THE MOST INNOVATIVE
COMPANIES 2009
The State of InnovationNot so long ago, innovation was a must-do priority for business. Now research and development might seem
more like vacation homes and new cars—luxuries that will have to wait for better times. In an annual survey of top executives by Boston Consulting Group, which provides
the foundation of BusinessWeek's Most Innovative Companies list, more respondents said that innovation
spending will be flat or down than since the ranking began in 2005. But recession and market meltdown aside, many on the 2009 ranking are finding ways to
forge ahead.
No. 50: ROYAL DUTCH SHELL
With revenue of $458.4 billion in 2008, Royal Dutch Shell might behave as if money were
no object. But it is a big believer in cost-cutting from new technology. At offshore sites, for instance, Shell uses unmanned platforms
powered by wind and solar energy.
No. 49: TARGET
As consumers go back to basics, Target has struggled. To adjust to the times, the discount retailer is testing a prototype store with more
grocery and drugstore items. Meanwhile, Target is protecting its cheap-chic cachet with limited-
run offerings.
No. 48: FIAT
Stylish, fuel-efficient models such as the Bravo and Punto could soon appear in U.S. showrooms, thanks to Fiat's new partnership with Chrysler. Forget the "Fix It Again, Tony"
jokes: Quality has dramatically improved.
No. 47: JPMORGAN CHASE
CEO Jamie Dimon has a big thing for technology. After whipping the bank's IT
system into shape, Dimon has been moving more money toward paperless products and
services. One example: envelope-free deposits at all the bank's ATMs.
No. 46: LENOVOSleek and functional, Lenovo computers
stand out among the rest from China. And by understanding the needs of China's vastly diverse consumers, Lenovo has become a leading seller to Net-savvy urban youth as
well as penny-pinching farmers.
No. 45: SOUTHWESTERNThe carrier made flying affordable for the
masses, thanks to a hyper-efficient ability to squeeze more flights out of each plane every
day. Southwest is now redesigning airport gates to streamline boarding.
No. 44: JOHNSON & JOHNSON
Johnson & Johnson is as innovative in how its runs its businesses as it is in product
development. The health-care conglomerate buys operating companies and then gives
them considerable independence.
No. 43: NIKEKnown for design, the athletic shoe and apparel maker is now refashioning its
supply chain and stores. CEO Mark Parker says the restructuring could reduce Nike's 35,000-person workforce by 4%. But will jocks still pay three figures for a pair of
sneaks?
No. 42: BANCO SANTANDER
The Spanish bank, which has made an art form from cross-selling financial products to its huge base of retail customers worldwide, now has its sights on U.S. expansion, through its acquisition
of S&L Sovereign Bank.
No. 41: 3MThe creator of Post-it Notes and Scotch Tape has been scoring more recently in industrial
markets. Its expertise in adhesives, films, and weatherproofing came together in a new
product that protects the backside of solar panels.
No. 40: FACEBOOKWith over 200 million users, the world's
largest social networking site continues to focus on growing its population, not its
profits, and that means new features and new partners like CNN and Hulu.
No. 39: IBERDROLAThrough a string of acquisitions, this
Spanish utility has become the world's biggest wind-power company, operating
turbine farms from the U.S. Pacific Northwest to the Baltics and the Greek islands. Next up are projects in Mexico
and Hungary.
No. 38: NESTLÉThe world's biggest food company keeps
rolling out new products, such as Nespresso coffee pods, thanks to a double-digit increase
in R&D spending. It's also feasting on healthier profit margins after a top-to-bottom global
reorganization.
No. 37: EXXON MOBILExxon Mobil is famously tight-lipped about
what's going on in the lab, but CEO Rex Tillerson says projects include work on carbon
sequestration that could reduce greenhouse gas emissions from burning coal and a technology
for much-improved car mileage.
No. 36: HSBC HOLDINGS
Thanks to its wide reach in emerging markets—HSBC does business in 83 countries—the London-based bank soared in 2008. Its foray
into subprime loans in the U.S., though, showed the peril of pushing too far.
