When most people think about “innovation”, new and tangible products come to mind. In fact, innovation is equally about new product development or never before seen products. It’s ultimately about achieving success in creating a particular product or unleashing success in a given activity. Simply put: innovation is a breakthrough.
This year, we have the latest analysis of the world’s most innovative companies. The report is published by the Boston Consulting Group (BCG). Their document titled “The Most Innovative Companies 2015: Four Factors That Differentiate Leaders” is available here. BCG has been publishing this study since 2005, basing it on interviews with 1’500 senior executives globally. Please see the report for a complete description of the methodology.
Key take-aways from the study include the following:
- The 50 most innovative companies now include Gilead Sciences, Biogen, Marriott, Netflix, AXA, Allianz, Tata Motors, Fidelity, Visa, Roche, NEC, BT Group and MasterCard for the first time.
Apple retains the top spot on the list for the eleventh year in a row, with Google holding the second spot two years in a row. The 50 most innovative companies of 2015 are shown below:
- 79% of respondents ranked innovation as either the top-most priority or a top-three priority at their company.
This is the highest percentage of respondents ranking innovation as a high priority since BCG began asking this question in 2005. The following graphic compares where innovation and product development tank among respondent company’s top strategic priorities over the last ten years.
- 50% of respondents believe technology platforms will have the most impact on their industries over the next three to five years.
33% believe Big Data will have the greatest impact on their industries in the same time period. The following graphic provides an analysis of the areas where innovation and product development will have the most impact on respondents’ industries over the next three to five years.
Breaking down the BCG methodology
Boston Consulting Group’s rankings are based on a survey of 1,500 senior executives representing a wide variety of industries in every region. For the past seven years, the rankings were based on respondents’ picks and three financial measures: three-year growth in total shareholder return (TSR), revenue, and margins. Respondents votes counted for 80% of the ranking, TSR for 10%, and revenue and margin growth for 5% each. This year BCG made two changes to their methodology, asking respondents to rank the most innovative companies both within and outside their own industry (previously they could vote only outside their industry), and applying five-year growth in TSR to track performance over a longer time horizon. The TSR component now counts for 40% of the ranking, while respondents’ votes count for 60% (an equal weighting of 30% was given to companies within and outside the respondent’s industry). Respondents were not allowed to vote for their own company.
Also Available: The world’s 50 most innovative companies, according to the Fast Company is accessible here.