The World’s Most In­no­va­tive Com­pa­nies: 4 Things that Dif­fer­en­ti­ate Them

4 Things That Dif­fer­en­ti­ate Them

Rotman Management Magazine - - NEWS - by Michael Rin­gel, An­drew Tay­lor and Hadi Zablit

The world’s best in­no­va­tors draw on speed, lean pro­cesses and tech­nol­ogy to ex­plore ad­ja­cent growth op­por­tu­ni­ties. Here’s how to do it.

The world’s most in­no­va­tive com­pa­nies draw on some com­mon prac­tices to ex­plore growth op­por­tu­ni­ties. Here’s how they do it.

con­tin­ues to rise in im­por­tance: in THE IM­PER­A­TIVE FOR IN­NO­VA­TION The Bos­ton Con­sult­ing Group’s 10th an­nual global sur­vey of the state of in­no­va­tion, 79 per cent of re­spon­dents ranked it as ei­ther their top-most pri­or­ity or a top-three pri­or­ity — the high­est per­cent­age since we be­gan ask­ing the ques­tion in 2005.

At the same time, our re­search in­di­cates that four at­tributes are crit­i­cal to a ro­bust in­no­va­tion strat­egy: • an em­pha­sis on speed; • the use of tech­no­log­i­cal plat­forms; • well-run (and very often lean) R&D pro­cesses; and • the sys­tem­atic ex­plo­ration of ad­ja­cent mar­kets.

In this ar­ti­cle we will take a deep dive into each of th­ese four prac­tices, which are en­abling in­no­va­tion across in­dus­tries, sec­tors and re­gions.

1 AN EM­PHA­SIS ON SPEED Speed en­ables com­pa­nies to catch con­sumer trends as they emerge, leave com­peti­tors flat-footed, and even drive costs down and qual­ity up. In our sur­vey, overly-long de­vel­op­ment times were the most-cited ob­sta­cle to gen­er­at­ing re­turns on in­no­va­tion and prod­uct de­vel­op­ment: 42 per cent of in­no­va­tion ex­ec­u­tives said ‘de­vel­op­ment times are too long’ — a six per­cent­age point in­crease over the 2014 sur­vey.

The same frus­tra­tion was shared by self-de­scribed ‘strong’, ‘aver­age’ and ‘weak’ in­no­va­tors in roughly equal mea­sure — but there, the sim­i­lar­i­ties end. Fast in­no­va­tors are much more likely to also be strong in­no­va­tors — 42 per cent, com­pared with less than 10 per cent of slow in­no­va­tors. Fast in­no­va­tors are also more dis­rup­tive — 27 per cent ver­sus 1.5 per cent. They get new prod­ucts to mar­ket quickly and gen­er­ate more sales from them (at least 30 per cent of rev­enue). This is true for 35 per cent of fast in­no­va­tors, but only 11 per cent of slower ones.

One ex­am­ple of a fast in­no­va­tor from our study is fash­ion re­tailer Zara, part of the In­di­tex Group, the world’s largest ap­parel seller. The typ­i­cal fash­ion re­tailer is or­ga­nized around in­di­vid­ual func­tions to gain scale and cost ad­van­tages; as a re­sult, prod­uct de­vel­op­ment, man­u­fac­tur­ing and de­liv­ery take months. Zara gets new styles to mar­ket in two-to-four weeks. To do so, it uses a cross-func­tional, in­te­grated or­ga­ni­za­tion to ac­cel­er­ate de­ci­sion-mak­ing and elim­i­nate de­lays in func­tional hand­offs.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.