The full paper on this subject by KGP associate partner Dr Andrew Woodward (pictured) was first presented at Cranfield University Business School in 2008.

UK annual government statistics continue to suggest that innovative organisations are more successful in terms of revenue growth, profitability and share value. Most commentators, including this author, argue that sustained and rapid innovation is fundamental to the competitiveness of organisations rooted in the high labour rate capital intensive economies of the Western Europe. It is considered that there are four key elements to successful innovation and that when implemented successfully they contribute significantly to the rate and hence cost at which innovation can be achieved.

Why Innovate?

There have been numerous studies over the last couple of decades which suggest a positive correlation between R&D investment and performance. As long ago as 1989, Franko suggested a demonstrable link between R&D expenditure and subsequent sales revenues relative to competitors.
Similarly, Geroski and Machin  asserted that innovating companies tend to have ‘much larger market shares’ and ‘higher growth rates and profits’. This latter point is supported in the UK by the annual R&D scoreboard. This currently assesses R&D investment and performance in the top 850 UK and 1250 global companies by R&D investment.

Measuring innovation is critical to success
During his 30 year plus experience in industry KGP associate partner Walter McKinlay  has managed many areas of new product development and innovation. Key to achieving success in Professor McKinlay’s view is creating the ability and processes for measuring innovation. During his time in industry and at the University of Strathclyde Walter developed an effective assessment tool the results of which are summarised in the diagram below.  Tools and techniques of creating, managing and measuring innovation processes will feature in several masterclasses being organised under the iNet brokerage banner.