As the importance of innovation is starting to become clear for corporate leaders, there are a few myths and bad practices that are also taking hold. For example, I have heard several innovation leaders talk about letting a thousand flowers bloom and espouse the notion that there is no such thing as a bad idea. In my experience, this premise is flawed and can lead to innovation having less impact within our companies. Not all ideas are created equal.
Getting our teams to generate a lot of great ideas is just the beginning. Successful innovation is the combination of great ideas with sustainably profitable business models. In my experience corporations have a much bigger problem - what to do with good ideas once we have them.
Innovation is the combination of creative new ideas with sustainably profitable business model. Regardless of the idea you are working on or how cool and amazing it is, eventually you have to solve for this equation; are you able to deliver value to customers in a way that is sustainably profitable?
When it comes to R&D spending, corporate leaders often want to know what others are doing. How much are other companies in different industries spending on R&D? Leaders want to know the level of spending in absolute terms (i.e. total expenditure), and also as a percentage of revenue. The presumption is that R&D spending is somehow connected to increased innovation, revenue growth and profits.