Innovation with Annalisa Gigante | InvestED Podcast

TL;DR

As an outside investor, understanding a company's innovation ecosystem involves examining their output, particularly in terms of new solutions, products, and services they have developed and brought to market.

Transcript

how can we as outside investors as people really just having access to the annual reports and the information online and business and investing journalism and interviews that company leaders give how can we get a sense of that ecosystem what stuff do you look at when you're learning about companies that you're not involved in so i look at output ra... Read More

Key Insights

• 👶 Examining a company's output, particularly in terms of new solutions and products, can provide valuable information about their innovation capabilities.
• 🏁 Transparency in a company's innovation pipeline and milestones, similar to the pharma industry, can create upticks in market capitalization.
• 👣 Tracking innovation progress can help outside investors make informed decisions and assess a company's potential for future growth.
• 💄 Making companies accountable for reaching innovation milestones can contribute to their ability to reinvest in innovation more quickly.
• 💯 Innovation can be categorized based on timeline (horizon 1, 2, and 3) and the proximity to a company's core business.
• ☄️ Disruptive innovation often comes from external sources, such as startups, while incremental innovation focuses on improving existing processes.
• 🥺 Clay Christensen's quote highlights the difference between disruptive innovation, which creates jobs, and efficiency-focused innovation, which can lead to job losses.

Questions & Answers

Q: How can outside investors assess a company's innovation ecosystem without direct involvement?

Outside investors can gain insights by examining a company's output, particularly in terms of new solutions and products they have developed and brought to market. This information can be found in annual reports, online information, and business and investing journalism.

Q: What is the importance of tracking a company's ability to bring new solutions to market?

Tracking a company's ability to innovate and bring new solutions to market can provide insight into their effectiveness and competitiveness. Companies that consistently demonstrate innovation and successful commercialization of ideas are more likely to create value for investors.

Q: Is it important for companies to make themselves accountable for innovation milestones?

Yes, accountability for reaching innovation milestones is crucial for companies. It allows investors to assess a company's progress, builds trust, and can create an uptick in market capitalization that contributes to funding future innovation.

Q: How can companies learn from failures and use them to inform future innovation?

Companies that openly acknowledge and share the lessons learned from failed projects demonstrate a culture of learning and continuous improvement. By analyzing failures, companies can identify areas for improvement and guide future innovation efforts.

Summary & Key Takeaways

• Outside investors can gain insight into a company's innovation ecosystem by focusing on their output rather than just their research and development spending.

• Tracking a company's ability to come up with new solutions, test them in different markets, and bring them to scale can provide valuable information about their innovation capabilities.

• The pharma industry sets a good example by making its pipeline and milestones transparent, which allows investors to anticipate stock price changes based on innovation progress.