Editor’s note: This article was first published in January 2013; its ranking of the 10 most innovative companies comes from the 2012 Booz & Company Global Innovation 1000 study, and later editions changed the list.
If we look at the annual Global Innovation 1000 study by Booz, which lists the 10 most innovative companies in the world in 2012, we can apply that spirit of innovation to our own businesses. The study’s authors say that innovation is actually a business skill that executives and employees alike can learn, develop and master. What’s clear is that you have to innovate.
At the top of the ranking are Apple, Google, 3M, Samsung, General Electric, Microsoft, Toyota, Procter & Gamble, IBM and Amazon. Let’s look at what these companies do to keep innovating.
1. Innovative companies come up with new ideas all the time
Any company can succeed with one or two great ideas, but when a company is expected to innovate year after year, it has to put the right mechanisms in place to:
- Generate ideas.
- Choose a few of all those ideas.
- Know that customers will buy the new products before investing in production.
- Measure the success of those ideas.
Apple (under Steve Jobs), in particular, was a company that gave each of these steps the attention it deserved.
2. Invest in R&D
As it happens, the 10 most innovative companies are not the ones that spend the most on R&D. To give you an idea, Apple, Google and 3M together spent a total of $9.2 billion on R&D, while Samsung alone spent $9 billion. Even so, you do have to invest in it.
3. They generate ideas in 2 simple ways
- Talking to customers: this way we try to find out what customers want and create products based directly on their needs. Apple and Procter & Gamble use this technique.
- Watching the market: keeping a close eye on the market so you can quickly make incremental improvements to ideas that are already succeeding and to those just getting started. This is what Google and Facebook do constantly in their battle to lead the web.
4. Look for ideas everywhere and in every form
Every so often, innovative companies get all their employees (or those chosen for the task) brainstorming. They analyze market segments that have nothing to do with their business. Once again, the 3 giants (Google, Apple and Facebook) are an example: sometimes they bring in entrepreneurs to contribute new ideas, or a former creative from a competitor.
Google is an example of diversification, a company that has made the leap from the web to physical products, and from physical products to renewable energy, vehicles, glasses and more. Google is, without a doubt, innovation taken to its highest level. Remember that Google set up a space some time ago for millions of users around the world to share their ideas for improving the world.
5. Innovative companies test their ideas with customers and/or employees before launching them
Most of these companies have customers who act as guinea pigs. Sometimes they have several versions of a product but plan to launch only one, so in that case the first to try the products are their own employees and employees’ families.
When it comes to launching a new product, it’s the first customers who will tell the company about any bugs, or about features of the product that could be improved.
6. Innovative companies hire innovative people
These companies hire only creative people. Unlike many companies, where being creative is a problem because you threaten their comfort zone, innovative companies always listen to their employees’ ideas, however crazy they may seem. And as a rule, once the crazy idea becomes a product, it turns out there are millions of crazy people who love it.
Also, as we’ve said before, a creative worker doesn’t need to be motivated: they don’t have time to lose motivation, because their mind is busy with productive things.
And these, basically, are the secrets the world’s most innovative companies use, steps that can be applied to our own small business.
Further reading
- 15 questions to evaluate a business idea: a preliminary feasibility analysis
- 10 steps to improve your business in 2013
- The 10 commandments for failing in business
Featured image: Steve Jurvetson, CC BY 2.0, via Flickr.
