Innovation Leaders 2008 Vienna


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Jan 2008 version of innovation leaders talk given in Vienna and based on analysis

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Innovation Leaders 2008 Vienna

  1. 1. 2007/8 Innovation Leaders: Identifying Future Growth Front End of Innovation - Vienna 30 January 2008 [email_address]
  2. 2. Innovaro
  3. 3. Europe’s leading innovation strategy and insight firm <ul><li>Innovaro helps companies across the innovation spectrum, from building new </li></ul><ul><li>internal innovation capability to identifying multi $billion future opportunities </li></ul><ul><li>Experts in helping organisations to </li></ul><ul><ul><li>Identify new growth opportunities, </li></ul></ul><ul><ul><li>Define and implement new innovation strategies, </li></ul></ul><ul><ul><li>Generate and deliver better ideas and </li></ul></ul><ul><ul><li>Renew their organisational capability </li></ul></ul><ul><li>Work at the leading edge of innovation practice, identifying the </li></ul><ul><li>key issues and helping clients to successfully address them and create value </li></ul>Undertake the annual Innovation Leaders analysis independent of our consultancy work
  4. 4. Innovation Leaders Analysis
  5. 5. Each year we assess the performance of over major 1500 firms <ul><li>Eight key areas are researched as input into the assessments: </li></ul><ul><li>Organisational culture and supporting structure </li></ul><ul><li>Strategic focus on innovation and its role in driving corporate growth </li></ul><ul><li>Number of major new product launches and relative success ratios </li></ul><ul><li>Growth in revenues, profits and market capitalisation </li></ul><ul><li>Average margin per product or customer </li></ul><ul><li>Investment in innovation-related activities such as R&D and marketing </li></ul><ul><li>Brand value and human capital growth </li></ul><ul><li>Peer review from within the sector </li></ul>Together this provides what we believe to be the most accurate assessment of current innovation impact
  6. 6. Innovation Leaders’ shares have shown consistent growth … <ul><li>Half the companies identified in January 2005 as Innovation Leaders subsequently </li></ul><ul><li>demonstrated an increase in share price of at least 50% over the following two years </li></ul><ul><li>The top five performers over 2005/7 all had growth in share prices of over 50%: </li></ul><ul><li>Apple - increase in share price of 163% </li></ul><ul><li>Google - increase in share price of 139% </li></ul><ul><li>Rolls-Royce - increase in share price of 89% </li></ul><ul><li>Toyota - increase in share price of 64%, and </li></ul><ul><li>Canon - increase in share price of 61% </li></ul>The Innovation Leaders stock portfolio has outperformed all major indexes for the past 7 years
  7. 7. … and the past year this out-performance has continued <ul><li>From 1 Jan 2007 to 1 Jan 2008, 2006/7 Innovation Leaders shares continued to rise: </li></ul><ul><li>Apple Up 135% </li></ul><ul><li>Nokia Up 91% </li></ul><ul><li>Google Up 52% </li></ul><ul><li>Adidas Up 36% </li></ul><ul><li>Reckitt Benckiser Up 25% </li></ul><ul><li>PepsiCo Up 23% </li></ul><ul><li>Microsoft Up 21% </li></ul><ul><li>Overall Portfolio Up 12% </li></ul>
  8. 8. The 25 sectors we assess cover a wide range of businesses <ul><li>Aerospace </li></ul><ul><li>Airlines </li></ul><ul><li>Automotive </li></ul><ul><li>Banking </li></ul><ul><li>Chemicals </li></ul><ul><li>Consumer Electronics </li></ul><ul><li>Consumer Goods </li></ul><ul><li>Energy </li></ul><ul><li>Fashion Retail </li></ul><ul><li>FMCG </li></ul><ul><li>Food and Drink </li></ul><ul><li>General Retail </li></ul><ul><li>Hotels and Leisure </li></ul><ul><li>Insurance </li></ul><ul><li>IT Hardware </li></ul><ul><li>IT Services </li></ul><ul><li>Logistics </li></ul><ul><li>Media and Entertainment </li></ul><ul><li>Medical Devices </li></ul><ul><li>Office Equipment </li></ul><ul><li>Pharmaceuticals </li></ul><ul><li>Software </li></ul><ul><li>Sports Goods </li></ul><ul><li>Telecom Equipment </li></ul><ul><li>Telecom Operators </li></ul>
  9. 9. Across these sectors the 2007/8 innovation leaders are clear
  10. 10. Most companies now aspire to innovate across the range
  11. 11. Adidas scores on technology driven performance innovation
  12. 12. Apple is #1 for many and is a good business model innovator
  13. 13. BMW is having impact in the high end of the auto sector
  14. 14. Nokia is innovating in all areas of the global market place
  15. 15. Google is using a perpetual beta approach to enable to enter markets <ul><li>Core money maker still Google Ads </li></ul><ul><li>All new offers based in and around Google Search </li></ul><ul><li>Search was a late entrant into a maturing market </li></ul><ul><li>Most new offers are launched to market as beta </li></ul><ul><li>User help configure to maximise impact </li></ul><ul><li>Many are disrupting existing markets </li></ul>
