McKinsey provides a set of capabilities, tools, and approaches to help companies “innovate at scale”—continuously driving superior business performance by innovating across products, services, processes, and business models.
Most companies understand the importance of innovation but fall short when it comes to execution. While 84 percent of global executives told us in a recent survey that they believe innovation is extremely important to their growth strategies, 94 percent were unsatisfied with their innovation performance. We bring both creativity and rigorous analytics to our clients, helping them transform their innovation performance by focusing on four requirements for innovating at scale:
A clear strategy
We support clients as they develop a clear innovation strategy that meets their business-growth targets and strategic objectives. We do this by helping clients set financial targets related to innovation, define metrics to measure performance, and identify strategic areas on which to focus investments.
A strong pipeline of profitable innovation
Innovation depends in part on a company’s ability to get better, more profitable ideas into its pipeline. We help clients identify the areas of their business that are ripe for innovation, and mine those areas for ideas. We then support them in rapid prototyping and business-case development to quickly build those ideas into profitable businesses. We also help clients reap the benefits of “open innovation,” positioning them to look beyond their own boundaries to gain access to ideas, knowledge, and technology that add to the value of their own resources.
Smart, fast, and consistent execution
We have a variety of exclusive approaches for helping clients get higher returns from their investments in research through better execution. Using proprietary benchmarks along with in-depth diagnostic tools and capability-building methodologies, we support clients in improving and sustaining the productivity of their R&D functions. We also help clients build the types of repeatable, error-free, scalable processes that are necessary for both incremental and breakthrough innovation.
A capable, mobilized organization
To create an environment that promotes innovation, we help clients motivate talent by organizing people in the right roles and then arming them with the tools to be successful. We help clients design an organizational structure to execute their specific R&D strategy, addressing issues such as talent management and development, culture change, global collaboration, performance management, external collaboration models, and the role of research and development (R&D) leadership.
Our Portfolio Management tools help companies improve the return on investment of their R&D pipeline through better capital allocation and decision making.
Our proprietary Fingerprint Diagnostic tool allows a client to benchmark its innovation performance relative to its peers. The tool helps the client create a clear plan for innovation based on the company’s “innovation archetype” (for example, leading innovator or fast follower) and its strengths and weaknesses, which allows the client to determine where to invest and what to do to improve performance.
McKinsey’s Success Lab assesses a company’s research productivity and helps embed best practices. By using these best practices—derived from more than 250 labs worldwide and from our work with leading academic and commercial labs—clients can get higher returns on their research investments.
Our Insights to Action approach combines hard data with creativity, helping our clients accelerate breakthrough ideas. We help companies move from a big idea to a commercial offering—either a product or a service—quickly and cost-effectively while minimizing risk. The approach helps clients first decide “where to play,” and then helps them generate insights about consumer needs, define the specific problems that customers would like to have solved, prioritize the testing of the assumptions underlying the pursuit of a product idea, and create and test product prototypes.
Recent examples of our work
- We helped a semiconductor company reduce both its development costs and its time to market. With the client we performed a diagnostic of each engineering department to identify improvement opportunities, bottlenecks, and prerequisites for implementing a transformation, and then piloted and rolled out a “lean” productivity-improvement program to each department. The client achieved a 20 percent performance improvement and shortened planning processes by 30 percent, which allowed it to deliver on development milestones and reduce its multimonth project delays.
- We supported a global consumer-electronics company in transitioning from a fast follower into a leading innovator. We helped the CEO set a clear innovation strategy, and design new processes, performance metrics, and portfolio governance. Using the Insights to Action approach, the client was able to create a new breakthrough portfolio pipeline; it now has more than 10 new areas of innovation under development, each with the potential to generate $500 million or more in revenue.