The term “innovation” is often associated with geniuses turning startups into gold mines — the next Google, Apple, or Amazon, with products no one even knew they needed. Private equity firms place hundreds of little bets on these startups, hoping one produces a windfall that covers the rest. These bets on the next growth engine often depend on luck more than insight.
Meanwhile, every company aspires to be as innovative as these startups. Many companies invest in or buy them, unsure what they’ll yield other than the halo effect they may overpay for, made worse by the fact that most don’t align with the company strategy or meet a market insight. The same is true of ideas: Knowing which to fund without making random bets is key. But according to a series of three surveys conducted over six years by Maddock Douglas, the consulting firm where I work, while 80% of