This article focuses on these two essentials—aspire and choose—not because the other six are any less important, but because without these two in place, innovation investments often become scattershot and are more likely to disappoint. Setting aspirations and making tough resource-allocation and portfolio choices also are areas where a company’s top leaders play a unique and disproportionate role in creating change. Some leaders are doing this by defining what we call the “green box”—a quantification of how much growth in revenue or earnings a company’s innovation needs to provide in a given timeframe. As we’ll see, it’s a concept that can help animate the aspirations and choices that collectively separate innovation leaders from the rest of the pack.

What the numbers say

It bears repeating: simply mastering a few of the eight essentials—for example, by generating and harnessing consumer insights or engaging more effectively with start-ups—is not enough. As the innovation performance curve depicted in Exhibit 1 shows, companies that master five of the essentials enjoy a substantial uplift in economic-profit performance, and there is an even greater uptick with seven or more.

Exhibit 1

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This finding is consistent with our experience, which is that the very best innovators benefit from interdependent, organization-wide activities and practices aimed at delivering innovation. Effective innovation operating models spur companies to generate, prototype, develop, de-risk, deliver, and scale innovation initiatives. A well-integrated system that’s grounded in the eight essentials also challenges leaders to break out of their comfort zones, while giving them visibility into the ongoing portfolio of projects so that they can confidently invest valuable time, people, and funds to their best effect.

Another noteworthy finding is the widening gap we see in two of the essentials: aspire and choose (Exhibit 2). Here, it seems that leaders are getting better while laggards mostly run in place. In our experience, there are many reasons for this gap, starting with the enormous differences we’ve observed in how deeply executives focus—or don’t—on innovation-related activities. A worrying datapoint from our survey is that despite the high importance that executives place on innovation, fewer than 25 percent said they were involved in setting innovation targets and budgets. That figure points to the shift in mind-set—and management approach—that many leaders must make.