Powerful Solving in the Foundation of Innovation - Matthew Battle
Saturday, February 14, 2009 at 11:06PM Why innovate? “No matter what anybody else tells you: corporations achieve competitive advantage through acts of innovation.” Peter Drucker According to the Boston Consulting Group 2006 survey Result, 72% of the executives rank innovation as a top-three strategic priority, up from 66% in 2005. 72% of respondents said their companies would increase spending on innovation in 2006. At the same time, many executives—nearly half of those surveyed—remain unsatisfied with the financial returns on their companies’ investments in innovation. Does that sound familiar to you? Why is innovation so important to CEO s? In the past, there has been a major trend among companies to reduce cost. 6-Sigma tools were so efficient for cost-cutting in transactional areas, as well as in technical areas, that their reputation has reached every big company. What they want: To gain money! This rigorous approach allows you to increase your margin by the given formula: Profits = Revenues – Costs Big profits can for sure come from decreasing your costs. But, in the end, even if a company has become the most efficient one on earth, it doesn’t mean it will be the most profitable. Why? Because the revenues will stay fixed, and more, will decrease year after year as the customer gets used to the product, and because competitors will launch some new, audacious products to compete with it!