June 12, 2007
News & Opinion: (2 of 7) Payback: Making Innovation Pay Off by Rebecca
(from James Andrew, author of Payback)
Payback is the result of a simple insight – we saw that innovation matters to leaders, and we saw that it isn’t working.
It isn’t working because leaders don’t recognize innovation for what it is – the process of transforming knowledge into profitable growth. They romanticize it, fall in love with ideas, and think that the critical test of innovation is whether they’re generating enough of “big” ideas. In fact, most businesses have too many ideas, not too few. In the survey, only 17% of executives said “not having enough ideas” was a barrier to innovation. What they need to get better at is managing the ideas they already have.
Innovation isn’t an art form – it’s a business process. The goal of any business is to generate incremental profit. And that should be the goal of an innovation program as well.
Innovation needs to generate cash payback – and to do so in a strict timeframe. Companies that succeed at innovation – like BMW and Samsung – are doing exactly that.
About Dylan Schleicher
Dylan Schleicher has been a part of the 800-CEO-READ claque since 2003. Even though he's stayed on at the company, he has not stayed put. After beginning in shipping & receiving, he joined customer service and accounting before moving into his current, highly elliptical orbit of duties overseeing the ChangeThis and In the Books websites, the company's annual review of books and in-house design. He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.