The most innovative companies 2015
Transcript of The most innovative companies 2015
The most innovative companies 2015
Four factors that differentiate leaders from followers
Milano, 28 January 2016
160128 The Innovation Group BCG Preez PARTICIPANTS.pptx 1
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What we will see today in summary
Source: BCG Global Innovation Survey, 2015; Designing Digital Organizations, 2016
The Most Innovative Companies
2015 edition
Designing Digital Organizations
(in partnership with MIT CISR)
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Agenda
How leading innovators behave
How to design digital organizations
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Innovation Remains at the Top of Most Companies’ Agendas
19
40
23 23 25 26 24 24 22 22
47
32
43 43 39
45 52 5353
57
0
20
40
60
80
2007
66
2006
72
2005
66
2015
79 % respondents
Top priority
Top-three priority
2014
75
2013
77
2012
76
2010
72
2009
64
2008
66
Where does innovation/product development rank among your
company's top strategic priorities?
Source: BCG Global Innovation Survey, 2005–2015
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1. Apple
2. Google
3. Tesla Motors
4. Microsoft Corp.
5. Samsung Group
6. Toyota
7. BMW
8. Gilead Sciences
9. Amazon
10. Daimler
11. Bayer
12. Tencent
13. IBM
14. SoftBank
15. Fast Retailing
16. Yahoo!
17. Biogen
18. The Walt Disney
Company
19. Marriott
International
20. Johnson &
Johnson
21. Netflix
22. AXA
23. Hewlett-Packard
24. Amgen
25. Allianz
26. Tata Motors
27. General Electric
28. Facebook
29. BASF
30. Siemens
31. Cisco Systems
32. Dow Chemical
Company
33. Renault
34. Fidelity Investments
35. Volkswagen
36. Visa
37. DuPont
38. Hitachi
39. Roche
40. 3M
41. NEC
42. Medtronic
43. JPMorgan Chase
44. Pfizer
45. Huawei
46. Nike
47. BT Group
48. MasterCard
49. Salesforce.com
50. Lenovo
Source: BCG Global Innovation Survey, 2015
2015 50 Most Innovative Companies
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There are four factors that differentiate leaders
Emphasis on Speed
Systematic exploration of
adjacent markets
Lean R&D processes
Use of technological
platform
Source: BCG Global Innovation Survey, 2015
160128 The Innovation Group BCG Preez PARTICIPANTS.pptx 6
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Speed of Adoption Increased in Importance in 2015
-15
-12-10
-8-7-6
-5-5-4
-1
5
89
22
-20
-10
0
10
20
30
Technology
platforms
Big-data
analytics
Speed of
adopting
new tech
Digital
design
Extension
of existing
products
Operations
process
Mobile
products /
capabilities
Change in % respondents citing significant impact,
2014–2015
Business
model
Customer
channel
New
service
New
products
Supporting
capabilities
Marketing Extension
of existing
services
Which of the following areas of innovation/R&D/product development will have the
most impact on your industry over the next three to five years?
Emphasis on Speed
Source: BCG Global Innovation Survey, 2015
160128 The Innovation Group BCG Preez PARTICIPANTS.pptx 7
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Long Development Times remain the biggest Obstacle to
Returns on Innovation
What are the biggest obstacles you face when it comes to generating a return on your
investments in innovation/product development?
1210
14
1918
232525
30
36
1112
15
1820
22
25
3132
42
0
10
20
30
40
50
Lack of
coordination
Risk-averse
culture
Selecting the
right ideas to
commercialize
Development
times are too
long
% respondents
Can’t
measure
performance
well
Leadership
commitment
Compensation
not tied to
innovation
Marketing
innovations
Not enough
customer
insight
Not enough
great ideas
2015
2014
Emphasis on Speed
Source: BCG Global Innovation Survey, 2015
160128 The Innovation Group BCG Preez PARTICIPANTS.pptx 8
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Fast Innovators Apply Lean Processes
My company's innovation/R&D/product development process exhibits the following
dimensions related to lean and efficient product development
788077
8278
83
787882
7781
87
757880787779
7474
85
7774
83
0
20
40
60
80
100
Agree or strongly agree (%)
Designs
quickly
modeled
and tested
Global
knowledge
management
system
Accepts failure Systematic
cross-
functional
integration
Meaningful
KPIs
Strong
project
manager
Standardized
processes
Short cycles
and iterations
Intelligent
launch plan
Parallel
development
with stringent
funnel
Modularized
product lines
Defined
product
specifications
Fast innovators
Strong innovators
Lean R&D processes
Source: BCG Global Innovation Survey, 2015
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Strong Innovators Excel at Lean Methodologies
My company's innovation/R&D/product development process exhibits the following
dimensions related to lean and efficient product development
757880787779
7474
85
7774
83
2428
36353437
28
33302830
43
0
20
40
60
80
100
Accepts
failure
Agree or strongly agree (%)
Designs
quickly
modeled
and tested
Global
knowledge
management
system
Systematic
cross-
functional
integration
Meaningful
KPIs
Strong
project
manager
Standardized
processes
Short cycles
and iterations
Intelligent
launch plan
Parallel
development
with stringent
funnel
Modularized
product lines
Defined
product
specifications
Strong innovators
Weak innovators
Average
ratio:
2.5x
Lean R&D processes
Source: BCG Global Innovation Survey, 2015
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The Key Levers of R&D Improvement
Lean R&D processes
Source: BCG Global Innovation Survey, 2015
160128 The Innovation Group BCG Preez PARTICIPANTS.pptx 11
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High Expectations for Technology Platforms and Big Data
18
2325262626
313233343536
4950
0
20
40
60
New
products
Technology
platforms
Speed of
adopting
new
technology
Extension
of existing
services
Digital
design
Mobile
products/
capabilities
Marketing New
service
Extension
of existing
products
Big-data
analytics
Business
model
Customer
channel
Operations
process
% of respondents
Supporting
capabilities
Which of the following areas of innovation/product development will have the most
impact on your industry over the next three to five years?
