Investments in innovation are essential to developing new competitive advantages and thus vital to securing long-term economic growth. More specifically, research from Booz & Company found that companies with stronger open innovation capabilities were seven times as effective as their peers with weaker capabilities in terms of generating returns on their R&D investments.
Although the benefits of investing in open innovation are widely recognized, many companies are struggling to reap all the potential rewards. The main issue is that open innovation is usually not truly integrated into the company’s R&D strategy. This, in turn, creates complex open innovation processes where decision-making and execution are often slowed down by limited resources, internal politics and sometimes even company culture.
Overcoming the challenges linked to the misalignment between innovation efforts and business strategy is crucial to better leverage open innovation. This is confirmed by the aforementioned research, which also found that the size of investments is not a differentiating factor, but rather strategy is what determines the success of an innovation initiative.
An example that supports this point is ENGIE, a French multinational electric utility company and industry leader in the Dow Jones Sustainability Index, which is applying the full power of its research and innovation capabilities to become the world leader in zero-carbon transition as a service, as described in its newly released 2019-2021 strategic plan. The group explains that its corporate strategy relies heavily on “an ambitious innovation policy to identify emerging needs and respond to them in an innovative and responsible way”. In addition, the company’s CSR ambition Opening New Opportunities also has a clear link to innovation.
ENGIE stands out by having an innovation strategy that is aligned with the company’s overall goals and strategy. This alignment enables ENGIE to bring together the necessary capabilities to capture, develop, and commercialize the best sustainable ideas and in turn to gain a financial advantage from open innovation. Specifically, ENGIE’s open innovation approach is based on:
Corporates can no longer ignore the imperative to innovate – especially in order to avoid being disrupted by today’s startups. As ENGIE showcases, companies can realize the gains from open innovation if it is made a core part of their strategy. If you are interested in learning more about how Finch & Beak helps companies ensure that they are focusing on what matters most to them, please contact Bas Nuijten, Senior Consultant, at email@example.com or say hello by calling +31 6 28 02 18 80.