Funding Growth in an Age of Austerity

Research-Technology Management, Nov-Dec, 2004

Funding Growth in an Age of Austerity. Gary Hamel and Gary Getz; Harvard Business Review, July-Aug. 2004. pp. 76-84.

Want to out-innovate your competitors? Of course, but it won't happen by taking the usual steps of conducting R&D more efficiently or by increasing R&D budgets, write Hamel and Getz. Rather, the two consultants advise that companies need to squeeze more innovation out of each dollar invested. Drawing upon the successes of companies like Cemex, W.L. Gore, Epic Games, and Shell Chemicals, they advocate "five imperatives for dramatically improving innovation efficiently":

1. "Free your innovators"--boost the percentage of employees who consider themselves innovators.

2. Increase the proportion of radical ideas in the pipeline.

3. Look outside more for good ideas and people.

4. Do more low-cost, "'under-the-radar" experimenting in order to increase the ratio of learning over investment in innovation projects.

5. Increase management's commitment to a relatively small number of broad innovation goals--and remain consistent in that commitment.