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What is innovation? It’s easier to ask: what is innovation not? Innovation is not invention. It’s not restricted to R&D departments. And it’s not easy to measure or operationalize.
Most companies fail to account for four-fifths of their innovation spending. They may be overlooking spending in digitization, customer experience, branding, and internal innovation networks—intangible assets, and tough for accounting to assess, as our research shows.
When companies underestimate their innovation spend, they tend to focus on activities that deliver short-term rather than long-term and strategic results. That’s a mistake amid tightening labor markets. Now is the time for companies to focus on underendowed areas such as organization practice, work design, human capital competency, and resource use. Human capital analytics professionals, can you measure that?