The growth of the company’s long-term value is increased by the growth of gross profit and in turn by profitable innovations (RQ). Profitable innovations are based on the customer’s needs, are original and beneficial to the customer both in the short and long term. One of the best examples of this is Amazon.com, whose 26 years of sustained growth confirm that these principles work firmly in both growth and recession.
As innovation is complex and difficult to predict, it is high risk. Nobel laureate Daniel Kahneman discovered with Amos Tversky that it is inherent in people to avoid risks in uncertainty and to make skewed decisions or avoid decision-making. Therefore, science-based methods should be used in these situations.
Science-based creation of innovation strategy helps top managers make profitable innovation decisions by directing them to collect and use reliable data on customer needs and market opportunities, generate original innovation ideas, and make decisions with strong logic.
The strong logic of the innovation strategy is shown by clear correlations between customer needs, market opportunities, differentiated products/services and differentiated activities, innovations, gross profit growth and bonus schemes.
The effective implementation of the innovation strategy is supported by defining the competencies of managers and providing feedback that supports their development.
A science-based method of innovation strategy:
1) takes into account exactly the needs of the company and the specifics of the operating environment;
2) is based on the best scientific evidence;
3) is based on long-term experience in advising top managers.