The Strategic Value of Innovation
Innovation is tangible and its strategic value lies both in top line and bottom line performance. Depending on the industry you are in, the top line value of innovation will amount to between 40 and 60% (for example, new/enhanced products and services, new/enhanced market presence, and better stakeholder relations, including primary customer service interactions). Bottom line performance enhancements will generate up to 40%. These will include new and better ways of doing things internally, business process improvements, culling of outdated practices, and a keener focus on what matters inside the organization. The reason this occurs is that the environment created by management to support innovation in organizations motivates employees to think and act differently. This is achieved through various cues and changes to such things as the management control systems and the performance management systems.