  16. 16. H&M use internal process efficiency to deliver fast fashion <ul><li>Eclipsed Gap, M&S and Zara </li></ul><ul><li>Fast fashion at the right price </li></ul><ul><li>Store managers are eyes and ears </li></ul><ul><li>Highly integrated product mix </li></ul><ul><li>Right product in every store </li></ul><ul><li>Sophisticated logistics operation </li></ul><ul><li>Underpinned by state of the art EPOS </li></ul>
  17. 17. Infosys is making impact in process innovation in IT services <ul><li>One of India’s largest /fast growth firms </li></ul><ul><li>Multiple outsourcing contracts </li></ul><ul><li>Now also at top end design for Airbus / GM </li></ul><ul><li>Ten years contracts with SLA in place </li></ul><ul><li>Requirement to innovate 3 years in </li></ul><ul><li>Have set up process innovation labs </li></ul>
  18. 18. LEGO has re-invented the way it develops new products <ul><li>LEGO Direct led switch to internet </li></ul><ul><li>Leading community development </li></ul><ul><li> </li></ul><ul><li>Encourage user participation in design </li></ul><ul><li>MINDSTORMS User Panel a success </li></ul><ul><li>MINDSTORMS NXT – 100 developers </li></ul><ul><li>Leader in fan-base co-development </li></ul>
  19. 19. Reckitt Benckiser are masters of fast incremental innovation <ul><li>Consistent double digit growth </li></ul><ul><li>Strong individual innovation incentives </li></ul><ul><li>Innovation central to corporate culture </li></ul><ul><li>Customer insight drives everything </li></ul><ul><li>Category managers are king </li></ul><ul><li>Fast scale up and squeeze of costs </li></ul>
  20. 20. Samsung made a major shift to innovate across the board <ul><li>1992: Change everything </li></ul><ul><li>Now leading consumer electronics brand </li></ul><ul><li>#1 or #2 in 20 market segments </li></ul><ul><li>Lead user of value innovation approach </li></ul><ul><li>Also provides ingredients for competitors </li></ul><ul><li>B&O, Sony, Nokia etc all use Samsung </li></ul>
  21. 21. UPS are one of the leaders of the simplicity movement <ul><li>Steady growth of UPS services </li></ul><ul><li>Company behind many firms logistics </li></ul><ul><li>Focus on process innovation </li></ul><ul><li>Success within 6 month: Fail before </li></ul><ul><li>Adopt the most appropriate solutions </li></ul><ul><li>Rapidly expanding portfolio of services </li></ul>
  22. 22. Virgin Atlantic is pre-eminent at service + product innovation
  23. 23. All of these innovative companies share some common traits <ul><li>Strategic Focus – there is a strong strategic focus on the role of innovation within their markets and the contribution that innovation makes to the business. </li></ul><ul><li>Insight – they have an excellent understanding of the marketplace, customers and an ability to configure products and services around evident needs. </li></ul><ul><li>Collaboration – they clearly understand the core capabilities of themselves and their partners and work together to deliver innovative products and services. </li></ul><ul><li>Process – they have simple yet effective approaches to identifying, and then quickly launching, new products and services. </li></ul><ul><li>Organisation – roles, responsibilities and culture all support innovation while appropriate metrics are used to measure and reward successful innovation. </li></ul>These are not unique to these firms – but they are well integrated and leveraged to best effect
  24. 24. In addition, we also see three additional core capabilities <ul><li>Multiple Innovation Across product, service and business models </li></ul><ul><li>Open Open Innovation Beyond the usual suspects and ecosystems </li></ul><ul><li>Mapping Future Growth </li></ul>
  25. 25. Product innovators are gaining major impact from services
  26. 26. Service innovators are also active in product innovation
  27. 27. Service innovators are also active in product innovation
  28. 28. Service innovators are also active in product innovation
  29. 29. While others are innovating around their business models
  30. 30. Two Questions
  31. 31. To become a leading innovator there are some key issues <ul><li>Have you got the basics covered? </li></ul><ul><li>Clear strategic focus </li></ul><ul><li>Stimulating use of insights </li></ul><ul><li>Appropriate collaboration </li></ul><ul><li>Simple effective process </li></ul><ul><li>Organisational roles and ownership </li></ul><ul><li>How can you use multilayered innovation – products, services and business models? </li></ul>
  32. 32. For more information <ul><li>Websites: </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>Insights: </li></ul><ul><li>[email_address] </li></ul><ul><li>[email_address] </li></ul><ul><li>Innovaro: </li></ul><ul><li>Amsterdam, Cambridge, London and Munich </li></ul>