My colleague shared this research paper and unlike other past researches where I went straight to the top 50 list, I took time to really understand why these companies made the list. The research was done by the Boston Consulting Group, across America, Europe and Asia. A significant 79% of respondents agreed that innovation remains a top priority for businesses with execs citing 4 critical innovation enablers. It’s no longer about driving the growth agenda, but rather the innovation agenda.
Need for speed
Companies that win must ride on consumer trends, be fast at beating competition and offer value through quality products or services at a lower price. Popularly referred to as fast mover advantage by many scholars, companies must have the agility to take products to market quickly and make sales quickly too. Zara apparel’s case study in the survey is a good example of speed to market. Zara takes 2-4 weeks to get new styles into the market compared to others who take months. In short, REDUCE RESPONSE TIME.
R&D remains critical to innovators with many companies spending billions every year on research and development. The truth is R&D comes with lots of trial, error and failure. This research shows that proper and lean R&D processes can help any company to succeed without being wasteful. The mantra, “Do the work right, and do the right work” sited in the survey, solidifies the need for process improvement by eliminating waste, reducing costs, shortening lead times, improving quality and efficiencies which work to benefit the company. By adopting digital tools, OEM, automotive company reduced the cost of physical testing by 50% in the pre-validation step and another 75% on component costs. Lean innovation methodologies take time but the cost savings and improved efficiencies make it worthwhile
The survey ranks technology as the top most important factor in driving innovation. Companies that have succeed in their innovation use technology tools like analytics to improve decision making, digital technologies to retool manufacturing or mobile capabilities to improve efficiencies. Leveraging on technology brings with it automation, cost reduction, process improvement and business transformation. General Electric’s 3D printing technology for instance, helped reduce the cost of manufacturing ultrasound machines and other areas such as fleet management and customer service. The survey also found out that IT department in these innovative companies are viewed as centers of value rather than support services.
This is sited as the hallmark of innovation leaders. As markets mature and competition increases, most companies experience slowed growth or cannibalization within their own brands. There is therefore need for companies to look beyond the core portfolio in order to open new avenues for revenue streams. Rather than ‘fight’ for a piece of pie in a highly contested and competitive market, companies must look for uncontested new markets that can be explored. Amazon stood out as the company that grew beyond what it is known for, an online bookstore, to just selling about anything, to opening a new stand-alone computer company, the Amazon Web Services (AWS).
I enjoyed this 26 paged survey. You can read the full research paper on the link below and share additional insights to help in accelerating innovation.
References: BGC Most Innovative companies 2015.