Frontiers 2018 Aii™ Award Winning Presentation
The American Innovation Index (AII) is an ambitious project to rate and rank U.S. companies across a variety of sectors based on their level of innovativeness, as viewed through the eyes of their customers. The study examines how consumers experience innovation from the leading companies they do business with, including how the companies interact with customers and their perceived social innovativeness. Innovativeness is an important feature for companies to address in their strategy because it correlates with loyalty, differentiates them from competition and drives growth. Indeed, a company may actually invest too much in ensuring high satisfaction and not enough in new and innovative ways of meeting customer needs. Social innovation is also an area of emerging importance in a business environment where consumers (particularly Millennials) expect companies to broaden their focus to solve social and environmental problems. This presentation will introduce the project and describe insights from the 2018 baseline AII (expected to be released in the second quarter). The AII is conducted by Rockbridge Associates, Inc., a market research firm that specializes in services and technology, in partnership with the Social Innovation Collaboratory at Fordham University and the Center for Innovation at the Norwegian School of Economics (NHH). The study is based on the methodology of the Norwegian Innovation Index (NII), with the inclusion of additional metrics to capture social innovation. NHH is recruiting partners around the world to conduct local innovation index tracking studies, so that ultimately comparisons can be made across markets. This project is unique in its scope. Most innovation listings of companies in the U.S. rely on financial metrics or “upstream” features such as R&D and technology investments. Using the NII methodology, the AII relies on “downstream” results, that is, what customers actually experience from service providers when they do business after innovation investments have had an impact. In addition, many innovation indexes rank countries instead of companies, usually based on macroeconomic measures. The true measure of innovativeness of a country is how its consumers perceive the companies they rely on for services and products.
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Frontiers 2018 Aii™ Award Winning Presentation
- 1. American Innovation Index™ PRESENTED TO: SEPTEMBER 7, 2018 PRESENTED BY Gina Woodall, President, Rockbridge Associates, Inc. Lerzan Aksoy, Professor of Marketing at Gabelli School Of Business, Fordham University, Social Innovation Collaboratory Tor W. Andreassen, Professor at NHH-Norwegian School Of Economics, Center For Service Innovation Charles L. Colby, Founder and Chief Methodologist, Rockbridge Associates, Inc. Tim Keiningham, Associate Professor at St. Johns University and Chief Strategy Officer, Rockbridge Associates, Inc.
- 2. INTRODUCTION “Innovation distinguishes between a leader and a follower.” – Steve Jobs Innovation Creates Leaders
- 3. Can a non-technology based company be considered highly innovative? INTRODUCTION Apple Amazon Ikea Toyota Netflix Airbnb Southwest Airlines Samsung John Deere Honda 01 02 03 04 05 06 07 08 09 10 10 Most Innovative Companies
- 4. Vision, Scope & Methodology
- 5. VISION, SCOPE & METHODOLOGY • An ambitious research program that quantifies the innovativeness of nearly 200 companies in 20 industries from the customer point of view • The idea originated in Norway – researchers at the Norwegian School of Economics (NHH) believed the true indicator of innovativeness in a market is what can be gleaned from the actual experiences of consumers • Rockbridge partnered with the Gabelli School of Business at Fordham University and NHH to implement the study in the United States About the American Innovation Index™ (Aii)
- 6. VISION, SCOPE & METHODOLOGY • Nationally representative online survey of over 7,000 U.S. adults, comprising over 30,000 customer relationships • Customers rated companies on key metrics: Innovation Social innovation Customer Loyalty Attractiveness • For top companies, we also collected emotional experiences (arousal and pleasure) and perceived change in how the company does business. The Aii™ Methodology
- 7. VISION, SCOPE & METHODOLOGY American Innovation Index: Aii™ • Perceptions of the company: Being innovative Being creative Changing the market with its products and services Being a category pioneer Key Metrics Social Innovation Index: Sii™ • Perceptions of the company: Having innovative offerings that benefit society Prioritizing the social good Creating innovative solutions to benefit society Metrics are based on scientifically validated scales and converted to 0-100 scores.
