World Monitor Mag, Industrial Overview WM_November_2018_WEB_Version - Page 99

additional content 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 & supported by EUROBAK 97