By | Dr Pavan Soni | IIM-B Innovation Evangelist
Here’s the list of the world’s most innovative companies, as compiled by the Boston Consulting Group over past several years. You can refer to the latest ranking here. The ranking takes into account the peer reputation of being innovative, stock market performance and accounting measure of growth. What’s interesting is however to see the pattern.
Let me break the list down into the companies which have remained consistent, and those which have lost out on the ranking.
The seven companies which have consistently being ranked as the most innovative ones are Apple, Google, Microsoft, IBM, Toyota, General Electric and Amazon. If you look at the past decade of performance at each of these companies, you would identify some common factors. Let me highlight a few of them:
- Disrupting multiple industries. Both Apple and Amazon disrupted more than a few industries in their course of growth and global dominance. These weren’t just neat technologies, but also radical new business models. Microsoft, with the acquisition of Nokia, is set to have a dominant presence in the mobility market, alongside it’s strong hold on the personal computing business.
- Stable leadership. Little doubt that if innovation is a matter of culture, culture is set right at the top of the firm. Stable leadership at Google, IBM, Amazon and General Electric has been instrumental in seeing the transition from a insular culture to a more open one. If innovation calls for taking risk, the man at the top has to be sure that his job isn’t jeopardizes while taking risks.
Now let’s look at the list of firms that lost out on the run.
The story of 3M, P&G, Nokia and Sony has been that of inability to find the next growth engine. P&G did experiment with Open Innovation, but could not really translate that into creating disruptive products for new markets. Samsung, on the other hand, has been a fast follower, and now a leader in many markets, has proven Michael Porter wrong. This is one company that takes a cost-leadership approach while being differentiated in the marketplace. A must read HBR case on this paradox.
The insight is – kill your own products before someone else does.