Harnessing Imagination to Drive Innovation

March 15, 2024 | 3:42 pm

Six steps to systematize creative thinking — and ultimately drive growth.

March src4, 2024

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The decay of rules-based trade means that companies can no longer find growth as easily by expanding to new locations, or expanding demand through low-cost single point sourcing. In this context, companies seeking growth must develop innovative offerings to expand demand. These offerings are, essentially, products of imagination — conceiving of and realizing new possibilities — a challenge that companies struggle with. In this article, the authors present a six step-cycle that is at the foundation of a corporate “imagination machine.”

Growth is critical to long-term value creation: Our analysis of the total shareholder return (TSR) of over 2,000 large companies reveals that over a five-year period more than half of it can be attributed to sales growth — with investor expectations, cost reductions, and changes in operating margin making up the rest. Over a src0-year horizon, nearly three-quarters of TSR are driven by sales growth.

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Martin Reeves is the chairman of Boston Consulting Group’s BCG Henderson Institute in San Francisco and a coauthor of The Imagination Machine (Harvard Business Review Press, 202src).

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Adam Job is the director of the Strategy Lab at the BCG Henderson Institute.