R.I.P. Innovation?

I came across a very interesting short BCG article (thanks to a friend) which mentioned some very interesting statistics about satisfaction regarding the end results of R&D led products - but does that mean that these "innovative" products sell better or make the people involved (executives, share holders, etc) happier? Does it significantly increase margins along with sales?

Click here to read article (and as always, I'll include some of it on here)

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BCG-Businessweek Innovation Practice

For most companies, innovation is the key to driving growth, shareholder value, and competitive advantage in today's global economy. But even at the best companies, up to a third of all innovation initiatives are draining valuable resources.

According to the most recent BCG-BusinessWeek innovation survey only 46 percent of senior management are satisfied with their return on innovation spending while 63 percent of chief financial officers are still unhappy with their innovation results. Innovation remains a top priority for 66 percent of respondents, and 67 percent are planning to increase their investment in innovation.

The problem these companies face isn't a lack of ideas—most of them have more than enough. It's that companies don't have a disciplined process for turning those ideas into cash. An effective innovation-to-cash process (ITC) is the foundation of successful innovation, which we define as profitable innovation.

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I can't deny that the numbers reported were a little surprising to me but then again, not really so much as I would expect. Infact, it actually reminded me of Nussbaum's "Innovation is Dead" post back from the last day of 2008 - something which I did partially see myself agreeing with but accepting such a statement proclaiming the death of innovation is also going a little too far). In any case, I think all of this presents something that us glossy-eyed idealistic developers (designers, technical professionals, etc.) may need to take a few steps back and reconsider how to optimize for better results because balancing the two (profits and R&D-based innovation) can be quite the juggling act.

There is often an all-too familiar battle between the execs and the creative development teams when it comes to decisions regarding how a product ought to be executed. It is one where the decision is ultimately made by the execs with creatives to rethink, defend the necessity, and articulate their points better in terms of business but of course, it still provides no assurance it will be fruitful.

So is there a better way to adapt the innovation-to-cash process so it promotes revenue, increases margins, and won't crush the creative, innovative spirit? Or has true innovation died as Nussbaum suggested, and been replaced by minute cosmetic modifications to a product/service?