Two lifelong innovators, Will Cornock and Kes Sampanthar, sat down for a wide-ranging conversation covering everything from the meaning of innovation in the enterprise to emerging market opportunities, the role of Purpose in innovation, and future innovation trends. Cornock co-authors BCG’s Most Innovative Companies Report and Sampanthar leads innovation for BCG BrightHouse.

Kes Sampanthar: Let’s kick it off: How are you thinking about innovation? What does innovation mean to you? 

Will Cornock: Innovation can mean many different things to many different companies, sometimes even the very same company! Most broadly, innovation is how you think about renewal and growth. It’s about how we translate an idea or concept into something that creates value for our clients, end consumers, and society. How do you translate the idea or a concept into something that’s creating value, not only for the enterprise, but more also for its consumers and downstream for society. One of my first interactions as a new employee at 3M was hearing the company share their philosophy on innovation. It’s more than just the creation or invention of something new. It’s finding unique and intriguing combinations of things that exist in the world to solve problems, and I found that that was both aspirational as well as very accessible. 

I think too often innovation is linked to this idea of lightning in a bottle. It has this mystique, but it is the aspects of repeatability and measurability, making it systematically deployable, that are often overlooked.

[Innovation is] more than just the creation or invention of something new. It’s finding unique and intriguing combinations of things that exist in the world to solve problems.

Kes Sampanthar: And why is innovation critical to our clients? What are some of the trends you’re seeing? 

Will Cornock: Innovation is this beautiful intersection of creativity and science that makes it quite exciting and impactful. We’ve empirically proven that great innovators are those that realize greater returns in the marketplace, and innovation is that ignition factor for growth and reinvention. Innovation is the continual and repeatable ability to generate growth that drives an outside share of a sustained shareholder return. 

What you see over the course of our extended Most Innovative Companies study is that innovation leads to outsized return. Importantly, you see that outperformance in times of downturn — innovative companies are less impacted and have a faster recovery relative to non-innovators. Companies investing in finding new solutions and offerings are driving continual growth. 

Kes Sampanthar, Managing Director, BCG BrightHouse

Kes Sampanthar: Thinking about downturns over the last 12 years, I’ve seen a shift in how leaders think about investment into innovation. In 2008, companies that invested into the curve were more successful than those that were left flat-footed. By the time 2020 hit, we heard seasoned leaders say, “We’ve been through this very recently, I’m not going to go back to austerity or cutbacks.” 

At the same time, there is the concept of ambition, which is typically what executive teams look at when outlining expectations for innovation leaders. They invest in innovation because they expect leaders to drive X number of dollars. 

What is your perspective on innovation mandates? Have you heard of a change in what innovation leaders are working towards? 

Will Cornock: Sometimes having that mandate is fantastic but it’s rare, and other times there’s an unarticulated expectation of delivering growth without any clarity. Having clarity is what differentiates teams who know what great innovation is and those that don’t, because they know what the end state is and what success looks like. Any company with a clear vision of their ambition has clarity, which then allows for a frank discussion of whether innovation is going to deliver impact, or if not, what needs to change? 

As we study setting these ambitions, we find a tension between the mystical side of innovation, and having clarity and transparency. 

Sometimes the motivation to invest in innovation comes from a desire to de-risk our future.

Kes Sampanthar: I’ve noticed that innovation growth targets are not always connected to the organization’s Purpose. I’ve had clients that have been asked to come up with the next billion-dollar idea by their boards, with no tie to an underlying vision, strategy, or Purpose. 

Sometimes the motivation to invest in innovation comes from a desire to de-risk our future. Investors think, “I invest in innovation and in your team because I don’t want to be caught flat-footed. When our customers are looking for something new, I don’t want them to go to the competitor.” 

Do you think that innovation leaders are given the right tools to be able to meet those mandates, and do they need a financial target to get clarity?

Will Cornock: Once you have clarity, you can then form a compelling strategy and plan. While longer-term projections are never going to be perfect, that clarity enables the strategy to better cascade to the plan and its execution. 

Will Cornock, Partner, Boston Consulting Group

During downturn environments, a lot of the great innovators focus on thinking about innovation as a capability. This thinking drives the decision on whether to pull back on this capability, knowing that down the line they will then have to reinvest, more likely at an outsized pace, to rebuild that capability. That’s important, but it’s an inside-out, enterprise-first lens. Understanding the changing customer is the other lens that’s great at recognizing the volatile environment. Shifts in customer demand resets some equilibriums, and innovators with an outside-in, customer-first lens are going to be more successful. 

Great innovators view these opportunity spaces as investments rather than costs; that’s an important mindset shift. In downturn environments, a lot of folks think, “What do I need to do to keep the lights on?” but great innovators are also thinking about “How do I help my customer keep their lights on?”

