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Posts Tagged ‘innovation’

R&D “Intensity” on the Rise

November 11th, 2010 Comments off

Here’s another piece that highlights increases in research and devlopement spending as we exit the recession. Similar to what I wrote about the other day in regards to Panera, smart companies realize that spending on R&D now translates to better earnings in the future. 

“A typical company view was, ‘I cut capital spending because I don’t need incremental capacity with demand down,’ and SG&A is a bit of a necessary evil,” says Booz partner and report co-author Barry Jaruzelski. “But they cut R&D last; that’s the future revenue stream that these companies are protecting.”

As recently as earlier this decade the Apple iPod was born during a downturn.  Companies are wise to remember the past as they focus on spending with the future in mind.

There’s no question that 2009 corporate spending overall represented “a brutal hit,” says Jaruzelski. “But remember that even in the Great Depression, innovation didn’t stop. In fact, some of our biggest innovations came then, from the jet engine to the chocolate-chip cookie. Television was just being rolled out, and, by the way, Hewlett-Packard was founded in the 1930s.”

Read more at this link: http://www.cfo.com/article.cfm/14538872

Sustainable Business Truths: Perception is Reality

September 7th, 2009 Comments off

harvardbusinesspublishingHere’s a short piece from Harvard Business Publishing that makes the case that regardless of any arguments that can be made about whether or not global warming or climate change is real, the fact is that the business community needs to treat it as such.  The author of this piece has written a book called Green Recovery that may interest some of you as well.  His three main points in dealing with green business concepts are that resources are not infinite, the value is in the value chain, and climate change is a business and political reality.

Sustainable Business Truths: The Least Your Employees Need to Know. Andrew Winston.  Harvard Business Publishing. Wednesday August 26, 2009

Synchronizing Formal/In-Formal Rules & Learning From Failure

August 31st, 2009 Comments off

Often what managers say and what they do are two different things.  When a company’s formal rules/systems are not aligned with informal rules/systems there can be confusion, resentment, and misunderstandings that could be avoided if these things were in synch.  Also, different parts of the organization work best within different cultures so even saying that a company “has a culture” may be misleading.  The creative teams (like advertising, design, etc.) may thrive in loosely based teams while functional teams (like accounting, legal, etc.) may need a more rigid structure.  It is important to recognize that and find ways for those sub-cultures to exist while still maintaining ways for them to work together when needed.

For a company to excel at innovation, it must have high levels of creative capabilities, such as R&D, and production capabilities, such as operational execution. Moreover, the people with these capabilities need to work together seamlessly. For example, in setting up wise and decisive approval mechanisms that can separate the wheat from the chaff, companies must take a variety of factors into account — the designers’ original intent, the limitations of downstream production, and the needs of the marketplace — that are typically perceived differently on the creative and production sides.

Getting people to work well together requires not only measuring the successes, but also the failures.  It is as bad to waste time on a bad idea as it is to fail to capture a good one, but often managers focus only on the latter.  Certainly failure should be expected and even encouraged (if you aren’t failing “enough” you are missing out on some opportunities to be sure).  And, of course, companies can learn from failures if they take the time to effectively study them to avoid making similar mistakes in the future.  This article does a nice job exploring all of these concepts.

Right at this moment, in a conference room or at an executive off-site meeting, a group of senior leaders of a large global company are wondering why they aren’t innovating enough. They’re probably focusing on a few specific questions: “Why don’t we have enough good ideas? How can we tell which idea is going to be the next big thing? Why is it so hard to get an idea from the drawing board into the market?” Most telling of all is the question: “Why do we still waste resources on ideas that people don’t believe in?” In other words, even though an idea has been effectively “killed,” it still remains on the agenda, with nobody fully willing to learn from the mistake, put it to rest, and move on to other endeavors.

Are You Killing Enough Ideas?. Companies can improve their innovation performance by getting their formal and informal organizations in sync. Zia Khan and Jon Katzenbach. strategy+business. Autumn 2009.

Cost-Cutting & Innovation in Developing Nations

May 28th, 2009 Comments off

As I have mentioned in class, The Economist does an excellent job at exploring the business world — with “world” being the key word.  Unlike many other publications that focus on larger companies/nations, The Economist often contains reports filed from outposts where other journalists dare not tread.  An article from the print edition being published today has been posted to their website and it highlights not only cost-cutting but some of the things we’ve talked about as far as the globalization of business and the fact that competition these days is not limted to XYZ Company down the street or in the next town — it very often can come from the opposite side of the world.

COBBLED together from carts, old cars and anything else to hand, the improvised vehicles used by Indian farmers are often known as jugaad. The term also has a much broader meaning—referring to an innovative, low-cost way of doing something—as goods and services are provided in India at a fraction of the cost of those in developed countries. Ingenuity is a necessity when resources are limited and customers have little money. In a global recession it also provides a way for companies in India and China to expand into foreign markets where consumers are seeking better value for money.

A snip at the price. May 28th 2009. From The Economist print edition

If you are interested in other articles from this week’s issue, there is a page that contains links to all the articles:

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