Booz & Company Foresight

November 2011

Booz Foresight

Innovation 1000: Why Culture Is Key

Are there CEOs anywhere in the world who want their companies to become less innovative? Is anyone calling on employees to do a better job of thinking inside the box? No—everyone’s in favor of innovation and creativity. But ink and oratory aren’t enough. Nor is throwing money around. Booz & Company’s annual study of companies that invest the most in innovation reveals a surprising fact: Fewer than half say that their business strategy, innovation strategy, and corporate culture are aligned. Furthermore, the data reveals that the strategy-culture connection has a powerful multiplier effect, dramatically increasing the effectiveness of R&D spending. (Apple, named first for innovativeness by executives, ranks just 70th in R&D spending.)

The Innovation 1000 study, now in its seventh year, is recognized as the premier analysis of R&D investment globally. This year’s report shows what’s happened to spending levels, which companies and industries are investing the most, who’s investing most effectively—and why it is that some companies consistently get more from their R&D than others.

That theme—value for money—is much on the minds of executives everywhere. Please take a look at the three other articles I’ve listed below. One examines value-creation strategies honed by private equity firms that apply well to public and other private companies. The second, which we developed with Buddy Media, has brand-new findings about where social media marketing is adding value (and where it’s just making noise). The third looks at one of the knottiest problems in business and public policy: how to focus the healthcare industry on value, not just cost.

Best wishes,

Tom Stewart
Chief Marketing & Knowledge Officer

In This Issue

The Global Innovation 1000: Why Culture Is Key
by Barry Jaruzelski, John Loehr, Richard Holman
Our seventh annual study of the world’s 1,000 largest corporate R&D spenders focuses on the links among strategy, culture, organization, and financial performance. The study profiles how opinions about strategy, culture, and organization differ across the three fundamental innovation strategies. We show that nearly half of respondents reported that their company culture does not support their business strategy, as well as which elements of culture are most important to innovation success. As in years past, we also profile the R&D spend of the world’s 1,000 largest R&D spenders.read more >

Value Creation Tutorial: What Private Equity Has to Teach Public Companies
by Vinay Couto, Ashok Divakaran, Harry Hawkes, Deniz Caglar
Certain companies are singularly adept at adapting their business to create and sustain value over time, but most are not. It’s here that the example of top-tier private equity firms can be illuminating and useful. In this Perspective we explore seven private equity lessons that public companies can apply or adapt.download (717kb, PDF) >

Campaigns to Capabilities: Social Media & Marketing 2011
by Christopher Vollmer, Karen Premo
Booz & Company and Buddy Media recently conducted a survey of North American marketers to learn more about how companies are embedding social media into their marketing organizations and activities. This Leading Research summarizes the results of that survey.download (157kb, PDF) >

Transforming Healthcare Delivery
by Joyjit Saha Choudhury, Akshay Kapur, Snajay B. Saxena
As nations seek to expand services more cost-effectively, the stakeholders who pay the bills and provide the care must collaborate.download (315kb, PDF) >

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