Many executives we speak with about improving the innovation of their companies ask us how to open the minds of their CEOs to transform their organizational cultures. Many CEOs fear that culture is too soft to manage. Innovation feels like groping in the dark, and it requires dedicating money and employees to innovation projects. Finally, CEOs fear innovation will take their focus off their day jobs and achieving quarterly goals.

The truth is companies that invest in innovation (including cultural transformation) can have over 20 percent better financial returns. Would your organization like to see a substantial improvement in its financial returns?

We are fond of saying you can manage what you measure. With our InnovationOne Culture Index©, you can measure culture and capability to be innovative. With innovation strategies and goals that have timetables and measures, you can drive innovation and financial success.

InnovationOne’s research on the ROI of innovation revealed that companies scoring in the top quartile of our InnovationOne Culture Index© reported higher financial performance than bottom quartile performers by as much as 22%. We also learned that top innovators earned a 6.3% total shareholder return premium (stock price appreciation and dividends) over three years.

Our research is not alone. Consider the following sampling of research that found similar conclusions:

  • John Kotter and James L Heskett, in their book Corporate Culture and Performance, found that firms with innovative and adaptive cultures achieve extraordinary financial results. The results include nearly three times the review growth, 900% higher stock price growth, and 755% higher net income growth.
  • Booz & Company found that organizations that focus on innovation capabilities report higher profit margins by up to 22 percent.
  • Arthur D Little found that companies with a passion for innovation experience an increase in EBIT of four percent and more than ten times higher returns from their innovation investments.

The evidence is overwhelming. Companies that work on improving their innovation improve the bottom line.

Innovation is quite doable. It is tangible, measurable, manageable, and will drive results. You can transform your organization with the right information, direction, and culture. You can improve your innovation while focusing on excellence with your current operations and financial obligations.  If you don’t, you’ll fall behind your competition.

We have identified seven traits of highly innovative organizations through our over 20 years of research and consulting in the private and public sectors. Click here to learn more about our Seven traits of highly innovative organizations that drive improved financial performance.

About InnovationOne®, LLC.

InnovationOne®, LLC, helps organizations worldwide build a culture of innovation and make it sustainable. InnovationOne® uses a scientifically developed assessment to measure, benchmark, and improve your company’s culture and capability to innovate and enjoy better outcomes and financial results. Companies scoring in the top quartile of our InnovationOne Culture Index© reported higher financial performance than bottom quartile performers by as much as 22 percent.