strategy+business Winter 2013 : Page 45

Esmeijer of Philips Lighting cautions that people must focus on the insights they desire from the tools, not simply the process of using them. “We have all kinds of tools at Philips that you can use to calculate or play with things. People very quickly jump on them, sometimes before they get the problem they’re trying to solve right. We want to make sure people think about the bigger picture—what we want to learn, or what we’re trying to manage—and then use the tool,” he ex-plains. “In the end, lighting is a human experience.” Finally, ensuring proper implementation of digi-tal tools, in the experience of Matthias Kaiserswerth, the director of IBM’s Zurich Research Lab, requires a significant cultural effort. “There is definitely a gen-erational component to the willingness to make use of many of these tools,” he says. “The learning curve can be rather steep, especially for older employees, so cul-ture matters. Ensuring the involvement of top manage-ment is critical.” The Importance of Being Bold ment stage is crucial to sustained competitive advan-tage. But they will make a powerful addition to your digital tool kit. Remember that even if you aren’t experimenting with these tools, chances are your competitors are, or they will be soon—and they will be the ones reaping the benefits. As Bill Blau of told us, “The pace of business today does not allow for years to go by. If you’re not innovating now, you’re going to die quickly.” A better understanding of what customers and markets need will undoubtedly lead to the launch of more successful products. And yours could be the com-pany developing them. + Reprint No. 00221 feature innovation It’s essential to be prepared when adopting any digi-tal improvement in your innovation process. And for productivity tools that require heavy investment, com-panies need to have good training in place, as well as internal consistency regarding what the tools can and can’t do, information formats, and usage conventions. When it comes to market and customer insight tools, however, our advice is to prioritize experimentation. Of course, the implementation issues noted by our in-terviewees must be taken into account, but the key is to leave yourself some room for flexibility. These tools, many of which are still unproven on any large scale, demand a bolder approach. Companies need to be willing to spread the money around: Some of these tools, such as customer immer-sion labs and big data, will require significant invest-ment. But the transformative benefits that insight tools can bring to your innovation process can far outweigh their costs. In our Global Innovation 1000 studies over the years, we’ve consistently found that a major innova-tion success factor is listening to what your customers have to say. And in fact, our 2007 survey revealed that companies that engaged directly with their customers had twice the return on assets and triple the growth in operating income of other responding companies. If customer insight is the next frontier of innovation, these digital tools will be game changers. They won’t replace productivity tools—efficiency at the develop-Resources Barry Jaruzelski and Kevin Dehoff, “The Customer Connection: The Global Innovation 1000,” s+b , Winter 2007: Companies need to align their innovation model to their corporate strategy and listen to their customers. Barry Jaruzelski and Kevin Dehoff, “The Global Innovation 1000: How the Top Innovators Keep Winning,” s+b, Winter 2010: Highly innovative companies consistently outperform because they are good at the right things, not at everything. Barry Jaruzelski, John Loehr, and Richard Holman, “The Global Innovation 1000: Making Ideas Work,” s+b , Winter 2012: How success-ful innovators bring clarity to the early stages of innovation. Barry Jaruzelski and Matthew Le Merle, “The Culture of Innovation: What Makes San Francisco Bay Area Companies Different?” Booz & Company white paper, Mar. 23, 2012: Booz & Company and the Bay Area Council Economic Institute identify the strategic, cultural, and organizational attributes that have led to the sustained success of the San Francisco region. Alice Rawsthorn, “Catching Up to 3D Printing,” New York Times , July 21, 2013: The current state of digital manufacturing. Jeff Schumacher, Simon MacGibbon, and Sean Collins, “Don’t Reengineer. Reimagine.” s+b , Summer 2013: How your business can realize its digital potential, from the team at Booz Digital ( digital/). Booz & Company’s Global Innovation 1000 study microsite: innovation1000. Booz & Company’s online innovation strategy profiler, innovation-profiler: Evaluate your company’s R&D strategy and the capabilities it requires. For more thought leadership on this topic, see the s+b website at: 45

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