Learn how BCG helped an industrial-equipment manufacturer increase growth by capitalizing on breakthrough innovation.
EquipmentCo is a multibillion-dollar capital-equipment manufacturer with the leading global-market share in its core business lines. This company has been very good at incremental innovation and has introduced many product innovations to the market. Also, it has robust processes for all aspects of innovation required to sustain its position in the market.
However, it had been struggling to develop truly “game-changing” or “new-to-the-world” innovations and bring them to market. Given its strong market share, EquipmentCo’s CEO was concerned that future growth might slow if the company failed to build its capability to generate breakthrough innovations— and capitalize on them once they were launched.
BCG was asked to help develop and implement a holistic approach (including processes, organization and governance, tools, and capabilities) to creating breakthrough innovation and increasing growth.
The BCG team conducted a "rapid innovation diagnostic" to identify the root causes of EquipmentCo’s inability to drive breakthrough innovation.
This effort included four key elements:
Almost 200 surveys, which were compared against BCG's proprietary innovation-benchmarking database
A detailed analysis of the client's existing processes and practices versus best practices
A structured set of workshops and sessions was used to build awareness and consensus within the executive committee.
First, we developed an entirely new process and a set of supporting enablers to utilize both internal and external strategic sources to identify innovation opportunities.
Next, we developed, installed, and piloted a complete and fully documented process to allow these ideas to be handled properly.
A new governance structure was implemented to review, prioritize, and fund these breakthrough innovation projects.
The final process, including the governance structure, was designed to work in conjunction with existing successful processes.
Within one year of BCG outlining EquipmentCo's new breakthrough innovation process, many advances were made.
Senior leadership fully bought into the process:
The CEO changed the compensation system to support the new process
Business-unit leaders were building the new process into their systems
An additional $25 million in funding had been allocated to the new process
This buy-in led to six breakthrough innovation projects in the new process and an additional 15 upcoming projects.
EquipmentCo calculated an expected incremental value of $500 million from the first six new projects.