The BBCs series “Dragons Den” is all about innovation. We all recognise innovation when we see it: Microsoft, Virgin, Apple, Sir Alan Sugar, Sir Clive Sinclair, Dysons latest ball vacuum cleaner, Apples iPod, but why is this such a difficult area of business for companies around the world to deliver on?
Companies striving to become the most admired company in the world, seek it through great service and innovation. Large companies seek to launch new technology businesses that create markets and money. However, innovation is a difficult thing to do well. Their are pitfalls, which could lead to the most hated company.
The companies carbon footprint and how many trees it uses from the Amazon forest may be how the public perceive it. Operational efficiency and driving costs down can often create a brick wall for innovation.
For these reasons, companies are interested in finding out what separates the very best companies from the worst. Knowing what differentiates world-class companies from their peers really does matter: shareholder returns are drastically higher as well as self esteem.
Previous research themes have included strategy, public relations environmental stewardship and corporate culture.
So what is it that makes the world most admired company stand out from their competition, to win a place on the worlds most admired listing.
First, it is worth looking at what factors didnt differentiate the best from the rest. Perhaps unsurprisingly, there was no difference between the size, age or capital worth of companies. There is no apparent link, reward.
So what are the
Findings identified three key differentiators:
1. Innovation within the corporate culture methodology and practice: organisational identity. The best innovators are much more innovative than their peer groups in using new computer based technologies or creative management to improve their internal effectiveness.
The pursuit of the worlds most admired company seems to start from within, and once in motion explodes a continuous exciting momentum. It releases and feeds innovation to the public: in markets, products and services. Managers and employees within the leading companies are actively encouraged to raise the bar by innovating in areas of current strength. They are made to feel part of a team. And more importantly that the customer is “king”, not an inconvenience.
Another significant finding is that the pace of internal innovation within the best companies is significantly higher than their peer group and that this pace is managed by a collective team effort.
Internal innovation or vision is the first shift: what becomes valued is the possibility of new ideas. A whole agenda of brainstorming ideas is allowed to flow through the company, without fear of ridicle. The story of the architect and owner of a large hotel discussing the ways and means of putting in an elevator, was over heared by a janitor, he said “why not put the elevator on the outside” and thus the hotel became famous for having a elevator on the outside of the building.
2. Also it is not enough to have a vision for innovation there must be action, i.e. words and deeds. Innovation within the best companies is a goal orientated activity, with purpose and this comes down to visionary leadership.
The vision that can clearly identifies the areas in which the company will pursue new ideas and approaches. Then leaders build commitment to generating ideas and ensure action, not words. The saying of: “what you do speaks so clearly that what you say i can’t hear” explains why many conmpanies don,t reach the bar.
This action has been proven from research that providing direction and purpose, but also building shared interest across and within teams and coaching for innovation.
Leaders within the leading companies are acutely aware of the environment they must create to support innovation. They give individuals the authority to take risks, they minimise bureaucracy so that new ideas survive and purposely do not kill off innovation projects too soon.
They are patient about returns, they tolerate failure and they focus on the learning gained from innovation.
3. Lastly, the best companies dont just talk, they actually put the action in to achieve their goals. This is easy enough to say what is interesting is how these companies execute these goals.
Firstly, they have a clearly defined processes for managing investment with new innovations; second, they match decisions on new innovations with their capabilities to come up with the goodies; and third, they manage their staff so they feel part of the team.
Innovation leading companies have clear procedures for selecting the right ideas and for determining the level of investment in those ideas.
Whilst this focus on process is impressive, the leading companies have realised it is not enough. They have raised the expectation of their staff to innovate by encouraging them to change from managing risks to assessing risks and the likely business gain.
The emphasis is placed on transforming ideas into real commercial propositions. Significantly, the key decisions over innovation projects are made at the right level within the company.
To achieve this capability, the innovation leading companies recognise the importance of having the right talent in the organisation. What stands out from the research is that the best companies display high levels of self-awareness about the conditions in innovation-oriented work climates.
They manage their talent accordingly; recruiting, assessing and progressing individuals who have these key attributes; the ability to lead, to foster and maintain social networks, to be commercial, positive and possess the courage of conviction.
Innovation will continue to challenge businesses – there is no easy solution. This research, however, will help clients to zero in on the key factors for creating an innovation culture.
So if we the consumer had the vote who would we vote the the most admired company in the world.