Innovation leaders analysis summary 2010 11

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Lessons from the Leaders

2010/11 Analysis Summary

16 June 2011


Background Context on the InnovaBon Leaders Analysis


For the past ten years we have analysed the innovaBon performance of over 1500 firms and profiled the leaders

Eight key areas are examined as input into the annual assessments:

1.   OrganisaBonal culture and supporBng structure 2.   Strategic focus on innovaBon and its role in driving corporate growth 3.   Number of major new product launches and relaBve success raBos

4.   Growth in revenues, profits and market capitalisaBon

5.   Average margin per product or customer

6.   Investment in innovaBon-‐related acBviBes such as R&D and markeBng

7.   Brand value and human capital growth

8.   Peer review from within the sector


At the core of the analysis, for each sector we look at a raBo of innovaBon impact to the resources being deployed

Each algorithm is based on: InnovaBon Output

InnovaBon Input

Company CapabiliBes

InnovaBon Input InnovaBon Output

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


Ten years ago, the capabiliBes that made a difference in innovaBon were clearly idenBfiable and a focus for all

The tradi*onal areas for a0en*on have been:

1.   Clear strategic focus on building and exploiBng core competences

2.   Using mulB-‐funcBonal teams to drive innovaBon across the organisaBon

3.   AdopBng stage-‐gate processes to manage new product development

4.   Engaging the voice of the customer and new sources of consumer insight

These are now hygiene factors – everyone uses similar approaches so they make no real difference


In recent years, InnovaBon Leaders have variously been developing new capabiliBes to shi] performance up a gear

Recent areas of focus include:

•  Open InnovaBon especially around external sourcing of innovaBon

•  Strategic collaboraBon between companies across sector boundaries

•  Engaging customers in the heart of the innovaBon process

•  Using longer term foresight to beêr inform on emerging opportuniBes

These will also become commodities so organisations are looking at the new leaders for inspiration


We assess 25 sectors and cover a wide range of businesses so we can highlight the successes in different industries

Aerospace

Airlines

AutomoBve

Chemicals

Consumer Electronics

Energy

Fashion Retail

Food and Drink

General Retail

Household Goods

Hotels and Leisure

Insurance

IT Hardware

IT Services

LogisBcs

Media and Entertainment

Medical Devices

Office Equipment

PharmaceuBcals

Retail Banking

So]ware

Sports Goods

Telecom Equipment

Telecom Operators

Toys and Games


Throughout the past decade, the InnovaBon Leaders have consistently out-‐performed peers and major share indexes

Start Yr End Yr FTSE 100 2yr NASDAQ 2 yr IL Porfolio 2yr Change

2001 2003 -‐15% -‐1% 0%

2002 2004 +26% +60% +68%

2003 2005 +26% +12% +65%

2004 2006 +29% +11% +39%

2005 2007 +15% +21% +58%

2006 2008 -‐32% -‐37% -‐20%

2007 2009 -‐16% -‐15% -‐16%

2008 2010 +40% +73% +130%

Average +9.1% +15.9% +40.2%

This tracks the share performance of companies over the 2 years after Innovation Leaders analysis


The 2010/11 InnovaBon Leaders


Across the 25 sectors the current innovaBon leaders are clear and show how innovaBon pracBce is evolving


Air New Zealand is using product and process innovaBon to bring about effecBve change in all classes of air travel


Amazon is very much a technology-‐focused company using and sharing capabiliBes well beyond its core retail business


With the iPad, Apple has yet again used its design and user interface prowess to (re)invent and grow another category


AON is gaining plaudits for new risk management plaforms in the insurance sector while also promoBng itself globally


ARM is the hidden ingredient in many mobile devices and earns growing revenues from technology licensing deals


BASF is growing well through simultaneously creaBng new technology plaforms and reducing environmental impact


BharB Aitrel’s unique business model is allowing for rapid expansion with none of the usual telecom barriers to scale


BMW is enhancing the travel experience for drivers and passengers while also launching a series of new plaforms


Canon’s focus on building on its four core technology plaforms maintains its leadership in Office Products


Across its entertainment plaforms, Disney is delivering a sustained porfolio of hits that sustained profitable growth


Google conBnues to innovate disrupBvely across the board with notable impact in mobile, imaging and corporate apps


Inditex and its Zara brand is opening 10 new stores a week as the supply-‐chain-‐driven customer experience wins out


In IT Services, Infosys has shi]ed beyond BPO and off-‐shoring to help customers beêr innovate with their data


Juniper Networks is developing key technologies for next generaBon global telecom and cloud storage networks


LEGO set the standard in fan-‐based innovaBon and is now pushing the envelope of acBviBes into a^racBve markets


Having reposiBoned its porfolio, Nestle is focused on innovaBon across its brands and emerging market growth


Nike has regained leadership in sportswear through technical performance and driving the sustainability agenda


Novo Nordisk conBnues to innovate on drug delivery as well as therapies and is very acBve in diabetes educaBon


Recki^ Benckiser’s 12th year of constant growth is driven by fast incremental innovaBon and power-‐brand expansion


Rolls Royce’s technology leadership coupled with its Total Care business model makes it a preferred partner for many


Santander’s global growth is being driven by delivering compeBBve retail products across a highly efficient network


In a challenging environment, Shell’s shi] from oil to gas is paving the way for a more sustainable future energy mix


In the medical devices sector, Stryker is delivering new innovaBve soluBons across a number of key arenas


New brands such as alo] and element have added extra twists as Starwood sets the pace in the hotel / leisure space


With over 8.5m customers a day, UPS is growing its logisBcs services globally with a highly tuned process at the core


Across all 25 companies, we can see the next tranche of innovaBon capabiliBes emerging onto the global scene

These include:

•  Technology partnerships focused around shared growth plaforms

•  OpBmising delivery engines to give consistent global consumer experiences

•  ReinvenBng the status quo and challenging exisBng business models

•  ProacBvely realigning product porfolios ahead of emerging changes


Further InformaBon


The InnovaBon Leaders analysis is used to sBmulate thinking in different companies in a number of ways

Follow us on twiêr #innovatnleaders

To discuss the research: [email protected]

To request a keynote speech: [email protected]

To organise a workshop: [email protected]

Or to get in touch directly:

Dr Tim Jones

Director of Research -‐ InnovaBon Leaders

[email protected]

+44 780 175 5054


Lessons from the Leaders

2010/11 Analysis Summary

16 June 2011

Business

Innovation leaders analysis summary 2010 11