The document summarizes a study on the best companies for leadership in 2011. It found that these companies followed four practices to support meaningful innovation: 1) creating a culture of innovation that invites new ideas, 2) enabling organizational agility, 3) setting the stage for innovation by discussing customer needs, and 4) focusing on collaboration. Effective leadership is also key to driving innovation by clarifying strategies and eliciting ideas from diverse teams.

1. Something
new
under the sun
Summary of the
2011 Best Companies
for Leadership study
In an uncertain and uneven global business environment, everyone agrees that
companies must innovate to survive. The Best Companies for Leadership follow four
business practices that support meaningful innovation and drive market leadership.
Leading companies have recognized that meaningful innovation invites and supports innovation and allows new ideas to flourish.
requires a long-term commitment to a disciplined approach. The practices followed by the best companies enable and
They have focused their efforts on creating a culture of encourage innovation that matters – and any business can
innovation: an environment throughout their organizations that follow their lead and make innovation easier.
©2012 Hay Group. All rights reserved

2. Something new under the sun
Enable organizational agility
With the accelerating pace of change, the They focus on instilling agility in their leaders,
window for meaningful innovation is narrower and design job roles to allow flexibility in
than ever. The best companies have flattened responding to immediate projects. They work
their organizations and streamlined governance, quickly to translate strategies and decisions into
becoming more agile and reducing obstacles action, and drive decision-making authority
to innovation. down the organizational structure.
Flexible, responsive organizations n Top 20 n All companies
My company evaluates the performance of its
leaders based on their agility.
In this company, significant strategic and
operational decisions are quickly translated
into action.
0 20 40 60 80 100
Set the stage for innovation
The best companies provide a context to nourish Moreover, they are almost twice as likely as other
and support meaningful innovation. They ensure companies to support unprofitable projects in
that employees understand the organization’s order to try new things – demonstrating a
business strategies, and encourage extensive commitment to innovation and encouraging the
discussion of future customer needs. extra effort and risks it entails.
Setting the stage n Top 20 n All companies
Employees spend much time discussing
customers’ future needs.
My company runs unprofitable projects to try
new things.
0 20 40 60 80 100
©2012 Hay Group. All rights reserved

3. Broaden perspectives
Different ways of thinking are essential to
innovation. The best companies pursue multiple
strategies to incorporate different perspectives
in the workforce.
n hey create room for new ideas, and look for
T n They engage the next generation, who value
them everywhere in their organizations. sustainability and bring their ideals to work.
n They value differences, and seek cultural,
n They deliberately seek to expand their
ethnic and national diversity in their workforce. employees’ capabilities and professional
experiences.
A wider net, a broader view n Top 20 n All companies
My company provides structured opportunities
for younger employees to promote innovative
new ideas.
My company actively recruits cultural minorities.
Leaders in my organization work hard to connect
people with projects that are personally meaningful
to them.
Employees are encouraged to learn in areas outside
of their expertise.
0 20 40 60 80 100
Focus on collaboration
If different perspectives are the raw materials They emphasize close collaboration among leaders
of innovation, collaboration is the process in different parts of their organization, and take
that brings them together. Accordingly, prompt action when leaders are not collaborating.
the best companies do not merely preach Just as importantly, they reward collaboration,
collaboration: they virtually require it. incorporating team-based measures in their
incentive plans.
Putting teeth in collaboration n Top 20 n All companies
My company evaluates and rewards our leaders
based on their ability to build excellent relationships
with their peers.
My company takes clear action when a leader is
not collaborating (even if he/she has strong
business results).
0 20 40 60 80 100

4. Something new under the sun
Global top 20 Best Companies
for Leadership
1 General Electric
2 Procter Gamble
3 IBM
4 Microsoft
5 Coca-Cola
6 McDonald’s Corporation
7 Accenture
8 Wal-Mart Stores
9 Johnson Johnson
10 Unilever
11 Toyota
Leadership drives innovation
12 Nestlé
While responsive organizational structures
are important contributors, effective, capable 13 3M
leadership is the single most important element
in creating a culture of innovation. Leadership 14 Southwest Airlines
clarifies strategies and customer needs; elicits
15 Exxon Mobil
new insights from diverse, collaborative teams;
and earns the focused effort and dedication 16 PepsiCo
that innovation requires.
17 Siemens
In short, leadership creates a climate in which
innovation is the expected norm, not the 18 Shell
miraculous exception. Such an environment
is an elusive goal, but the Best Companies for 19 Dow
Leadership provide examples that every business 20 FedEx
can follow to encourage and support innovation.
About Hay Group
Leadership creates Hay Group is a global consulting firm that
works with leaders to turn strategies into
reality. We develop talent, organize people
a climate in which innovation to be more effective and motivate them
to perform at their best. Our focus is on
is the expected norm making change happen and helping people
and organizations realize their potential.
We have over 2600 employees working in
85 offices in 48 countries. Our clients are
from the private, public and not-for-profit
sectors, across every major industry.
©2012 Hay Group. All rights reserved