Just one in 10 firms is confident that its business has the right approach to breakthrough innovation, according to a new study from Arthur D. Little (ADL). In Breakthrough Innovation, ADL found that 88% of business leaders were dissatisfied with their strategies for nurturing breakthrough – or radical – innovation. At the same time, companies expected the revenue contribution of breakthrough innovation to double over the next five years.
The survey of leading European companies found that the time to deliver major revenue gains (three to 10 years) was a common barrier, due to short-termism and lack of project commitment.
Companies with clearly defined innovation goals and dedicated breakthrough teams saw 15% more revenue gains and expressed more confidence in their breakthrough innovation activities.

Based on the survey, the following practices were associated with better performance in breakthrough innovation:

1. Set strategic objectives for breakthrough innovation. Ninety percent of companies recognized the importance of defining specific strategic objectives for breakthrough innovation, but only half of them had done this. Those that had were four times more satisfied with the results than those that hadn’t.
2. Choose the right organizational model. The best approach depends on the complexity of the technology and the company’s capabilities in this area.
3. Use ring-fenced funding and “intrapreneurs” to protect against short-term and changing priorities.
4. Use agile processes with rapid iteration cycles to deliver new concepts fast. This is what start-ups do to challenge established players.
5. Actively manage the innovation ecosystem by establishing clear working practices and strong lines of communication with external networks and partners. 
6. Nurture a creative culture by using multiple tools, approaches, symbols and messages.
7. Fail again, fail better:move on and leverage the lessons learned.  

“Getting breakthrough innovation strategy right has become the ‘holy grail’ for today’s companies, regardless of size or sector,”said Rick Eagar, Partner in ADL’s Technology and Innovation Management practice. “However, our survey lays bare that there is still a long way to go before Europe’s large B2B companies’ efforts match their aspirations for robust breakthrough pipelines. Companies that win at radical innovation have three things in common: a clear vision articulated from the top, a well-organized and dedicated team, and no fear of failure.” 
The full report is available at:
www.adl.com/Breakthrough