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The New Innovation Excellence
Not long ago, companies that aimed for innovation excellence
might have felt it was sufficient to be good at most of the
five characteristics discussed above, and best-in-class at one
or two. But the standard for innovation excellence has been
rising as businesses have become more competitive in the 21st
century — which the Global Innovation 1000 studies have shown
for many years. Companies that aspire to the highest level of
innovation leadership today need to excel at every aspect of
innovation. And they need to make them converge in a way that
pushes the boundaries of market expectations and transforms
the customer experience. Here we can revisit the two companies
that made the high-leverage innovator list throughout the entire
15-year performance window of our analysis.
Apple’s innovation mind-set is thoroughly integrated in the
mission as well as the organization of the company. When
asked in a Fast Company interviewwhat outsiders might
misunderstand or underappreciate about Apple, CEO Cook said:
“The thing they might miss is how different Apple is versus
other technology companies. A financial person just looking
at revenues and profits may think, ‘They’re good [at making
money].’ But that’s not who we are. We’re a group of people who
are trying to change the world for the better…. For us, technology
is a background thing. We don’t want people to have to focus on
bits and bytes and feeds and speeds. We don’t want people to
have to go to multiple [systems] or live with a device that’s not
integrated. We do the hardware and the software, and some of
the key services as well, to provide a whole system.”
As noted earlier, Apple emphasizes the importance of cross-
functional collaboration. When the company built its new $5
billion headquarters (completed in 2018), which has been likened
to a spaceship, the architecture and building design revolved
around encouraging creativity and innovation, in much the same
way that some of the icons of innovation architecture — the
mid-20th-century Bell Labs model of collaborative workspace
and MIT Media Lab’s technology research hub — were designed
to encourage interdisciplinary interaction.
Stanley Black & Decker has long been known as a product
innovation leader in its field, but CEO James M. Loree has set
ambitious goals. He told The Streetin August 2018, “We want to
be known as one of the world’s most innovative companies. So
we have created an enormous wave of innovation at this point…
embedded in the culture of Stanley Black & Decker. We have
stepped up and we are doing breakthrough innovation activities.
We are doing venture investing. We are doing accelerators for
entrepreneurs externally and internally.” In the company’s 2017
year in review for shareholders, Loree wrote that the company
currently had “10 breakthrough innovation teams covering
all businesses and multiple worldwide locations focused on
developing innovations that each have the potential to deliver
greater than $100 million in annual revenues.”
Stanley is advancing its innovation ecosystem along many
dimensions, including Stanley Ventures in Silicon Valley, which
invests in innovative startups; an additive manufacturing
accelerator program in Hartford, Conn., in partnership with
Techstars; a digital accelerator in Atlanta; and an industrial
incubator in Silicon Valley. “The innovation strategy is globally
distributed and diverse, yet holistic and seamlessly integrated
into our businesses,” says Mark Maybury, Stanley Black &
Decker’s chief technology officer. “The reality we’re facing is
that if we want to maintain or continue to grow our leadership
position, we need to focus not only on the incremental
innovations that pay the bills today, but also on the things that
will shape the industries in which we compete.”
The consistent success of Apple, Stanley, and the other
star performers on our high-leverage innovators list sets a
performance goal that all innovators can aspire to reach. But
the fact that relatively few of the Global Innovation 1000
companies are able to hit that target in a given year — let alone
repeatedly over time — is a reminder that innovation excellence
isn’t something that can be bought by simply spending more on
R&D. Rather, it’s the result of painstaking attention to strategy,
culture, executive involvement, customer insights, and execution
throughout the stages of innovation, all with an eye toward
creating differentiated experiences.
AuthorProfiles:
• Barry Jaruzelski is a thought leader on innovation for Strategy&, PwC’s strategy
consulting business. Based in Florham Park, N.J., he is a principal with PwC US. He
works with high-tech and industrial clients on corporate and product strategy and the
transformation of core innovation processes. He created the Global Innovation 1000
study in 2005, and in 2013 was named one of the “Top 25 Consultants” by Consulting
magazine.
• Robert Chwalik is an advisor to executives in the automotive, industrials, and oil and
gas sectors for Strategy&, helping them improve both top-line growth and bottom-line
performance in such key operational and strategic areas as global engineering and
product innovation. He is a principal with PwC US and is based in New York.
• Brad Goehle is an advisor to executives on innovation and product development for
Strategy&, helping companies in the aerospace and defense, automotive, and industrial
sectors with product and portfolio strategy, engineering, and enterprise transformation.
He is a managing director with PwC US and is based in Arlington, Va.
Resources:
1. Barry Jaruzelski, “Why Silicon Valley’s Success Is So Hard to Replicate,” Scientific
American, Mar. 14, 2014: Bay Area tech firms integrate their innovation strategies with
their business strategies, leading to standout performance.
2. Barry Jaruzelski, Kevin Dehoff, and Rakesh Bordia, “Smart Spenders: The Global
Innovation 1000,” s+b, Nov. 30, 2006: The first year that the study created and
analyzed a list of high-leverage innovators.
3. Robert Safian, “Why Apple Is the World’s Most Innovative Company,” Fast Company,
Feb. 21, 2018: An interview with CEO Tim Cook on the company’s track record of
innovation success.
4. All previous Global Innovation 1000 studies from 2005 to 2017, as well as videos,
infographics, and other articles: strategyand.pwc.com/innovation1000.
5. Strategy&’s Innovation Strategy Profiler.
Material by: Strategy &
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