- 8. VISION, SCOPE & METHODOLOGY Sectors Covered in the Aii™ Airlines Health Insurers Auto Insurers Investment Services Auto Manufacturers Life and Disability Insurers Banks Lodging Consumer Durables Restaurants Credit Card Providers Specialty Retailers Delivery and Shipping Supermarkets and Drugstores Energy Utilities Technology Fuel Companies TV/ISPs General Merchandise Retail Wireless/Cellular
- 9. John Deere Toyota Ford USAA Honda Chrysler Nissan General Motors Chick-fil-A Ikea VISION, SCOPE & METHODOLOGY The most innovative sectors are automotive, big ticket manufacturing and technology Apple Amazon Ikea Toyota Netflix Airbnb Southwest Airlines Samsung John Deere Honda 01 02 03 04 05 06 07 08 09 10 Most Innovative Companies (Aii™) Most Socially Innovative Companies (Sii™) Indicates company is Top-10 in both lists
- 11. • Successful companies are able to ensure their innovation assets – R&D, culture, people, technology, IP – shift downstream and influence the customer experience • Science shows that innovation is a strong driver of customer loyalty (and hence, the bottom-line), influencing the customer experience, emotions, brand attractiveness, loyalty and sales Innovation Influences Loyalty WHY INNOVATION MATTERS COMPANY INNOVATION Customer Experience Arousal Pleasure Innovative- ness Attractive -ness LOYALTY Customer Experience • Value Proposition • Value Delivery • Customer Treatment • Interaction Space
- 12. WHY INNOVATION MATTERS In travel, the most innovative companies have the most loyal customers Airbnb Southwest Airlines JetBlue Hilton Priceline Choice Hotels MarriottAlaska Airlines Expedia Inc. Delta Airlines IHG/IntercontinentalBest Western American Airlines Amtrak Wyndham LaQuinta Inns Motel 6 Frontier Airlines United Airlines Most Loyal CustomersLeast Loyal Customers LeastInnovativeMostInnovative
- 13. WHY INNOVATION MATTERS The most socially innovative companies also have the most loyal customers Airbnb Southwest Airlines JetBlue Hilton Priceline Choice Hotels Marriott Alaska Airlines Expedia Inc. Delta Airlines IHG/Intercontinental Best Western American Airlines Amtrak Wyndham LaQuinta Inns Motel 6 Frontier Airlines United Airlines Most Loyal CustomersLeast Loyal Customers LeastSociallyInnovativeMostSociallyInnovative
- 14. JetBlue Airbnb Hilton Southwest Airlines Choice Hotels Delta Airlines Alaska Airlines Best Western Wyndham LaQuinta Inns IHG/Intercontinental Marriott Amtrak American Airlines Priceline Expedia Inc. Motel 6 United Airlines Frontier Airlines WHY INNOVATION MATTERS The most successful travel companies are perceived to be innovative and socially innovative TRANSFORMATIVE DISRUPTIVE BENEVOLENT STAGNANT Most Socially InnovativeLeast Socially Innovative LeastInnovativeMostInnovative
- 15. CASE STUDY JetBlue: A successful startup according to the numbers 40 MILLION CUSTOMERS ANNUALLY 1 2$1.2 BILLION IN INCOME (2016) 3$759 MILLION IN PROFIT (2016) • Ranked #2 on Aii and #1 on Sii among travel companies • Overall (out of 163 companies)… • #13 on Aii • #14 on Sii
- 16. How JetBlue Innovates • Implements customer service training that focuses on the end-to-end customer experience • Relies on partnerships for entertainment and food and beverage to provide brands customers want • JetBlue Technology Ventures, a VC fund that invests in travel tech startups focused on the customer experience • Leverage cutting edge facial recognition technology to improve the boarding experience in partnership with TSA • Focus on environmental sustainability, from investing in NextGen tech to reduce greenhouse gas emissions to partnering with environmental non-profits and mentoring natural product companies for sourcing CASE STUDY
- 17. What JetBlue Customers Experience • JetBlue touts the fastest free in-flight WiFi with several content partnerships • The most legroom in coach of any carrier • Unlimited free brand name in-flight snacks and drinks • Unique and numerous in-flight entertainment options, 100+ channels with DirectTV and Sirius XM CASE STUDY
- 18. WRAP UP • Your industry doesn’t determine your innovativeness • You need to ensure your effort and investments reach customers “downstream” to impact the bottom line • Innovation is a powerful strategy to drive growth in a crowded sector where satisfaction is not enough • Even if you are innovative, you need to consider social innovation in order to be “transformational” rather than “disruptive” • Sometimes you can innovate without changing • Customer focused innovation instead of excessive focus on the bottom line wins Key Learnings from the Aii
- 19. WRAP UP • Next wave of the Aii planned for early 2019 • Correlate to financial data • Expand industries • Launch the program in other countries Next Steps
- 20. FOR MORE INFORMATION ABOUT Aii, PLEASE CONTACT: Gina Woodall President, Rockbridge Associates gwoodall@rockresearch.com +1 703 757 5213 ext. 11 Charles Colby Chief Methodologist & Founder ccolby@rockresearch.com +1 703 757 5213 ext. 12 THANK YOU!