White Paper on Innovation and Business Acumen

Innovator Financial Styles and Financial Performance [Jan 2007]

Executive Summary
Innovation is a vital task for companies and countries. The current focus for improving innovation is to find and implement better organizational processes. The current approach assumes that if the processes are correct and effective, then essentially any manager can be put into an innovation task or role. However this ignores the issue of the differences between individuals in their innovative financial styles. By taking this into account we believe we can make the innovation process more effective and more predictable.

Based on our research, this White Paper argues that there are significant differences in psychological endowments between individuals in their innovation impact. Most managers do not have such an impact. Even those who do differ significantly in their impact on financial performance and capital generation. By taking these issues into account, companies can improve their innovation programs, improve the individual contributions of innovators, better match the styles to the market goals of the organization, and make them more relevant to the psychological assets they have amongst their innovation managers.

Our research gains powerful support from other independent research on innovation, notably the annual Booz Allen studies on R&D spending by companies, which we refer to in this White Paper.