How Your Timeframe is Stifling REAL Innovation – and What You Can Do About It

When we run our innovation survey with organisations, one of the key questions we ask is “What is your timeframe for a return on innovation?”.  We give three options:

  1. 0 - 18 months
  2. 18 months – five years
  3. five years +

Invariably, most respondents answered that their organisations timeframe for innovation is in the first two categories i.e. the organisation either want a return within 18 months, or within five years. 

Well – what’s wrong with that?  In some work by Clayton Christensen, he identifies how different time frames, resulted in different innovations, and different ROI’s.

ROI Demanded by Executive or Board

  • 0 - 18 months
  • 18 months – five years
  • Five years +

Type of Innovation

  • Process improvement
  • New and better variations of existing products
  • Whole new products, radical innovation

The problem with two shorter timeframes is that process improvement, and variations on existing products, will only ever help you keep up with the competition - you will never get ahead of them.  To radically, step out of the pack, you need to invest in ideas that will have a return in five or more years.

Isn’t that what every organisation wants - to get above the grind and compete in whole new fields?  Organisations that innovate like this, have a 30 to 40% greater return than their competitors, in the long run.  Organisations that don’t innovate fall behind their competitors by between 2% and 8% per annum - they're not standing still - they're losing value.

Why The Short Time Frame On Innovation?

So, given the potential for much greater returns with a longer ROI on innovation – why the short timeframes?   It’s not because people don’t know about it.   It’s not because they don’t understand, how long things will take.  It is not because they’re lazy.

It’s because of the political and shareholder pressures, of quarterly and annual reporting.  It is because of the demands of the board, on the executive for quick reports and good headline numbers (so it should be no surprise then that privately owned companies do better with long-term innovation, than publicly owned companies).   What can you do about it?

If you want to get better, longer term, innovation – you need to be strategic about it, and most of all – you need to educate your executive and your board, that short termism will eventually kill the company.

If you’d like some help to educate your board, or a short presentation to your executive, get in touch with Cris: or (+ 61) 0438 545 607.