike,
    I know exactly what you’re saying. It was actually my words that said. The article was still asking questions. . . . Go figure. :)

  5. November 20th, 2006 at 10:14 am
    Mike said

    Liz,

    I knew the key graf was yours. These things remind me of the commercial NBC ran one summer with the tag line: “If you haven’t seen it, it’s all new to you!” LOL

    Mike

  6. November 20th, 2006 at 10:16 am
    ME Strauss said

    Great NBC line! I love that, Mike!

  7. November 10th, 2007 at 1:36 am
    oyun siteleri said

    I knew the key graf was yours. These things remind me of the commercial NBC ran one summer with the tag line: “If you haven’t seen it, it’s all new to you!”

    hehehe:)this is a good idea

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