Kes Sampanthar: 20 years ago, innovation was code for R&D; the new-new thing was focused on technology and products. Today, there is a sophisticated view of innovation, thinking about Moore’s law as a business expectation, not just through a technology lens. 

The reality is that innovation in general has become a business expectation, driving faster and faster cycles. We are moving from a tech-only lens and realizing the opportunity spaces that open as demographics and customer needs shift. In the past, the ask would have been, “Let’s come up with a new technology,” and we would have come up with the next version 1.2 or 3 to “add the extra blade” to the product, assuming we understood what customers want. I used a design thinking and human-centered approach to find those unmet needs. 

How do you think about these shifts and expectations? 

Will Cornock: A lot of tech players have been at the forefront of opening people’s minds to what’s possible, and many of the new innovations have given people new tools to redefine the “art of the possible.” 

We’re seeing that happening more and at an increasing rate today with the speed at which folks are embracing advanced analytics and AI and incorporating those throughout their innovation systems. There’s a compounding effect: the tools are driving better innovations, which then improve the technology, and so forth.

Kes Sampanthar: The idea of the playing field and rules of the game seems to have shifted. Roger Martin suggested this idea of where to play and how to win in his book Playing to Win. Then, platform business models suddenly made you invest differently. Amazon played a very different game to traditional bookstores, and suggested a different way to do e-commerce: to expand in adjacent industries and segments of your customer’s lives. Most people would look at that and initially think about the 80’s conglomerate nightmares. This time, we realized that holistically understanding your customers allowed you to anticipate what customers wanted. The data they got from all these different adjacencies fed their core business. In that frame, innovation becomes not just a technology, not just a service, but potentially a business model change. 

When you think about Purpose or the idea of creating a whole new business model, you have to ask, “Is this in line with the business we are in?” Sometimes it is, and you start getting synergies, and other times it just seems to be just another revenue stream and you’re playing the roulette game. 

Will Cornock: Those business model innovations massively disrupted current models and opened the eyes of other players, in terms of the ways they can think about monetization and operations. Having clarity on Purpose, your “North Star,” is likely one of the few variables that you can draw on as the enterprise pivots. 

In a world where ownable, long-term advantages are harder to secure, Purpose is one of the things that becomes that connective tissue between the business and other components of the company. Having a Purpose also connects you to the culture of reinvention. If there’s a company that proves that they embrace their Purpose consistently, you’d have to believe that they’re going to be successful, because that Purpose is something they’re inspired to capture. 

Kes Sampanthar: To wrap up, let’s talk a bit about how you are thinking about 2023. While everybody was talking about recession, we’re seeing a major shift with investment dollars moving in the direction of generative AI. What do you see for 2023? 

Having a Purpose also connects you to the culture of reinvention. If there’s a company that proves that they embrace their Purpose consistently, you’d have to believe that they’re going to be successful, because that Purpose is something they’re inspired to capture. 

Will Cornock: I think both those topics are at the forefront of discussion. Overall, innovation’s pace remains a top priority. There’s a subcomponent of companies that are increasing their innovation investments and see this as an environment for opportunity. 

I looked back on past recessions, and reflected on the fact that a lot of the [tech] players we take for granted today had their start during that time. The idea of Airbnb was born out of people not being able to feel their Purpose of exploration, travel, and human connection. That let Airbnb come together. 

Looking into 2023, first, there are going to be folks that are going to invest in new and shifting needs, and I think that thereare going to be outsized gains that come out of it. I think our next wave of innovators are going to emerge when other folks don’t take that approach and leave themselves open to disruption. Lastly, as you pointed out, there will be the massive embrace of AI and advanced tech that will change how we innovate — and how fast.

Kes Sampanthar is a globally recognized innovator at the intersection of human experience and technology. He spearheads BCG Brighthouse’s Purpose-driven innovation practice. His career spans three decades through the worlds of technology, business, and innovation strategy. He is an award-winning innovator, whose research has been honored and cited by Gartner and Forrester. Recognized as a strategic leader, Kes has spearheaded digital transformation projects for some of the biggest names in government and the FORTUNE 50. 

Will Cornock is a core member of BCG’s Consumer Goods, Corporate Finance & Strategy, and Marketing, Sales & Pricing practices. He partners with consumer-facing companies of all sizes on growth strategy, innovation strategy and enablement, M&A, and transformation initiatives. Will is a co-author of BCG’s Most Innovative Companies Report. His innovation experience includes setting innovation strategies, unearthing customer and consumer insights to spur new offering creation and development, and upgrading innovation systems to maximize ROI.