Value Creation and Games of Innovation

Abstract

OVERVIEW:Value creation and capture are not limited to creative breakthroughs but, rather, involve a range of activities by which products and services are developed and delivered to the marketplace. When technical leaders were asked to identify their “best” practices and strategies for managing innovation, it turned out that those practices were generally unrelated statistically to sales growth. However, some of the practices became statistically significant when the firms were grouped according to the “games” of innovation in which they elected to compete and that shared similar ways of creating and capturing value. Eight such games were identified that form clusters of similar R&D activities. Within each game, the firms that achieved high levels of profitability and growth did so not so much by adopting best practices as by adapting their capabilities and practices to the requirements of value creation and capture in the particular game.