A PLAYBOOK FOR THE NEW CHIEF INNOVATION OFFICER

BILL POSTON

39%64%

8%

Source: Apple, IBM & Royal Dutch Sell 2012 Annual Reports

Growth Expectation

Assets + Free Cash Flows

Growth expectations as percent of total market value

NYSE Valuation[2012]

Shareholders expect growth

It’s Getting Harder to Move the Bottom-line

Many are turning to “Innovation”

Source: Leslie Known, Wall Street Journal 2012; Samsung & Siemens 2012 Annual Report

‘’Our latest figures confirm our

power of innovation”

33,528“Technology innovation… accounts for our growth &

stellar performance”

“Our constant innovation and desire for positive

change…”

High Tech invests more in R&D

8.3%4.8%

4-Year Average R&D Spend as a Percent of Revenue[2008-2011]

Cross-Industry Average

73%M o r e

HIGH-TECHSPENT

Source: Booz&co. The Global Innovation 1000: Comparison of R&D Spending by Regions and Industries

I D E A S I N P RAC T I C E

High-Tech Industry Average

And gets no more in return

2008 2009 2010 2011

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

0.73%

-12.52%

18.57%

8.93%

9.22%

-17.16%

15.52% 9.25%

HIGH-TECH

Year-Over-Year Average Revenue Growth[2008-2011]

4.2%

3.9%

BUT

CROSS-INDUSTRY

8%L e s s

REVENUEG R E W

73%M o r e

HIGH-TECHS P E N T

Source: Booz&co. The Global Innovation 1000: Comparison of R&D Spending by Regions and Industries

I D E A S I N P RAC T I C E

Source: Booz&co. The Global Innovation 1000: Comparison of R&D Spending by Regions and Industries

WHAT’S YOUR R&D EFFECTIVENESS RATIO?

8.3%3.9%

R&D Spend as % of Revenue0.4

7

HIGH-TECH INDUSTRY R&D EFFECTIVENESS RATIO YoY Average

Revenue Growth=

I D E A S I N P RAC T I C E

Poor R&D Effectiveness

Dis-Economies of ScaleUS Industrial R&D Spend by Size of Enterprise [1981-2011]

Sources: National Science Foundation, Science Resource Studies, Survey of Industrial Research Development, 1991, 1999, 2001, 2013.

1981 1989 1999 20110%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

71% 68%

41% 35%

13%10%

14%17%

6%6%

9%8%

6%8%

14% 17%

4% 9%23% 23%

Less than 1,000

1,000–4,999

5,000–9,999

10,000–24,999

25,000 or more

Lack of a strategyLack of alignment

Overloaded pipelineRampant incrementalism

123

Seven Chronic Problems

45

Short-term orientation 6Accountability for results

Lack of skills 7

Seven Chronic Problems

Enter the Chief Innovation Officer

Source: Capgemini Consulting Survey

43%o r s i m i l a r i n p l a c e

A CHIEF INNOVATION OFFICER ROLE,OF 260 LARGE COMPANIES SURVEYED HAD

04

Formulate and communicate strategy Shape portfolio and accelerate breakthroughsEvolve disciplines, competencies and climateMeasure, monitor and learn

010203

Primary Responsibilities

Innovation Results Transformation

Close Strategic Gaps

Improve & Expand Capabilities

Accelerate Change

SUSTAINAdjust Strategy

Optimize

Measure & Monitor Results

Plan Linkages

Learn

CultivateTalent

TRANSFORMGET READY GET STARTED

Define the ChallengeBuild A Cross-Functional Coalition

Articulate Imperative

Structure the Org

Optimize

Portfolio

Clean Out Pipeline

Take Stock,Focus on Results

Develop Roadmap

Formalize Strategy

Building Innovation Competencies

Innovation Strategy

Fuzzy Front End

Business Strategy

Innovation Leadership

Consumer& Customer

Insights

Brand

Technology

NPD Portfolio Management In-market Portfolio

ManagementIdea Concept

Portfolio Management

Launch Manageme

nt

Product Lifecycle Management

New Product Development & Commercialization

Results Analysis

Are your innovation capabilities sufficient to transform

your organization?

RESULTS

INNOVATION RHETORIC

INNOVATION

VS.

Join the conversation at www.thechiefinnovationofficer.com