Innovation Remains High On Companies Agendas; Report Highlights the Growing Impact of Science and Technology on Innovation
BEIJING —Apple and Google again retain the two top spots in The Boston Consulting Group’s annual survey of the most innovative companies. Tesla Motors accelerated to number three from number seven last year, and Microsoft and Samsung round out the top five.
This year's list is a global group: 29 companies on the list are from the U.S., 11 are from Europe, 10 from Asia, 3 from China and one from India. The companies on the list are a mix of technology companies and traditional ones – in fact, five of the top ten are non-tech companies, the same mix as in BCG’s first survey.
BCG has surveyed more than 1,500 senior innovation executives—across a wide range of countries and industries—ten times since 2004 to cast light on the state of innovation in business. In its new report, The Most Innovative Companies 2015: Four Factors that Differentiate Leaders, the firm reveals the 50 companies that global innovation executives ranked as the most innovative. Four factors fuel success:
Underpinning all of these, science and technology, which can enable new offerings, accelerate development cycles, and disrupt the status quo, is becoming an ever more important driver of innovation.
Speed and Lean: A Powerful Combination
Fast innovators are much more likely to see themselves as strong innovators—42% of innovators reporting a culture of speed rated their organization’s innovation capabilities as strong, compared with less than 10% of slow innovators. Fast innovators also saw themselves as more disruptive—27% versus 1.5%. One reason speed is so important: 42％ percent of respondents cited long development times as a key obstacle to their organizations’ ability to earn a return on its innovation investment. This was the most-cited obstacle in 2015, up six percentage points from 2014 when 36％ mentioned it.
Similarly, Lean practices, originally associated with manufacturing, have gained ground in the less-structured sphere of R&D. Strong innovators are two to three times more likely to adhere to Lean principles than their weak counterparts, according to the BCG survey.
“It takes a deft touch to get processes right in R&D—you need appropriate control, but not so much that you quash creativity, the lifeblood of R&D,” said Michael Ringel, a BCG partner and report coauthor. “It’s all about doing the work right and doing the right work. Doing the work right in R&D involves the same principles that are core to the Lean approach in manufacturing and other domains. But where Lean in R&D departs from these other domains is in doing the right work. There are so many degrees of freedom in R&D, given that it is a learning enterprise, that getting smart about which hunches you track down and which you let go becomes critical.”
The Broad Application of Technology
In this year's survey, advances in technology platforms ranked as the most impactful type of innovation in the medium term, with 50% of executives citing them. More than half of those who see tech platforms and big data as having a big impact have incorporated them into their innovation strategies.
“In most companies, technology used to live in its own silo—the IT department,” said Hadi Zablit, a BCG partner who coauthored the report. “Today, digital, mobile, big data, and other technologies are used to support and enable innovation across the organization, from new-product development to manufacturing to go-to-market strategies in multiple industries. The crux in all cases is the creation of a platform that can be leveraged repeatedly to deliver impact.”
Adjacent Growth: a Hallmark
The report calls out adjacent growth as a hallmark of longstanding innovation leaders. Recurring members of BCG's annual list of the 50 most innovative companies—3M, Amazon, Apple, General Electric, Google, and Procter & Gamble, for example—are skilled in identifying and leveraging new adjacent business ideas that drive revenue.
“As markets mature and competition increases, growth in the core portfolio often slows,” said Andrew Taylor, a BCG partner and report coauthor. “Adjacencies help innovative companies open new avenues for growth through exposure to markets in which they benefit from 100% of the share that they achieve. To be successful, these companies frequently leverage existing capabilities in lean, speed, and technology platforms to enable innovations, whether next door or further afield.”
A copy of the report can be downloaded at www.bcgperspectives.com.
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