The Innovation Premium: How Next Generation Companies Are Achieving Peak Performance and Profitability

170 Pages·2000·21.85 MB·English

by  Ronald Jonash

THE INNOVATION PREMIUM
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T HE
I N N O V A T I ON
P R E M I UM
How Next Generation Companies
Are Achieving Peak Performance
and Profitability
RONALD S. JONASH
TOM SOMMERLATTE
PERSEUS PUBLISHING
Cambridge, Massachusetts
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ISBN: 0-7382-0360-2
Copyright © 1999 by Arthur D. Little, Inc.
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First paperback printing, November 2000
We would like to dedicate this book to our clients and
colleagues, whose tremendous insight and
experience helped make it possible.
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CONTENTS
Acknowledgments ix
Introduction x
PART 1: WHO'S GOT THE INNOVATION PREMIUM?
1 Meet the Next Generation 1
Alcoa, British Petroleum, Canon, Chrysler,
Lucent Technologies, and Nokia
2 The Problems of Business and Management Today 15
What Used to Work So Well No Longer Does
PART 2: HOW DO YOU GET THE INNOVATION PREMIUM?
3 Set the Pace 23
Build Platforms, Not Just Products
4 Keep the Pace 41
Move Seamlessly from Concept to Customer
5 Accelerate the Pace 55
Invest in Innovation
6 Vary the Pace 71
Create Worldwide Networks of Innovators
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viii CONTENTS
7 Sustain the Pace 93
Build a Culture of Continual Change and Learning
8 Win the Race 103
Capture the Innovation Premium
Appendix A: Arthur D. Little Global Survey on Innovation 115
Appendix B: A Survey of Financial Analysts'
Perceptions of Innovation 137
Notes 143
Index 147
ACKNOWLEDGMENTS
This book is the fourth in a series of Arthur D. Little books on critical
technology and innovation management issues. These books include
Breakthroughs, Third Generation R&D, and Product Juggernauts, and our
first set of acknowledgments go to the trailblazing efforts of those authors:
John Ketteringham, Ran Nayak, Phil Roussel, Kamal Saad, Jean-Philippe
Deschamps, and Tamara Erickson, and especially to Phil and Jean-
Philippe, who provided so much encouragement for this book.
The Innovation Premium is based in large part on the collective ex-
periences of many companies that are innovation trailblazers in their
own industries. We would especially like to thank those who have shared
their experiences with us for this book, including, Nokia (especially Kaj
Linden, senior vice president), DaimlerChrysler (especially Tom Moore,
vice president, liberty and technical affairs), Alcoa (especially Frank
Lederman, vice president and chief technical officer, and Greg Smith,
former director of strategy and planning, Alcoa Technical Center),
British Petroleum (especially David Jenkins, chief technology officer
[retired in September 1998], Chris Clarke, team leader in oil manage-
ment [retired], and Atul Arya, group planning manager), and Canon
(especially Dr. Ichiro Endo, managing director and chief executive of
product development).
Major emerging best practices featured in this book have also arisen out
of the Arthur D. Little series of Best of the Best Colloquia on Technology
and Innovation Management, where senior executives from leading com-
panies across industries have shared their hard-won knowledge and
lessons learned. We want to acknowledge the importance of their ideas
and experiences for this book.
Many of the key themes and findings are substantiated by Arthur D. Lit-
tle's continuing research in technology and innovation. We thank the
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