Use of technological platform
Source: BCG Global Innovation Survey, 2015
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Expand to adjacencies is key
Systematic exploration of adjacent markets
"As markets mature and competition increases,
growth in the core portfolio inevitably slows"
"Companies that innovate successfully
in existing markets often end up
cannibalizing sales of their own brands"
"Big companies are often victims of their own success;
they operate according to
cultures and business system
that are set up to drive growth in the core"
Source: BCG Global Innovation Survey, 2015
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The five prerequisites of profitable adjacent growth
• Look at the intersection of context (who the customer is, how she/he
thinks, what she/he does) and emotional or functional needs
Explore demand-centric growth
• Avoid that resources and budget is pulled into core efforts
• Innovations require different people to those who drive core business
Cultivate a new organization
with new talents
• Required a separate senior governance team, equivalent to that of a
private equity or venture capital
Employ separate governance
Adopt an experimental approach
• Employ a low-cost fast-fail methodology based on a test, learn, adapt
and move-on approach, because failures are likely in the unknown
Build the right cultural enablers
• Long-term focus
• Appetite for risk
Systematic exploration of adjacent markets
Source: BCG Global Innovation Survey, 2015
160128 The Innovation Group BCG Preez PARTICIPANTS.pptx 14
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Agenda
How leading innovators behave
How to design digital organizations
160128 The Innovation Group BCG Preez PARTICIPANTS.pptx 15
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"Business architecture is generally not approached
strategically and was not supporting
transformations for the digital economy"
Source: Designing Digital Organizations, 2016
160128 The Innovation Group BCG Preez PARTICIPANTS.pptx 16
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What we’ve learned about digital strategy
Digital Service
Backbone
Operational
Backbone
Digitized
solutions
Customer
engagement
Solution capabilities
• Micro-services
• Connectivity
• Sophisticated analytics
Transform Go to Market
• More opportunities to
connect
• Better understanding of
customers
• Rapid (real-time) response
to immediate and ever-
changing needs
• Loyalty and trust
Transform Value Proposition
• Solving customer
painpoints with innovative
products/services
• Packaging information with
products/services
• New revenue streams
• Customer lock-in
Internal capabilities
• Integration
• Responsiveness
• Access to operational data
Source: Designing Digital Organizations, 2016
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Customer engagement: the Nordstrom example
Source: Nordstrom Investor presentation, June 2015
Online Multi-channel Seamless experience
1998 2004 2009 2011 2015
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IT
Rationalization
Operational
Excellence
Leading Edge
Digital Business Initiative
Digitized solutions: the Schindler example
2005 2010 2015
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How to design winning organizations in the digital world
Digital strategy
Operational
backbone
Digital
service
backbone
Partnership
with startups Processes
Skills &
incentives
Integrator
Roles
Structures Structures • Organizational structure as a pre-condition for digitization
• Engage multi-disciplinary teams in digital innovation
Integrator roles • Synchronization is a huge challenge as companies
empower people and attempt to rapidly innovate
Processes • Rapid, iterative delivery methods
• Planning and investment prioritization processes
• Cross-functional collaboration processes
Partnership with startups • Companies partner with startups to speed up innovation
• Labs
Skills & incentives • Developing and recruiting digital skills
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Structures: Four potential archetypes models
for digital organisational structures
Primary value lever of digital activity
Proximity to business Scale
Low
High
Level of disruption
of digital activity
BU BU BU
D D D
Non-digital org. unit Digital org. unit
"Decentralized model"
BU BU BU
"Centralized model"
COE
"Stand-alone model"
BU BU BU DE
There is no one-size-fits-all solution
• Businesses have different levels of
digital needs & strategies
• Therefore digital transformation
activities require different levels of
disruption and scale
Potential organizational archetypes
can be defined by two factors
• Level of disruption intended from
digital activities
• Source of value digital provides to
business (scale vs de-averaged)
Multiple digital structures can be
relevant for a company
• Key is to align company objectives
& priorities with benefits & tradeoffs
of a given model
Note: BU = Business Unit; D = Digital team; DE = Digital Excubator; COE = Digital Center of Excellence Source: BCG/DV analysis
Key considerations
BU BU BU
D D D
COE DE
"Hybrid model"