Corporate Performance and Technological Change Through Investor's Eyes

OVERVIEW:A McKinsey & Company study of corporate performance reveals that even the best-run and most widely admired companies have been unable to sustain their market-beating performance over the long term. Eight key insights from this study of more than 2,500 companies are discussed, including that R&D spending does not correlate with shareholder returns in any simple way. R&D leaders should learn from this that while there may be periods when companies and industries display extraordinary performance, these periods always end. R&D management—who are at the very center of creation—must look hard at spending, particularly when others are cutting back. Many of today's industry leaders actually increased their R&D spending during the 1990-91 recession.