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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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The post Setting yourself apart through Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

The top line news is how companies are seeing innovation transforming their businesses and their need to take a more sophisticated approach to innovation, so as to achieve the growth plans they are setting for the next five years.

PwC are suggesting there is an innovation transformation under-way: “Companies are changing the way they innovate“. They further state that “innovation is becoming a competitive necessity, if it’s not, then executives need to be asking themselves what they could do to improve their innovation process.”

All I am providing here are my initial takeaways from a report I would recommend does provide really good value in working through. It seems innovation is becoming far more the central driver of the organization’s agenda than in the past, where geographical expansion along with mergers and acquisitions were more dominating.

It seems the future focus is far more on leveraging organic growth as organizations view the increasing dynamic and volatile business environment will  intensify and be even more risky but to achieve their growth objectives they will be needing to look beyond the traditional options they have explored so far to-date, through their innovation activity.

Firstly the transforming taking place around innovation

The five key transforming aspects with leading innovators taking a more advanced approach to innovation:

1. Seventy nine per cent of the most innovative companies in their study have well-defined innovation strategies,
2. Top innovators treat innovation just like any other business or management process that can be disciplined and successfully scaled.
3. The leading companies are targeting a higher proportion of breakthrough and radical innovations, particularly around products, services, technology and business models.
4. They are planning a wider range of innovation operating models.
5. They collaborate more than their less innovative peers.

The factors setting the innovation leaders apart

Within the report findings, PwC are suggesting what clearly is setting the leaders apart can be summarized as they:

• innovate with purpose,
• have a well-defined innovation strategy,
• take a more formal and structured approach to innovation,
• are concentrating on a greater proportion of breakthrough and radical innovations,
• are planning a broader range of business model innovation,
• are exploring a wider range of innovation operating models,
• are planning to collaborate much more to generate a greater proportion of revenue from new products and services

The close of the report asks seven great key questions in the role executives do need to play in supporting  the innovation efforts.

1. Are you paying enough attention to innovation? Innovation is quickly moving up the agenda for all businesses, becoming a competitive necessity and the main driver for growth. When was the last time that innovation was discussed at your management board?
2. Do you have an innovation strategy? Innovation needs to be thought of as process which can be disciplined. A coherent innovation strategy aligns all elements of an organisation to its corporate goals. How do you plan to harness innovation to accelerate growth?
3. Is your innovation portfolio right? Innovation portfolios are evolving, including a greater proportion of breakthrough, radical, and non-product innovation and a much broader range of areas to innovate. How well-balanced is your portfolio and where are you prioritising your innovation resources and investments?
4. What is your innovation timespan? Companies too focused on the short-term never challenge existing thinking, while those too focused on the long-term overlook immediate delivery. A balanced perspective is needed. Are you creating the business of tomorrow while running the business of today?
5. Is innovation an integral part of the executive and organisational mindset? Are operational efficiency and innovation metrics part of all management meetings?Are the resources, investments,processes, organisation and governance sufficient to provide the space for innovation to thrive?
6. Do you know how to explore and find the really great innovations that drive unprecedented levels of growth? Is exploration something that people are incentivised to do?Do the innovation processes use leading practices to ensure high speed prototyping, exploration,and learning?
7. Are you an innovation blocker or enabler? Executives too comfortable with the status-quo are one of the greatest barriers to greater innovation. Do you have the mechanisms in place to commercialize and scale your innovations? The last mile of turning innovations into significant revenue growth is often the hardest.

For me, this has been a report well worth working through, so thank you PwC for providing these valuable sets of insights. They offer encouraging news for innovation and its critical role within the current thinking within leading innovating organizations and the changing treatment that innovation is receiving.

This is certainly good news from any innovators perspective and a more than valuable report to put under the noses of the leaders of the organizations that are more within the ‘innovation laggard’ camp.

Those ‘ innovation laggards’ that are  failing to appreciate the changes  that are taking place within innovation practice and recognizing how they can leverage their future growth in broader and significantly different ways. Exploring different, more radical innovation practices, that have the potential for offering a real impact on their future growth potential, far more than the existing ones they are presently undertaking and supporting.

www.pwc.com/innovationsurvey © 2013 PwC. All rights reserved.

The post PwC’s report on breakthrough innovation and growth first appeared on Building Your Innovation & Ecosystem Intelligence.