Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation.

Peter Drucker in The Practice of Management

For decades now, innovation has been considered essential to business growth and prosperity. Even today, according to a survey by the Boston Consulting Group (BCG) of more than 1,000 senior corporate executives worldwide, over 30% ranked innovation as their #1 strategic priority for 2006, and another 40% ranked it as one of their top 3 priorities. The survey also revealed that the total shareholder return for innovative companies vs. their peer group was almost 30% higher.

But what difference does being innovative really make – on people and the environment as well as the bottom line?

Attempts to measure the impact of corporate innovation is not new. Almost 15 years ago, Synectics Inc. conducted a study of 250 corporations to determine what kind of impact being innovative had on their performance. According to their study, 59% of the corporations they labeled as innovation “stars” reported a increase in market share over the previous year, while only 27% of the “spectators” group reported an increase. Similarly, employee satisfaction and morale were rated among the “stars” as 3.5 (on the same 5 point scale), while the “spectators” were rated at 2.6.

How about today? Here at Innovation Styles we are passionate about values-driven innovation. We are just as interested in the question of “Why and how are we innovating?” as we are “What are we innovating?” We’re inspired by the prospects of innovating a new world together.

This is why we have launched a full-scale research project that is focused on “The Triple Bottom-Line impact of corporate innovation.” To us, only part of the story is told in research that is focused on financial and market performance. We’re interested in the tangible, practical reality of how being innovative impacts people, the planet, and profits.

The questions on our minds include:

• Does innovation have a broad impact that makes a difference not only on corporate finances, but also on employee satisfaction, environmental sustainability, customer satisfaction, and social responsibility?
• Is there a ripple effect that impacts all of an organization’s stakeholders when the leaders consistently strive to foster innovation?
• What is the role of personal and corporate values in fostering this kind of innovativeness?

What about YOU?! What factors would you like to see us investigate? What do you predict we will discover in our research? What are your own practical experiences with the impact of innovation… and what do you imagine we might learn together?

Please share your thoughts and experience with us!

“What is the impact of corporate innovation?” This is a tricky, and sticky, question to research. As a start, I’m thrilled that you’re not assuming that a positive impact of innovativeness on corporate finances is the “be-all and end-all” of the study! But will the study address the negative impacts of corporate innovativeness on the environment – such as carbon emissions, non-biodegradable waste, and other consequences of how corporations have innovated to give society more and more products to consume? Will the study take into account the impact of corporate innovation in shaping a global economy characterized by huge disparities in wealth? You talk about values-driven innovation, but just how will this play in the research? Sorry… but I have more questions than input at this point. Ruth

These are great questions to ask! What if the study showed that companies that were more innovative were also more likely to be socially responsible – to society and the environment? What if companies that were more innovative also had a higher set of standards for employee well-being and social philanthropy? Would this be important to know?

We think so. This is what is prompting us to conduct a values-based research program. By values-based, we mean that the research design should be explicit in the values behind it, and look into the kinds of values that are behind corporate efforts to be innovative. 

We’re still in the midst of designing certain aspects of the study. We want to be able to address questions such as these to the fullest degree possible. Any suggestions about research methods, data base resources on individual companies or entire industries, would be most welcome!