What Turns Companies Into World-Class Innovators?

By Dennis McCafferty | Posted 2016-03-01

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What Turns Companies Into World-Class Innovators?

Innovative firms like the 10 listed here aren't afraid to accept failure, approach innovation in a systemic manner and staff their projects with proven managers.
The Five Most Innovative Companies

1. Apple, 2. Google, 3. Tesla Motors, 4. Microsoft, 5. Samsung
The Next Five Most Innovative Companies

6. Toyota, 7. BMW, 8. Gilead Sciences, 9. Amazon, 10. Daimler
Urgent Initiative

79% of the global executives surveyed consider innovation as a top-three strategic priority, with 22% reporting that it's the highest priority.
Slow Process

42% said lengthy development times present major obstacles to generating returns on innovation—up from 36% in 2014.
Tough Choices

32% of respondents said coming up with the right ideas to commercialize creates significant hurdles in attempting to generate returns on innovation¬—up from 30% in 2014.
Safe … and Sorry

31% indicate that a risk-averse culture presents considerable obstacles in generating returns on innovation—up from 25% in 2014.
Undisciplined and Uninspired

25% cited a lack of coordination as a top obstacle to generating returns on innovation, and 22% said there are "not enough great ideas." (Both percents are roughly the same as those in 2014.)
Intelligent Plan

85% of respondents who work for firms considered "strong" innovators came up with what's described as an intelligent launch plan, compared with just 30% of those at "weak" innovator businesses.
Defined Specs

83% at "strong" innovator companies said their organization has defined product specifications, but only 43% of those at "weak" innovator businesses made the same claim.
Being Human

80% of respondents at "strong" innovator companies said their organization accepts failure, while only 36% of those at "weak" innovators said that's true at their business.
In Good Hands

79% of the executives at "strong" innovator companies said they have strong project management, but just 37% of those at "weak" innovators said the same.
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Did you ever carefully consider what separates the greatest innovative companies from the also-rans? A key differentiator is that organizations that can claim elite status aren't afraid to accept failure, according to a recent survey from the Boston Consulting Group (BCG). These companies also frequently approach innovation in a systemic manner, coming up with "intelligent" launch plans and defined product specifications. It's also essential to staff projects with proven, strong managers. With this, organizations can overcome common innovation barriers, which include lengthy development times, a risk-adverse corporate culture and a lack of great ideas, findings reveal. The growing significance of innovation within business strategies has also redefined the role of technology, with the IT department acquiring a broader, more impactful presence organization-wide. "In most companies, technology used to live in its own silo—the IT department," according to 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. … Innovation is one of a handful of growth strategies that companies employ. At a few companies, it's the primary strategy." The research also includes a ranked listing of the 50 most innovative companies, and we've highlighted the top 10 here. Approximately 1,500 global executives took part in the research.

Dennis McCafferty is a freelance writer for Baseline Magazine.