How Innovation Really Works: Using the Trillion-Dollar R&D Fix to Drive Growth

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THE PROMISE OF RQ: Restoring Growth

In Chapter 4 we learned that RQ is immediately useful to companies in determining more optimal R&D budgets. There is also a greater, though longer-term, promise of RQ—that companies can improve their R&D capability and restore their earlier growth. Just as TQM helped companies improve manufacturing efficiency, hospital report cards helped hospitals improve morbidity and mortality, and sabermetrics helped teams improve recruiting and ultimately player skills, the promise of RQ is that it can help companies improve their innovation capability.

This of course is only possible if RQ can change. The key question then is “Can it?” We know from Chapter 1 that RQ can change in the wrong direction (the 65 percent ...