I recently wrote about how difficult it is to measure innovation. But one thing is clear: innovation works—provided it is done in a disciplined way.

There persists this idea that innovation happens inside the head of one genius in the organization whom everybody listens to because their ideas are so consistently brilliant.

Accenture conducted research with nearly 1,100 companies to quantify the bottom-line results that their innovation efforts achieved. And the takeaway for me was: the more disciplined the approach, the better the results.

Firstly, the research identified two mutually exclusive approaches to managing innovation portfolios.

Companies that derive 50% or more of their revenue today from legacy businesses implement a Mature innovation portfolio. Those that generate 50% or more from growth and emerging businesses have a Balanced innovation portfolio.

Companies with a Mature innovation portfolio apply most of their innovation spend to their legacy businesses with the aim of longevity. My favourite example of a mature business is the Mars corporation, the sixth-largest privately held company in the US, according to Forbes. The company manufactures its eponymous Mars Bar, as well as other confectionery and petfood. This is as mature as an industry can get—the company introduced its Snickers bar in 1930 and its Mars bar in 1932.

It is still driven by customer-focused innovation. It acknowledged that people increasingly want a healthy diet. And paradoxically, its customers were also wanting to indulge themselves. In response, Mars introduced a 250 calorie cap on single servings of its confectionery. This is as far away as you can get from re-inventing the confectionery category. But it’s still an important innovation that seeks to balance the needs of new consumers with staying loyal to existing customers.

Our research uncovered 12 “innovation governance rituals”. Astonishingly, our financial analysis showed that the very few companies which employed six or more of these rituals achieved an average compounded annual revenue growth of 5,9% between 2013 and 2018—twice the 2,9% CAGR delivered by companies that governed their innovation more selectively.

That was only 6% of companies, which means 94% of corporates have something to strive for.

Twelve rituals sounds like a lot, but we broke them down into four buckets of three rituals each:

  1. Inspiration, which talks about building a strategy of innovation, communicating it clearly and building an innovation culture.
  2. Ideation, where everybody in the business is encouraged to come up with ideas to improve existing processes or generate ideas for new offerings. Companies also partnered with tech companies to help them come up with ideas.
  3. Experimentation (which I have also written about previously). Successful companies have budgets for gradual experimentation. Companies also use innovation labs or digital factories to test their innovation ideas.
  4. Companies amplify promising innovations with the help of their tech partners, talent partners or their innovation labs.

As with all things, the more focused and disciplined you are, the better the results. It’s just that people seem to think that innovation by its nature is haphazard and spotty.

The lesson from our research into over a thousand companies is that by choosing a portfolio model—Mature or Balanced—and then adopting innovation rituals to support the model, companies can experience industry-leading growth.