More than ever, corporate executives consider product innovation to be a competitive necessity and a key factor in driving business growth through increased revenue, lowered costs, and reduced time to market. This is reflected in the fact that even during times of economic crisis R&D spending has held up well.
This paper describes a unique approach to managing innovation processes and the people involved in those processes, called innovation governance. Innovation governance is a system of cross-functional decision-making processes that define, align, and manage innovation activities across the entire product lifecycle, ensuring the achievement of strategic growth goals. It encompasses business decisions that impact every phase of the product lifecycle and affect many parts of the organization.
Companies that follow best practices in innovation governance generate, on average, 49 percent of their revenue from products introduced in the past five years—twice as much as their non-best practice peers. These are typically the products with the highest profit margins.