Setting yourself apart through Innovation

the-path-to-successBreaking News: “Over the past 15 years, a portfolio of stocks based on the Innovation Leaders analysis has repeatedly outperformed all major indexes. Average return has been 14.5% CAGR and in 2016, growth was 18.9% – significantly higher than S&P500, NASDAQ and FTSE 100.

Year after year, this analysis has proven that those firms identified as being the most effective innovators consistently outperform their peers and the market.”

Now is that surprising?

It should not be but sadly for the vast majority of companies that do not treat innovation as seriously as they should, as the growth enabler, it keeps them in a constantly lagging position. It tells a very powerful message, one of investing in innovation seriously and in sustaining levels, you can grow well above others.

Points from this research

I’ve known Tim Jones for some time. Tim is certainly a recognized leader in innovation, growth and foresight – he has always been helping organizations grow and be ready for the future and does some terrific work.

He is a founder and programme director for different initiatives “housed” under 1) the innovation leaders org,- this is the research programme that identifies the world’s most effective innovators  2) the growth agenda org, – that sets about helping companies build new growth platforms and 3) the future agenda – the world’s largest open foresight initiative explores the key issues facing society over the next decade.

Recently Tim has been  announcing the results of the 2016/17 Innovation Leaders research that identifies the companies which achieve the most from their innovation activities and deliver tangible, sustained growth. Now in its 16th year, this annual analysis profiles the global leaders across 25 different sectors, (click this one to see who) highlighting the shifts taking place and identifying new achievements.

The 2016/7 analysis reveals three notable trends extracted from Tim’s supporting remarks from this recent report:

US Dominance in leading innovators

“After greater European and Asian presence over the past decade, this year 20 of the 25 leaders are US based organizations. This is the highest single country concentration since the research began in 2001 and reflects both the continued global dominance of the West Coast as a centre of innovation and its impact on other sectors across the country, some of which previously had a greater focus on M&A driven growth.

The remaining leading innovators are based in Denmark, Korea, Germany, Spain and the UK. The drop in European presence on the list, down 50% within a couple of years, should be raising some hard questions about the future of innovation across Europe”

My thoughts here: For me this does raise real concerns on innovation across Europe. It consistently is lagging and seemingly not catching up as it does not have all the levers to become more dynamic in growth as we are seeing in the tepid economic growth conditions seen in most European countries.

Partnerships at the Fore – the trend critical to finding new growth

“Although effective collaboration has been a key component of successful innovation for some sectors for some time, it is clear that, today, this is increasingly influential across the board. Organisation’s such as Accenture and Cisco and KT Corporation have positioned themselves specifically to help to drive customer innovation; companies like Adidas, Delta and LEGO are using partnerships to maximise brand impact; and firms including Boston Scientific, Dow Chemical and Lilly are all focused on collaboration across their respective ecosystems. Irrespective of sector, deeper partnership-driven innovation is very much at the fore. This does not suggest that the days of ‘going it alone’ are over, but highlights how, in an ever more interconnected world, delivering high impact change requires new alliances”.

My thoughts here: This is why I believe the power of platforms and working in ecosystems is certainly one of the key ways forward to “innovate for growth”

Big Bets

“While some companies such as FedEx, Inditex, PepsiCo and Reckitt Benckiser, continue to focus on delivering consistent incremental innovation, more radical breakthrough approaches are core to several organisations’ growth strategies. It is clear from both new product launches and underlying patent activity. Alongside Alphabet’s significant ‘Other Bets’ activities, Amazon’s strong moves into AI and Apple’s major R&D investments, others are also raising the stakes. Whether this is Bank of America’s proactive positioning on block-chain, Humana’s investments in digital, LEGO’s movie partnerships or Nvidia’s expansion from gaming into automotive, more established companies seem willing to explore and support a number of major intelligent future growth investments: Tesla’s bold moves continue to capture many headlines but others are not holding back”.

My thoughts here: The radical / transformation bets are beginning to take hold. More companies worried over their poor growth track records are looking to find “growth pathways” but struggle to find the ways to do this as they have failed to make the necessary, sustaining innovation capacity building investments.

About the Innovation Leaders Analysis

In order to gain an insightful and validated perspective on the true innovation leaders on a sector-by-sector basis, the annual Innovation Leaders analysis assesses the performance of 1,500 of the world’s top companies against a number of specific key parameters.

The individual innovation and growth performance of the top companies within each sector are compared against each other and additional research around the differences between the leading organisations is undertaken to ensure that the perspectives gained are fully up to date. This provides what we believe to be the most accurate picture of the companies that are the most effective innovators in each sector, and allows us to highlight the respective key competitive strengths.

The eight areas that we research and input into the assessments across different sectors are:

1      Organisational culture and supporting structure;

2      Strategic focus on innovation driving corporate growth;

3      New product launches and relative success ratios;

4      Growth in revenues, profits and market capitalisation;

5      Average revenue and margin per product or customer;

6      Investment in activities such as R&D and marketing;

7      Brand value and human capital growth; and

8      Peer review from within the sector.

For more information on this research please contact research@innovationleaders.org or to view the recent presentations.

So here is a link to the results of the 2016/17 Innovation Leaders research that identifies the companies and a link to their new website

I’d recommend exploring this as I picked this up on from Tim’s LinkedIn post, as it was only published today, 5th March 2017, and where I have drawn most of this ‘informing’ post.

Essential read for those wanting to build the business case for innovation and see who is leading in innovation and growth returns from their focus on this.

 

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