It once was possible to think of innovation as a discrete event, the light bulb that was switched on suddenly to illuminate some dark corner of life. Change occurred at a measured pace, with the state of whatever art - science, medicine, business - advancing incrementally.

No longer. Particularly in business - where advances in information technology have created a global marketplace of unceasing, real-time activity -leapfrogs change, and woe to those who can't keep pace. The business whose innovative light bulb is not burning brightly and burning all the time risks being flattened by savvier, more aggressive competitors.

Innovate or die is the new credo, and it is being embraced broadly and fervently. Companies of all sizes spend more every year to come up with new and better products or new and better ways of doing business. However, far less clear than business's commitment to innovation is whether the commitment and the expenditures are paying off.

Innovation, a Growth Industry
In a 2005 study sponsored by Cisco Systems, 635 business and IT decision-makers from companies of all sizes ranked innovation as more important to their competitiveness than better education, lower wages, or reductions in corporate taxes. Not surprisingly, having the highest-quality product or service was the top-rated means of differentiating their businesses from the competition.

And across the economy, managers are doing more than just paying lip service to innovation. They're putting their money where their mouths are.

The world's top 1,000 corporate research and development spenders invested $384 billion in innovation in 2004, according to a survey by the consulting firm of Booz Allen Hamilton. This investment by the so-called Global Innovation 1,000 represents between 80 percent and 90 percent of total R&D spending by business worldwide. By comparison, innovation expenditures of the second 1,000 most active companies totalled only $26 billion in the same year.

While the lion's share of innovation investment continues to be made by developed countries, the rest of the world is catching up rapidly. R&D spending in China and India grew at an annual rate of 21.1 percent between 1999 and 2004, according to Booz Allen Hamilton, compared to 6.5 percent for the Global Innovation 1,000.

As innovation becomes more of a preoccupation, its focus is changing. Gone are the days when an innovation was acquired from experts outside the company and then installed like a new piece of equipment.

When a survey recently asked 199 executives to identify their most frequent collaborators in innovation, suppliers and customers were cited by 78 percent and company employees by 70 percent. By contrast, universities and federal labs were mentioned by only 32 percent and 17 percent respectively.

Carefully Focus the Innovation Effort
The competitive value of a fast and effective innovation engine has never been greater," says Booz Allen Hamilton Vice President Kevin Dehoff. "Yet of all the core functions of most companies, innovation may be managed with the least rigor. The key is to identify the priority areas where process improvements will have the greatest impact."

While it's possible that a shotgun approach to innovation spending will lead to a positive outcome, it's highly probable that it also will result in wasted resources. Better to precisely target the effort.

That's what happened at Zurich Airport several years ago after the bankruptcy of Swissair deprived the facility of its operational rudder. A private firm, Unique, was brought in to oversee operations and coordinate activities of the airport's 1,300 business partners.

The firm's managers weren't content to preside over the status quo. Instead they grasped the opportunity to create a system that would make every aspect of airport operations transparent to everyone involved in them, and in real time.

"We had this idea of creating a system that could give a high-level overview of what was going on all over the airport on any day, at any time," says Andrea Baroni, head of airport operations for Unique. "It needed to link together information from many different systems."

To make the vision a reality, Unique relied on Microsoft Certified Partners NeuroPie and Zühkle Engineering to create a custom solution, ZEUS, on the Microsoft .NET platform. The solution, which smoothly integrates different technologies to create a single real-time picture of operation, has lifted Zurich Airport out of chaos to a position on the industry's cutting edge.

Understand the Process
Successful innovation is about more than investment. That was made clear in a 2003 survey by the Boston Consulting Group in which a majority of executives expressed dissatisfaction with the return on their innovation investments (ROI).

Their disappointment likely stemmed from the complexity of the process, which can involve customer needs, internal business processes, and even corporate culture. An understanding of how such disparate elements come together is required if an innovation is to take hold and flourish.

Effective innovations that deliver a solid ROI aren't imposed from outside. Rather, they grow organically from within the organization.

Let netlink help you identify the priority areas where process improvements will have the greatest impact for your organization: offering effective innovations that deliver a solid ROI since 1995. Contact your account manager or click here to contact us now!