Organising an effective R&D strategy, according to BCG
Critical Finding: Maximum Priority, Minimum Readiness
While innovation has never been a higher priority, the **maturity (or "readiness")** of innovation systems has collapsed. Post-pandemic uncertainty pushed leaders to focus on short-term agility, weakening strategic alignment.
The "Zombie" Risk
Without a clear strategy, innovation becomes a **"zombie"** organization: activities continue at pre-pandemic levels, but without clear strategic direction, they fail to create value.
**Fewer sales** from new products for companies adopting **NONE** of the 6 best strategic practices.
The Critical Gap: Problems Are Strategic, Solutions Are Operational
Top 3 Challenges Cited by Executives
Planned Actions for the Next Year
Companies are focusing on efficiency rather than strategic overhaul.
The Roadmap: Strategic Alignment and the Power of Generative AI
1. Start with Strategy (Nvidia Example)
Organizations with a **strong link** between business and innovation strategy are **DRAMATICALLY MORE EFFECTIVE**.
**CONCRETE CASE:** Nvidia, focused on accelerated computing, pivoted to AI chips after 2012, investing heavily in what was then a "zero-billion-dollar market," now making it the 3rd most valuable company globally.
The 6 Best Practices for Linking Strategy and Innovation
- Senior executive ownership (CEO)
- Clear sense of purpose for innovation
- Focus on competitive advantage
- Specified domains
- Target portfolio structure (Least adopted)
- Quantified objectives (Least adopted)
share of sales from new products for companies adopting **4 OR MORE EFFECTIVE PRACTICES**.
2. Accelerate Innovation with Generative AI (GenAI)
86% of companies are experimenting with GenAI. "Ready" innovators are **5 times more likely** to apply GenAI at scale. GenAI complements predictive AI by boosting creativity, ideation, and content production.
The 3 Pillars of GenAI Application (Objectives)
🚀 DEPLOY (Productivity)
**Objective:** Focus on "quick wins" with off-the-shelf tools to boost individual productivity and build initial experience at scale.
🛠️ RESHAPE (Efficiency)
**Objective:** Rethink critical internal functions (R&D, manufacturing) via GenAI to improve quality, speed, and efficiency, and free up resources for higher-value activities.
💡 INVENT (Growth)
**Objective:** Create new GenAI-enabled products, services, and business models to drive growth and sustainable competitive advantage (the highest potential return).
Concrete Examples by Pillar
DEPLOY (Examples)
- Use of "off-the-shelf" GenAI tools.
- **Automated meeting summaries** (e.g., Zoom).
- **Drafting of report outlines** (time savings).
RESHAPE (Examples)
- Sanofi: **40% reduction in clinical trial report creation time**.
- Mattel: **Quadrupling** the number of Hot Wheels concept images generated (ideation).
- Use of a virtual **"Devil's Advocate"** to challenge ideas.
INVENT (Examples)
- Microsoft **Copilot** for M365 (hyper-personalization assistant).
- L'Oréal **Beauty Genius** (personalized beauty advice via app).
- E-commerce optimization: **rapid creation of text and images** for product pages.
Impact on the CREATE Phase (Summary)
GenAI is a powerful aid in the **divergence** and **prototyping** phase. It allows for the rapid generation of a universe of options, images, UX designs, and 3D models. It can also act as a virtual **"Devil's Advocate"** to strengthen ideas by iteratively challenging them, ensuring rigor.
The AI Race: Disruption Risk vs. Adoption Rate (Exhibit 9)
This chart crosses companies' concern about GenAI disruption (Y-axis) with their current adoption score (X-axis). Industries are classified based on their position in these 4 quadrants:
