It goes without saying that a company’s ability to innovate is tied to its performance. But what does it take to outperform in the long term? This is the question set out in the Boston Consulting Group’s latest report, which ranks the world’s most innovative companies in 2020.
In The Most Innovative Companies 2020: The Serial Innovation Imperative, BCG found that successful innovators do indeed produce superior returns.
Almost 60% of “committed innovators” (companies who see innovation as a top priority and which represent under half of the respondents) report generating a rising proportion of sales from products and services launched in the past three years.
Even the most innovative firms, however, struggle to achieve serial innovation success, according to the research. Just eight companies have featured consecutively in the top 50 ranking in the last 14 years.
Driving long-term outperformance
While a focus on innovation drives outperformance for global businesses, BCG found that there are clear advantages of scale and that serial innovation is imperative to drive outperformance over time.
Achieving a cycle of perpetual innovation success is only possible with a well-tuned system. According to the consultants, there are three key requirements for companies to drive consistent performance over time:
- Develop a clear innovation strategy and support it with appropriate investment;
- Leverage the advantages of scale;
- Ensure the company’s innovation system is sufficiently nimble to identify and seize the best opportunities quickly and decisively.
Apple, Alphabet, Amazon, Microsoft and Samsung topped the 2020 Most Innovative Companies ranking, which surveyed more than 2,500 global executives and analysed its global performance database of over 1,000 firms.
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