World Monitor Mag, Industrial Overview WM_November_2018_WEB_Version | Page 94

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years, in 2007 the industry with the largest presence on the list
was computing and electronics, in 2012 it was computing and
electronics and healthcare (tied), and in 2017 it was healthcare.
High-leverage innovators had operating and gross margins
similar to those of other Global Innovation 1000 companies for
the five years ending in 2017, but significantly outperformed
them on five other financial metrics, including gross profit
growth (which for high-leverage innovators was 2.1 times as
high as that of other companies) and market capitalization
growth (2.9 times as high) (see “High-Leverage Innovator
Performance Index”).
During the three five-year periods ending in 2007, 2012, and 2017,
high-leverage innovators’ relative outperformance decreased on
two key measures — gross profit growth and operating income
growth — although relative total shareholder returns increased
slightly. This likely reflects a general improvement in the overall
performance of the Global Innovation 1000 companies over
time. But the data also reveals a startling fact: The high-leverage
innovators vastly outperformed other companies in the 2007–12
period, which spans the last major business downturn and the
first years of the current expansion. This suggests that during the
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Great Recession, high-leverage innovators recovered more quickly
and robustly. In fact, they blew the doors off the competition in
gross profit growth (which was 6.6 times as high as that of other
companies), operating income growth (7.0 times as high), and total
shareholder returns, which were 13.4 times those of the rest of
the companies in the Global Innovation 1000 (see “High-Leverage
Innovator Performance, 2007–17”).
Character is tics of Success ful Innovators
In analyzing our survey respondents’ answers to questions about
innovation practices and strategies, we found sharp differences
between companies reporting fast revenue growth (43 percent
of respondents) and those reporting similar or less success than
their peers (48 percent said they were growing at the same
rate as their peers and 9 percent said they were growing more
slowly). Moreover, survey respondents who reported that their
companies were outperforming their competitors have many of
the same approaches and attitudes toward innovation that the
high-leverage innovators exemplify.
Strategic alignment. Respondents who reported that their
companies were outperforming their industry groups were far