No. 35: ARCELORMITTAL
CEO Lakshmi Mittal blazed a trail as he assembled the first truly global
steelmaker. But even a lean structure and low-cost mills aren't enough to
offset a plunge in industrial output and steel prices.
No. 34: VIRGINIts roots may be planes, trains, and music, but Virgin's future encompasses everything from biofuel to space tourism. Virgin's edge
across its businesses is a relentless focus on wowing customers and its marketing
panache.
No. 33: INTELThe chipmaker set the computer industry
on its ear with its low-cost, low-power Atom processor for discount-priced, Web-centric
machines called netbooks. Now Intel is taking aim at consumer electronics and
mobile devices.
No. 32: CISCO SYSTEMS
Cisco came to its networking industry dominance mostly by grabbing market share during downturns. It is poised to score again:
The company has more than $30 billion in cash for acquisitions.
No. 31: FORD MOTOR
Ford is swiftly bringing new electric and hybrid vehicles to market, while also delivering a new generation of
smaller engines that save big on gas while not sacrificing horsepower.
No. 30: VERIZON COMMUNICATIONSCustomers rank Verizon as the best
wireless network in the U.S. To offer faster service, the company is rolling out Internet broadband and TV services, followed by a fourth-generation wireless network in 2010.
No. 29: DAIMLERThe German carmaker was caught off guard by a shift to smaller SUVs. But in a display of
design and engineering prowess, Daimler used components from the Mercedes C-Class sedan to produce the elegant new
GLK sport-ute in record time.
No. 28: TELEFÓNICAThe Spanish phone company is reaping
rewards from smart and timely dealmaking, including acquisitions in Latin America and
an agreement to distribute Apple's iPhone in 16 countries in Europe.
No. 27: LGTo turn itself into a trendsetter, LG has
poached top talent from the likes of IBM, Hewlett-Packard, Pfizer, and Procter &
Gamble. High on the new team's agenda: standardizing the hodgepodge of processes and systems that LG has developed around
the world.
No. 26: INFOSYS TECHNOLOGIES
Of all of India's IT giants, the tech-services outsourcer has been the most conservative
when it comes to acquisitions, giving it plenty of cash to spend now if it chooses.
No. 25: VODAFONESpurred by the rapid growth of Internet apps
for mobile devices, the world's largest wireless company is reaching out to new
partners and finding that open innovation can help it create services and markets faster
than it could on its own.
No. 24: COCA-COLAOnce criticized as dull, Coca-Cola now sells more than 2,800 products globally, with such additions as ready-to-drink canned coffee and
a pomegranate/passion fruit tea. Diet soda Coca-Cola Zero had 36% volume growth in
2008.
No. 23: AT&TWith its Apple iPhone deal, AT&T is the envy
of wireless telecom. A Starbucks venture makes it the biggest U.S. provider of Wi-Fi
hotspots. Its focus now: smartphones, digital cameras, and netbooks to link the Web to
mobile users anywhere.
No. 22: HONDA MOTORLike all carmakers, Honda is hurting, but its
commitment to eco-tech remains. The battery for its Insight is now more efficient, cutting the
cost of the gas-electric system by 40% and allowing Honda to offer an affordable Prius
rival.
No. 21: WALT DISNEYUnder tech-savvy CEO Bob Iger, Disney has become a first mover, streamlining its studio
and using iTunes to show its movies. Disney.com now features a Fairies avatar game, a favorite of girls. Next up: an XD
channel for teen boys.
No. 20: BMWInnovation is easier if you still have cash for R&D. CEO Norbert Reithofer began slashing costs well before the recession fully hit. Now the Munich-based carmaker has the luxury
to invest in new technologies such as electric vehicles.
No. 19: McDONALD'SA half-century after Ray Kroc opened his first
McDonald's, you can still order a cheeseburger and fries for a buck each. Yet
as tastes change, Mickey D's updates everything from its interiors to its menu.
Premium coffee, anyone?
No. 18: VOLKSWAGENVolkswagen has gained on other carmakers
with affordable options such as electronic parking assistance for mid-priced vehicles. With eight other brands, including Audi, it's No. 1 in Europe but barely a blip in the U.S.
