Booz Allen Hamilton’s annual study of the world’s largest corporate R&D spenders finds two primary success factors: aligning the innovation model to corporate strategy and listening to customers every step of the way.

How do companies innovate successfully? They can spend the most money, hire the best engineers, develop the best technology, and conduct the best market research. But unless their research and development efforts are driven by a thorough understanding of what their customers want, their performance may well fall short — at least compared to that of their more customer-driven competitors.

John Schiech, president of the DeWalt division of Black & Decker (the division that makes power tools used by professional contractors), put it simply. When asked what made his com­pany so successful, he responded, “It’s engineers and marketing product managers spending hours and hours on job sites talking to the guys who are trying to make their living with these tools.”

This insight represents a further amplification of our ongoing research into the costs and value of corporate innovation. In 2006, as in the two previous years of our annual study of the Booz Allen Hamilton Global Innovation 1000 — the 1,000 publicly held companies around the world that spent the most on research and development — overall corporate revenues among these companies increased 10 percent.

Once again, their overall spending on research and development also rose, to US$447 billion this year. And as in years past, we found no statistically significant connection between the amount of money a company spent on innovation and its financial performance. ...

View The Customer Connection: The Global ­­­Innovation 1000

by Barry Jaruzelski and Kevin Dehoff

Barry Jaruzelski, a vice president with Booz Allen Hamilton in New York, is the firm’s lead marketing officer.

He has devoted more than 20 years to addressing corporate strategy, organizational transformation, and time-to-market improvement issues in hightechnology industries and for manufacturers of highly engineered products.

Kevin Dehoff, a vice president with Booz Allen in New York, is the global leader of the firm’s innovation business. He has spent more than 15 years helping clients improve efficiency and effectiveness in product development.

Also contributing to this article were Booz Allen Hamilton Senior Associate Luke Vaccaro, Associate Michael Urban, and s+b Contributing Editor Edward Baker.

Download The Customer Connection: The Global ­­­Innovation 1000

PDF format, 377KB, 18Pages.

Resilience Report is a monthly update on business complexity and strategy-based transformation. An exclusive service for readers of strategy+business, it offers original research, case studies, and other intellectual capital from s+b and Booz Allen Hamilton.

Comments (0)

Show/Hide comments

Name

Email

Website

Title

Comment

smaller | bigger

Add Comment