- Research Highlight
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New research finds that investments companies make in information technology increase profitability and sales more than investments in advertising or R&D do.
NEW: Research report on how to achieve long-term digital success. Read it open access now »
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It has long been assumed that companies develop products for consumers, while consumers are passive recipients. However, this paradigm is flawed, because consumers are a major source of product innovations. This article suggests a new innovation paradigm, in which consumers and users play a central and active role in developing products. The article also summarizes key findings from studies on consumer product innovation conducted in the United States, the United Kingdom and Japan.
Companies such as Procter & Gamble, Cisco Systems, Genzyme, General Electric and Intel are often credited with having attained market leadership through open innovation strategies. By tapping into and exploiting the technological knowledge residing beyond their own R&D structures, these companies outmaneuvered rivals. But while other organizations try to follow their example, many are failing because they neglect to ensure that the outside ideas reach the people best equipped to exploit them.
The article “Innovate Better” by Fareed Zakaria in the June 13 issue of Time magazine looks at the state of business innovation in the U.S. and concludes it needs more help.
From time to time a company’s project truly stands out, creating exceptional value and having an impact on the industry. IBM’s AS/400 development effort in the 80s was a game changer and gave IBM a competitive edge. Apple Inc.’s success in creating the iPod portable media player and iTunes online store is another more recent example of a great project — one that changed the way people listen to and buy music. Why are such projects so rare — and why can’t more projects be like them?
The timeline of energy development projects now is largely driven by sustainability and social performance issues, says Marvin Odum, president of Shell Oil. That’s prompting innovations in how the company involves external stakeholders, incentivizes employees and drives changes throughout the entire energy industry.
The increase in outsourcing and offshoring of complex work has resulted in innovation efforts that require coordination across cultural, geographic and legal boundaries. If that coordination is mishandled, companies can find themselves needing to make multimillion- or even billion-dollar changes. The complexity of the task makes midcourse corrections likely. Managers must anticipate and adapt their processes in order to reduce risk and, ultimately, cost.
This article explores the process of innovation in 13 global companies. Many of the standard arguments for how to encourage innovation were confirmed, but some surprises were uncovered as well. The article organizes its key insights around five persistent “myths” that continue to haunt the innovation efforts of many companies. The five myths are: (1) The Eureka Moment; (2) Built It and They Will Come; (3) Open Innovation Is the Future; (4) Pay Is Paramount; and, (5) Bottom Up Innovation Is Best.
Universities can be major resources in a company’s innovation strategy. But to extract the most business value from research, companies need to follow seven rules.
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