A couple of days ago I got the latest issue of Fast Company. The headline story is the 50 most innovative companies. Top of the list: Nike, Amazon, & Square. I also happened to be looking at BCG’s latest report on most innovative companies. Apple, Google, & Samsung top that list. I checked out Insead’s most recent list of innovators (done in collaboration with Forbes). Their top 3: Salesforce, Alexion Pharmaceuticals, & Amazon. And for Booz, the innovation leaders are Toyota, Novartis, and Roche Holding.
Looking at the top 20 companies on each list, the only duplicates were as follows:
- Amazon & Samsung are each in the top 20 on 3 lists
- Apple, Coca-Cola, Google, IBM, Intel, Microsoft, and Toyota are each on 2 of the top 20 lists
Why such divergence? It has do to with how each rating organization determines degree of innovativeness. Fast Company focuses on which companies had the greatest impact on the business environment or the user base. BCG surveys a large global pool of executives, asking them which companies they perceive to be most innovative. The Insead/Forbes team looks at the innovation premium- how much better a company performs compared to other firms in the same industry based on innovation. And Booz starts with companies that spend a lot on R&D but then ranks them on other characteristics that impact the return on that innovation investment.
What we can learn from studying the companies that show up on these lists is that regardless of the approach used to create the ratings, the companies do have some characteristics in common:
- More innovative companies enjoy higher TSR (Total Shareholder Returns) than comparison companies in the same industry that are not considered to be innovative
- They have cultures and/or leadership that support innovation
- They each have some processes to stimulate and capture innovations
What else do you think we can learn?