Innovation Leaders 2008 Vienna

WWW.INNOVATIONLEADERS.ORG

2007/8 Innovation Leaders:Identifying Future Growth

Front End of Innovation - Vienna

30 January 2008

[email protected]


Innovaro


Europe’s leading innovation strategy and insight firm

Innovaro helps companies across the innovation spectrum, from building new

internal innovation capability to identifying multi $billion future opportunities

Experts in helping organisations to

– Identify new growth opportunities,

– Define and implement new innovation strategies,

– Generate and deliver better ideas and

– Renew their organisational capability

Work at the leading edge of innovation practice, identifying the

key issues and helping clients to successfully address them and create value

Undertake the annual Innovation Leaders analysis independent of our consultancy workUndertake the annual Innovation Leaders analysis independent of our consultancy work


Innovation Leaders Analysis


Each year we assess the performance of over major 1500 firms

Eight key areas are researched as input into the assessments:

1. Organisational culture and supporting structure

2. Strategic focus on innovation and its role in driving corporate growth

3. Number of major new product launches and relative success ratios

4. Growth in revenues, profits and market capitalisation

5. Average margin per product or customer

6. Investment in innovation-related activities such as R&D and marketing

7. Brand value and human capital growth

8. Peer review from within the sector

Together this provides what we believe to be the most accurate assessment of current innovation impactTogether this provides what we believe to be the most accurate assessment of current innovation impact


Innovation Leaders’ shares have shown consistent growth …

Half the companies identified in January 2005 as Innovation Leaders subsequently

demonstrated an increase in share price of at least 50% over the following two years

The top five performers over 2005/7 all had growth in share prices of over 50%:

• Apple - increase in share price of 163%

• Google - increase in share price of 139%

• Rolls-Royce - increase in share price of 89%

• Toyota - increase in share price of 64%, and

• Canon - increase in share price of 61%

The Innovation Leaders stock portfolio has outperformed all major indexes for the past 7 yearsThe Innovation Leaders stock portfolio has outperformed all major indexes for the past 7 years


… and the past year this out-performance has continued

From 1 Jan 2007 to 1 Jan 2008, 2006/7 Innovation Leaders shares continued to rise:

• Apple Up 135%

• Nokia Up 91%

• Google Up 52%

• Adidas Up 36%

• Reckitt Benckiser Up 25%

• PepsiCo Up 23%

• Microsoft Up 21%

• Overall Portfolio Up 12%


The 25 sectors we assess cover a wide range of businesses

Aerospace

Airlines

Automotive

Banking

Chemicals

Consumer Electronics

Consumer Goods

Energy

Fashion Retail

FMCG

Food and Drink

General Retail

Hotels and Leisure

Insurance

IT Hardware

IT Services

Logistics

Media and Entertainment

Medical Devices

Office Equipment

Pharmaceuticals

Software

Sports Goods

Telecom Equipment

Telecom Operators


Across these sectors the 2007/8 innovation leaders are clear


Most companies now aspire to innovate across the range


Adidas scores on technology driven performance innovation


Apple is #1 for many and is a good business model innovator


BMW is having impact in the high end of the auto sector


Nokia is innovating in all areas of the global market place


Google is using a perpetual beta approach to enable to enter markets

• Core money maker still Google Ads

• All new offers based in and around Google Search

• Search was a late entrant into a maturing market

• Most new offers are launched to market as beta

• User help configure to maximise impact

• Many are disrupting existing markets


H&M use internal process efficiency to deliver fast fashion

• Eclipsed Gap, M&S and Zara

• Fast fashion at the right price

• Store managers are eyes and ears

• Highly integrated product mix

• Right product in every store

• Sophisticated logistics operation

• Underpinned by state of the art EPOS


Infosys is making impact in process innovation in IT services

• One of India’s largest /fast growth firms

• Multiple outsourcing contracts

• Now also at top end design for Airbus / GM

• Ten years contracts with SLA in place

• Requirement to innovate 3 years in

• Have set up process innovation labs

17


LEGO has re-invented the way it develops new products

• LEGO Direct led switch to internet

• Leading community development

• www.LEGOfactory.com

• Encourage user participation in design

• MINDSTORMS User Panel a success

• MINDSTORMS NXT – 100 developers

• Leader in fan-base co-development


Reckitt Benckiser are masters of fast incremental innovation

• Consistent double digit growth

• Strong individual innovation incentives

• Innovation central to corporate culture

• Customer insight drives everything

• Category managers are king

• Fast scale up and squeeze of costs


Samsung made a major shift to innovate across the board

• 1992: Change everything

• Now leading consumer electronics brand

• #1 or #2 in 20 market segments

• Lead user of value innovation approach

• Also provides ingredients for competitors

• B&O, Sony, Nokia etc all use Samsung


UPS are one of the leaders of the simplicity movement

1. Steady growth of UPS services

2. Company behind many firms logistics

3. Focus on process innovation

4. Success within 6 month: Fail before

5. Adopt the most appropriate solutions

6. Rapidly expanding portfolio of services


Virgin Atlantic is pre-eminent at service + product innovation


All of these innovative companies share some common traits

• Strategic Focus – there is a strong strategic focus on the role of innovation within their

markets and the contribution that innovation makes to the business.

• Insight – they have an excellent understanding of the marketplace, customers and an

ability to configure products and services around evident needs.

• Collaboration – they clearly understand the core capabilities of themselves and their

partners and work together to deliver innovative products and services.

• Process – they have simple yet effective approaches to identifying, and then quickly

launching, new products and services.

• Organisation – roles, responsibilities and culture all support innovation while

appropriate metrics are used to measure and reward successful innovation.

These are not unique to these firms – but they are well integrated and leveraged to best effectThese are not unique to these firms – but they are well integrated and leveraged to best effect


In addition, we also see three additional core capabilities

Multiple Innovation Across product, service and business models

Open Open Innovation Beyond the usual suspects and ecosystems

Mapping Future Growth


Product innovators are gaining major impact from services


Service innovators are also active in product innovation






While others are innovating around their business models


Two Questions


To become a leading innovator there are some key issues

1. Have you got the basics covered?

• Clear strategic focus

• Stimulating use of insights

• Appropriate collaboration

• Simple effective process

• Organisational roles and ownership

2. How can you use multilayered innovation – products, services and business models?


For more information

Websites:

www.innovaro.com

www.innovationleaders.org

www.technologyfutures.org

Insights:

[email protected]

[email protected]

Innovaro:

Amsterdam, Cambridge, London and Munich

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Innovation Leaders 2008 Vienna