Most
Innovative Companies
In
the past, few companies which were declared as most innovative, collapsed in
the next few years and its leaders were marched to the prison (e.g. Enron.) The
criteria being used to evaluate the innovativeness of a company was very narrow
– R & D budget, patents, financial performance, innovation premium etc.
Cases like Enron show that the criteria used are incomplete and needed for a
relook.
Robert
Tuckers, Founder – President of the Innovation Resource Consulting Group,
California, proposes additional criteria like – visionary leadership,
innovation culture, customer delight, reputation, unique business model,
sustainability etc. are also to be included along with the subjectivity being
used. Accordingly compiled is the list of companies considered as most
innovative and their unique practices are described.
1 Alibaba:
The
founder, Jack Ma was told repeatedly “e-commerce will never work in China,
people here simply do not trust the internet.” But Ma’s vision pressed ahead
anyway, and today Alibaba sells twice as much merchandise as Amazon, and eight
per cent of everything sold in China. Alibaba is often described as E-Bay,
Google, and Amazon combined. To build trust with Chinese consumers, Ma created
Alipay (similar to PayPal), and adopted a liberal returns policy to fulfil its
mission “to make it easy to do business anywhere.” Alibaba’s priorities:
customers first, employees second, and shareholders third.
2 Nike:
Own 92 per cent
of the basketball shoe market, and over 50 per cent of the running shoe market,
and they still acts like a hungry start up. Their “category offense” strategy
calls for growth not just from selling more shoes or apparel, but by dominating
entire sports: football, soccer, golf or tennis. Through their website,
customers can design their own shoes in extreme detail, right down to the
colour of the eyelets. While innovation is everybody’s responsibility at Nike,
the company’s Innovation Kitchen is where scientists cook up game-changing
concepts like ‘Flyknit’ Racers, feather-light shoes that feel “like a sock atop
a sole.”
3 Tesla:
Tesla
Motors encourage other auto manufacturers to adopt Tesla’s patents(!) in order
to build electric vehicles faster into a mass market. While other car companies
sell through dealers, Tesla sells through its own showrooms in shopping malls
to build a direct relationship with customers. All software used in its
vehicles is developed in-house, a model closer to Apple, than to conventional
automakers. Such bold moves exemplify how Tesla is rethinking the car business
from top to bottom. The fastest way to lose an argument at Tesla is to say
“such and such [auto] company does it this way,” according to insiders. (It is
always ‘Do what others have not
done.’) Not failing often or fast enough gets noticed in this
hard-charging culture. “If things are not failing, you are not innovating
enough.”
4 Uber:
They
completely overturned the taxi-transportation business in 270 cities worldwide.
And they kept away regulators and “me too” competitors using software, lawyers
and guts, instead of fleets and hoards of dispatchers required by the
traditional industry. They believe, ‘Short term war is a great way to inspire
innovation.’ Customers love being able to summon a car with the touch of a
smartphone app. But they are conflicted about Uber’s varying pricing, which
increases up in periods of high demand. (Uber is banned in India!)
5 Google:
A
Google engineer, planning a trip to Spain found he could not get a close up
view of the hotel he was to stay in since the road was too narrow for the
StreetView car to photograph. Rather than shrug that it was “not my job,” the
engineer used Google’s famous 20 per cent free time policy to create the Google
Tricycle to film narrow lanes. Such action at the grass root level, no doubt,
shows ‘innovation in every realm’ is every ones business in Google. Innovations
emerging from GoogleX, the search giant’s secretive skunk works lab, include
the now famous driverless cars, Google Glass, and a plethora of less well known
projects. Examples: blood glucose monitoring contact lenses and eatable
“painted” nanoparticles that conceivably will bind to cancer cells and other
biomarkers in the body and allow scientists to “read” what they find.
6 GE:
GE
welcomes outsiders with new skillsets. They have made innovation a more
systematic, embedded discipline. GE’s latest iteration is called FastWorks.
Bringing the Lean Startup movement in-house, its purpose is to decrease time to
market, lower the cost of building new products, and involve the customer early
and often. Each business unit has a “growth board,” which meets to allocate
resources in house potential projects.
7 IBM:
During
the mid-2000’s, IBM invited thousands of employees, clients, consultants and
even employees’ family members to brainstorm new uses for company’s
technologies. At the time it seemed like a PR move, but little more. Yet out of
these sessions came IBM’s game-changing Smarter Planet initiative, as well as
Watson, the artificially intelligent computer system capable of answering
questions posed in natural language. Good thing it crammed, as revenue and
profit growth have been flat in recent years despite great effort. IBM’s
challenge is clear: with the rise of cloud computing, corporate clients can
largely do away with expensive data centres, and rent server capacity and
processing power for far less than IBM charges to hire its consultants to run
everything in house. CEO Ginny Rometty is pushing the troops to create new
demand in Big Data, analytics and Watson.
The company is starting to make headway:
IBM’s overall cloud client base doubled in the past year, and Watson is
starting to gain traction.
8 Apple:
The
iPhone 6 model’s revenue now accounts for more than half of the company’s gross
revenue and the bulk of its profit. Most important of all, CEO Tim Cook proved
in 2014 that Apple without Steve Jobs can carry on with innovation, and keep
the culture he spawned intact. Steve established a set of values and Cook
established preoccupations and tones that are completely enduring. Chief among
them is a reliance on small creative teams whose membership remains intact to
this day. Unlike Google and Facebook, Apple sells hardware and software, and
has disrupted at least eight industries. With its new Apple Pay service, and
the soon to be released Apple Watch, the future looks bright. Apple watch
features a fitness tracker, wireless payment functionality, text messaging, and
inductive charging beneath a touchscreen display.
9 Procter & Gamble:
The
company pioneered Open Innovation, and connected with outside sources for new
ideas. It set innovation stretch goals for every division and department and A
G Lafley made innovation everybody’s business. His successor wasn’t able to
keep up the momentum and a year ago, Lafley was brought back to rework his
magic. But instead of focusing on innovation, Lafley has placed an emphasis on
“restoring focus”, selling off scores of under-performing P&G brands, from
Duracell batteries to Folgers coffee.
10 3M:
If you’ve ever wondered where a lot of the ideas on
innovation management and innovation culture came from, one source is 3M. In
contrast to Amazon, which seems to be trying to innovate everywhere (but can’t
seem to make money anywhere), or even Tesla, which has yet to break even, 3M
keeps churning out new products – and steady growth and profits. Example: the
15 Per cent Rule, now used at Google, where it became the 20 Per cent Rule. 3M
employees were given 15 per cent discretionary time to create whatever they
want. If an employee believes they have a worthy creation, they inject it into
the firm’s “champion” new product development system, and the idea receives a
fair hearing and resources. The famous Post-it Note came out of this process.
Ditto the innovation metric that 3M pioneered decades ago called the Thirty Per
cent Rule (30 per cent of each division’s revenues must come from products
introduced in the last four years. *
FROM CS 94 APRIL 2015
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