How Innovation Really Works by Anne Marie Knott

Your company is spending millions on R&D every year, but despite your best efforts, that R&D isn’t driving growth. If you’re like 95% of firms, you aren’t investing the right amount, and the productivity of your R&D has fallen dramatically over the past several years. That’s because there hasn’t been a universal, uniform, and reliable measure of R&D—until now. First introduced in Anne Marie Knott’s influential Harvard Business Review article, RQTM (Research Quotient) is a revolutionary new tool that measures a company’s R&D capability—its ability to convert investment in R&D into products and services people want to buy or to reduce the cost of producing these. RQ not only tells companies how “smart” they are, it provides a guide for how much they should invest in R&D to ensure that investment will increase revenues, profits, and market value. Armed with insights from her experience as an R&D project manager, 20 years of academic research, and two National Science Foundation grants, Knott devised RQ and used the measure to test common innovation prescriptions across the full spectrum of U.S. companies engaged in R&D. The results are nothing short of game-changing.

Contents

• The Problem: Flying Blind
• Misconception 1: Small Companies Are More Innovative
• Misconception 2: Uncontested Markets Are Good for Innovation
• Misconception 3: Spending More on R&D Increases Innovation
• Misconception 4: Companies Need More Radical Innovation
• Misconception 5: Open Innovation Turbocharges R&D
• Misconception 6: R&D Needs to Be More Relevant
• Misconception 7: Wall Street Rewards Innovation
• The Promise of RQ: Restoring Growth
• Behind RQ: What It Really Is and How to Find Yours