Is Money the Key to Innovation?

A recent study by Booz Allen Hamilton, designated less than 10% its Global Innovation 1000 as 'high-leverage'. This title indicated that these companies got the most bang from money spent of innovation within their companies. These 94 companies led the pack in a wide set of measures.

Money alone, the researchers concluded, "can't buy innovation". The criteria included sales growth, growth margin percentage, growth margin growth, operating margin percentage, operating income growth, total shareholder returns and market capitalization growth over a five year period ending in 2005.

Although these high-leverage companies had a variety of approaches to integrating innovation into their processes, the distinguishing factor that led to their success was "a focus on building multi-functional, company-wide capabilities."

Additionally, although, these companies tended to be strongest in one of the four phases of innovation; ideation, project pruning, product development and product commercialization, they were adept at sheparding ideas through each step of the innovation value chain.

Three companies singled out as recognized industry leaders in innovation, Toyota, Apple, and Caterpillar, have "systematic ideation processes". Google was also noted for the furious pace at which products are shuttled from Google Labs to a debut as a Google Service.

The lesson learned from these companies? Strengthen any weak links in the innovation value chain so products can survive from ideation to the marketplace.