THE past 30 years have seen a succession of new companies capture enormous shares of the revenue and profit in their markets, usually at the expense of large established businesses. Faced with the threat of similar disruptions, many big companies are eager to come up with products and services that customers can't resist, and operational advances that deliver breakthrough performance improvements. Some are pouring money into in-house venture capital funds, design-thinking labs, innovation competitions, and other mechanisms for conceiving their next great idea.

Such efforts do help - up to a point. Results vary from one company to the next, but many of the executives I've spoken with have told me that their investments in dedicated innovation groups have only yielded modest returns. And few if any of these groups have catalysed a broader shift toward organisational systems, structures, and cultural traits that support innovation. From my standpoint, it sounds as though more comprehensive innovation programmes are needed.

This isn't just my personal view. It's backed up by research, including research by my colleagues at McKinsey. What's apparent is that a strong business idea only stands a chance of yielding returns when a company also has the organisational and strategic features needed to turn ideas into business propositions. My McKinsey colleagues have described those features as the eight essentials of innovation. I've spent a lot of time discussing these essentials with CEOs during the past year, and sooner or later the same question comes up: I know what the eight essentials are, but how can I make my company into an innovation powerhouse?