Innovation – Necessity or Luxury?

There once was a time when most every organization viewed innovation as a priority—something a business must do in order to grow and prosper. In today’s economy, innovation falls into the same category as training and advertising. It’s viewed as something we put on the back burner until better times return.

However, many successful companies view all three areas as areas that are nice to focus on when things are going well but absolute necessities when times are as tough as they are today. I challenge you to truthfully answer the question posed in the final paragraph of this piece. In fact, that question should be posed to and discussed among every member of your leadership team if you hope to keep pace in an environment that includes increasing numbers of customers, competitors, new technologies, and challenges.

Every year, BusinessWeek publishes its list of the 25 most innovative companies based on an annual survey of top executives by Boston Consulting Group (BCG). This past December, BCG sent its 20-question poll to senior executives around the globe. The 2,700 respondents, who answered anonymously, were asked to name corporations that consistently offer inventive products, customer experiences, business models, or processes. The votes of executives who chose their own employers were disqualified.

BCG then factored in the financial performance of the top vote-getters as follows:

Survey results 80%
Stock returns 10%
Three-year revenue 5%
Margin growth 5%

As you can plainly see, this list was not the result of a popularity contest. Listed below are the Top 25 Most Innovative Companies. The entire list of the Top 50 companies can be viewed at www.businessweek.com. A visit to this site will provide you with the ranking, examples of how they achieved those rankings, their stock return, revenue growth, and margin growth.

There are six newcomers this year:

#16, Samsung,
#18, Volkswagen,
#19, McDonalds,
#23, ATT,
#24, Coca-Cola and
#25, Vodafone.

They replaced General Motors, Boeing, Goldman Sachs, 3M, Target, and Facebook which all fell from grace.

Below you’ll find the ranking, the organization, and last year’s rating.

Apple (2008 – #1)
Google (2008 – #2)
Toyota Motor (2008 – #3)
Microsoft (2008 – #5)
Nintendo (2008 – #7)
IBM (2008 – #12)
Hewlett-Packard (2008 – #15)
Research In Motion (2008 – #13)
Nokia (2008 – #10)
Wal-Mart (2008 – #23)
Amazon.com (2008 – #11)
Procter & Gamble (2008 – #8)
Tata (2008 – #6)
Sony (2008 – #9)
Reliance Industries (2008 – #19)
Samsung Electronics (2008 – #26)
General Electric (2008 – #4)
Volkswagen (2008 – NR)
McDonalds (2008 – #30)
BMW (2008 – #14)
Walt Disney (2008 – #14)
Honda Motor (2008 – #16)
AT&T (2008 – #27)
Coca-Cola (2008 – NR)
Vodafone (2008 – #47)

I’m certain you would expect me to endorse training and innovative efforts as I make a living assisting clients to do just that. However, I challenge you to take a second look at those on the above list. Consider their long-standing success, their stock return, their revenue growth, and their margin growth. Note the fact that these productive organizations believe and engage in the pursuit of innovation as a critical strategy in their journey to success in the midst of our current recession and market meltdown.

Again, browse the above list, answer the following question, and take the proper action while you still have the option to do so.

The question you should soon discuss with your leadership team: Do we delay innovative efforts until the dust settles and better times return OR do we initiate, encourage, and support innovative strategies at every level of the organization to survive, improve efficiency, quality, and flexibility to attain the success we seek?

Harry K. Jones is a motivational speaker and consultant for AchieveMax®, Inc., a company of motivational speakers who provide custom-designed seminars, keynote presentations, and consulting services.