In a recent review of CB Insights’ 2018 State of Innovation report, a comprehensive analysis reflecting the perspectives of nearly 700 senior strategy executives worldwide, a significant revelation emerged. This analysis was conducted by a seasoned professional at a company specializing in Development and Innovation (D&I), providing a unique perspective on the findings.
As per the report, a staggering 85% of strategy executives affirmed that innovation stands as a pivotal factor in determining the future performance of their respective organizations. This sentiment, although predictable, underscores the profound emphasis placed on innovation within the corporate landscape.
Despite the acknowledgment of innovation’s pivotal role in future success and the anxiety surrounding potential disruption, a surprising trend emerges. The report divulges that companies allocate 78% of their innovation budgets towards incremental improvements of existing products and processes. The question naturally arises: Is this a conscious strategy aimed at maximizing immediate fiscal gains? For instance, does it represent a calculated move driven by the notion that $1 in incremental net profit, derived from cost savings (COGS), approximates to approximately $5 in incremental sales? Alternatively, could other factors be steering this strategic decision?
One significant factor that potentially influences this strategy is the issue of confidence. Even among the “High Performer” companies outlined in the survey, merely 9% described their organizations as proficient in Design and Development. While 30% expressed confidence in their idea generation abilities, their faith in the Development and Innovation process wanes.
The reality is that the intricacies of the Development and Innovation process remain elusive and unmastered by many. Returning to the findings from CB Insights, a noteworthy 57% of the surveyed companies admitted to not adhering to a formal innovation process. Astonishingly, 71% claimed to have established metrics for measuring innovation, yet a glaring problem emerges here. Those companies monitoring performance, on average, are tracking a mere 2.9 metrics, which appears insufficient to foster significant breakthroughs.
The Learning Curve of Medical Device Development and Innovation
The process of Development and Innovation is not something that can be taught but rather is learned through hands-on experience. This principle becomes even more pronounced in industries like medical device development, where a myriad of interrelated, interdependent variables is guided by evolving standards rather than rigid rules. In such an environment, confidence is paramount and can only be achieved through a demonstrated mastery of the D&I process.
In light of the critical role that innovation plays in determining future corporate performance, organizations would be wise to embrace a strategic approach to Development and Innovation. In doing so, they can navigate the intricate landscape of innovation with confidence and purpose.