Northwestern University's Kellogg Graduate School of Management and Kuczmarski & Associates Release Innovation Best Practices Study

Business Wire, Oct 20, 2000

Business Editors

CHICAGO--(BUSINESS WIRE)--Oct. 20, 2000

The latest results of "Winning New Product and Service Practices," an ongoing national study conducted by Kuczmarski & Associates management consulting firm and Northwestern University's Kellogg Graduate School of Management, confirm the role of innovation in creating long-term corporate growth. The study shows that new product and service innovation positively drives a company's stock price and valuation. Nearly 80 percent of the most successful (the "best") companies view their new products and services as significant contributors to their stock prices.

"Companies that make new products a priority are the market innovators," said Tom Kuczmarski, president of Kuczmarski & Associates and professor at Northwestern's Kellogg Graduate School of Management. "This study confirms that they are clearly the leaders in their industries," he added.

Study Objectives and Methodology

The study's objectives were to identify best practices, address key issues and concerns, and indicate benchmarks and an overall framework for new product and service innovation. The data was gathered through an in-depth survey that was sent to key product and service development professionals. The study incorporates data and statistics from 208 firms representing a balanced mix of product and service companies across a variety of industries. The definition of the "best" was determined by a combination of self-rated financial scales and greater than 60 percent success rate in new offerings.

Six Keys to Innovation Success

The K&A/Kellogg study points to six keys that will unlock innovation success: senior management commitment; clear-cut strategic and financial goals; a customer-based, company-wide system; a culture that encourages risk-taking entrepreneurs; the ability to measure; cross-functional teams.

"Most companies have these six keys, but they lack the critical ingredient to unlocking innovation: The Innovation Mindset that encourages team members to embrace risk, rather than avoid it, through disciplined approaches to creativity and newness. While it is possible to "grow" such a mindset internally, many corporate leaders are finding it more effective and efficient to outsource all or parts of their innovation plans, programs and processes," said Kuczmarski.

"New products and services are essential for companies to sustain their competitive advantage. Incorporating best practices into an organization leads to more innovative ideas and solutions among management. Following best practices is an efficient way to manage the new product and service development process within a company," noted Dipak Jain, Academic Director and Associate Dean for Academic Affairs, Kellogg Graduate School of management.

S.C. Johnson & Son, Inc. as Example of Innovation Leaders

Innovation can eventually become a core competency for a corporation. S.C. Johnson & Son, Inc. is an outstanding example of an innovative company. As a consumer packaged goods company with household brand names that include Pledge, Windex, Glade, Raid, and others, millions of consumers use their products daily. Within the past four years, new products such as Glade Candle Scents, Windex Outdoor, and Pledge Grab-It have added incremental revenues to their growth targets.

While Fisk Johnson, head of S.C. Johnson & Son, Inc., is a profound advocate of innovation, there is a sense of trust and risk-taking that permeates this company. Innovation teams throughout the company are given permission to take risks and fail. Their key to success is matching technological advancements with customer wants and needs. Moreover, they've figured out how to do it consistently for decades, which has resulted in profitable growth and endeared an entire employee base to the family-owned corporation.

Kuczmarski & Associates is a leading management consulting firm, located in Chicago, Illinois, specializing in helping companies to accelerate growth through innovation.

As a globally recognized pioneer in management training, the Kellogg Graduate School of Management, located in Evanston, Illinois, offers innovative executive education from leading thinkers on today's business concerns and tomorrow's business opportunities.

Details of the Kellogg/K&A Best Practices study including a list of companies surveyed are available on request.