No. 17: GENERAL ELECTRIC
The $183 billion conglomerate's financial unit has been battered, but GE is doubling down on R&D in emerging markets, with a new lab in Bangalore. GE also is "trickling
up" products designed for the Third World to markets like the U.S.
No. 16: SAMSUNG ELECTRONICS
Despite falling consumer electronics sales, Samsung spends billions of dollars on R&D to roll out ever-faster memory chips and head-turning flat-screen TVs. The rising star also runs one of the industry's best supply-chain
systems.
No. 15: RELIANCE INDUSTRIES
The $35 billion oil-and-gas company is known for executing world-scale projects frugally and on time. Reliance also enjoys
huge profits: It refines the lowest-grade crude oil to earn fatter margins than rivals
like Shell and Chevron.
No. 14: SONYAfter a management reorganization in
February, Sony is directing its core consumer electronics divisions to model
themselves on the PlayStation unit, which began with video games but now has movies, music, and social networking
No. 13: TATATata can still dazzle, even if its takeovers since
2007 of steelmaker Corus and Jaguar Land Rover look ill-timed now. After making Asia's
fastest supercomputer, the $85 billion company just launched a $2,000 minicar, the Nano.
No. 12: PROCTER & GAMBLE
P&G stresses what CEO A.G. Lafley calls game-changing innovation, investing more than $2.2
billion in 2008 in consumer-focused improvements—beyond that of any competitor.
No wonder than most of P&G's brands are category leaders.
No. 11: AMAZON.COMOnce chided for his R&D spending, CEO Jeff
Bezos has turned Amazon into a hyperefficient online mall known for its
discounts and service. It also leads in cloud computing and e-books, thanks to its Kindle
reader.
No. 10: WAL-MART STORES
Wal-Mart's supply-chain knowhow has helped it lower prices. Now the discounter is using technology to pioneer digital health-record
systems, energy-efficient stores, and a social networking platform dubbed "elevenmoms."
No. 9: NOKIAAfter the iPhone stole share among high-end devices, Finnish mobile-handset maker Nokia
quickly replied with a line of touchscreen products that's selling well in Europe and
Asia, allowing it to remain the world leader in cell phones.
No. 8: RESEARCH IN MOTION
With shipments of BlackBerrys up 85% in 2008, RIM is champs in wireless e-mail.
Opening a new front in its rivalry with Apple, RIM just launched its own app store where thumbers can buy outside software for their
devices.
No. 7: HEWLETT-PACKARD
Tech's foremost cost-cutter, CEO Mark Hurd has helped focus HP's research labs.
The printer, PC, and services units get more from R&D, as two-thirds of that
budget goes to practical advances such as touchscreens.
No. 6: IBMPositioning itself for the future, IBM is focusing on the "Smart Planet"—how
sensors, data analysis, computers, and networks can be joined to improve the
performance of everything from transportation systems to electrical grids.
No. 5: NINTENDOMario the plumber has been a fixture in
Nintendo video games for decades. But the company regularly updates the franchise with
new titles. Its Wii broadens video games' appeal by making them easy for people of all
ages to play.
No. 4: MICROSOFTDespite powerful rivals, the software giant
keeps on swinging. Although its plan to buy Yahoo! was scuttled, Microsoft
unveiled a slew of "cloud" offerings so Windows operating system users can meld their PCs more easily with the
Internet.
No. 3: TOYOTA MOTORPriding itself as the green leader among
carmakers, Toyota will roll out a roomier Prius this spring. Getting 50 mpg, the new model is more powerful and has solar-powered AC to keep the interior cool when the car is parked
outside.
No. 2: GOOGLEAlthough it dialed back as business slowed,
the search giant keeps pumping out new services such as Google Voice, which lets you
have one number for all your phones, and a way to target ads based on Web-browsing
behavior.
No. 1: APPLEApple polished its revolutionary image in
2008 with its online iPhone App Store. While its Mac and iPod expand share, success in the supposedly mature cell-phone market is one of the greatest achievements of CEO
Steve Jobs