The Path from Innovation to Execution

We received some interesting data last month from Leonard Nakamura at the Philadelphia Federal Reserve showing that the investment in both tangible and intangible assets slowed from the year 2000 on*. Although there is not yet any empirical evidence of an upturn in investment and R&D, the current discussions of innovation lead us to think that there is an upturn on the way. This is a good thing.

The interest in innovation signals to me that corporations are starting to think more strategically—looking beyond this quarter’s results to longer term improvements—to keep American companies ahead of the curve in a very competitive international market. To do this, you need to think about how to leverage your resources for maximum value. This is the essence of innovation—it is ultimately about resources. Ideas don’t just fall from the heavens on unsuspecting innocents. They are the result of a good process that brings together the right combination of human, knowledge and relationship resources.

The Apple iPod is a great example of this. The innovation wasn’t just about the technology and idea of the iPod itself. It was also about adding to the technology and market competencies at Apple (human resources), building bridges with the owners of music (relationship resources), and the development of a downloading system (knowledge resources).

It is this type of systemic thinking that will be needed to deliver on the current interest in innovation. Read more in Michael’s piece below to get some ideas on how to broaden your thinking about innovation and execution.

*This data can be found on a website that our firm hosts called the Intellectual Capital Knowledge Center. To read more about this data, look under Presentations on the Resources page.

-Mary Adams   2006