This is part 2 of the review for The Boston Consulting Group’s The Most Innovative Companies 2020. If you are interested in part 1, please go to the previous post.
The size does not matter
Another interesting finding from this report is that the size of the company is less important than we generally think. We tend to think small companies make innovations, but large companies gradually gain the capability of managing innovation. It is, however, obviously not all large companies.
What makes the difference between innovative large companies and the others? The first thing they point out is that culture does not seem to be the main factor. While they admit that measuring corporate culture is very complex, they cannot find distinctive cultural differences between innovative and non-innovative companies.
Prioritising business model innovation
Instead, they identify two things. One is the difference in their priorities. The innovation leaders tend to prioritise business model innovation more than the laggards. They say, “Innovation at the business model level—to defend existing profit engines, to imagine entirely new offerings in response to emerging customer needs, or to adapt current business models to ongoing shifts in the business environment—can provide an important edge, particularly in turbulent environments” (p.8). More or less, this suggests innovation is no longer simply making new products or services but it requires considering new values from various points of view.
Designing innovation systems
The second is how to design their innovation systems. They list up five key aspects:
- Talent
- Ambition
- Governance
- Funnel management
- Project management
Talent – You need to attract best people to join your innovation teams.
Ambition – You need to align your company’s visions and resources for innovation.
Governance – You need to govern the relationship between internal and external resources as well as innovation projects and core business.
Funnel management – You need to have innovation funnels in a good balance with high-quality decision making through assessing and reviewing the funnels.
Project management – You need to have good innovation teams with small but diverse members.
The findings indicate that we cannot make excuses by the size of our company, and also systematic and business model approach is required to be more innovative as an organisation.