Apple and Google took the top two spots, respectively, in the 2014 ranking of the 50 most innovative companies in the world based on research by The Boston Consulting Group (BCG). Interestingly, Apple and Google also ranked as the most valuable global brands in BrandZ’s Most Valuable Global Brands 2014 ranking, but Google outranked Apple in that study.
Let’s take a closer look at the findings.
First, take a look at the chart below, which shows you the BCG ranking of the top 10 most innovative brands of 2014 as well as the top 10 best global brands of 2014 from Interbrand, the top 10 most valuable global brands of 2014 from BrandZ, and the top 10 most valuable brands of 2014 from Forbes. Notice the similarities? It would certainly seem from this data that “best,” “innovative,” and “valuable” go hand-in-hand.
According to Interbrand and BrandZ, both Apple and Google are the best global brands and the most valuable global brands this year. Forbes uses a slightly different methodology to rank brands, and the difference shows in its top 10 ranking. Google isn’t on Forbes’ top 10 list at all. However, the BCG ranking of the most innovative companies also has Apple and Google in the top two spots.
One thing is certain, with so many similarities between these lists, it’s clear that innovation has a direct impact on brand value and brand perception.
What Do Innovative Companies Do Differently?
Based on this data and the findings in the BCG report, there are three key things that innovative companies do differently from other companies which make them more valuable:
1. Innovative Companies Leverage Their IP
The Boston Consulting Group has been developing its list of the 50 most innovative companies on an annual basis since 2005. This year, BCG surveyed more than 1,500 senior global executives and asked them to rate the companies in their industries based on how innovative those companies are. Next, BCG took those survey results and weighted them to account for shareholder growth, revenue growth, and margin growth over the past three years.
Here at Innovation to Profits, we often talk about how important intellectual property is to a company’s innovation and revenue-generation, so we were very pleased to see that the most innovative companies identified in the BCG ranking understood the value of their intellectual property. In fact, the BCG report explains that intellectual property is a key factor that differentiate strong innovators from average innovators or companies that are not considered to be innovative.
The report authors wrote:
Strong innovators’ top management leverage their intellectual property (IP) both to exclude rivals and to build markets. Breakthough companies leverage IP more aggressively and more subtly [Tesla’s decision to open its patent portfolio on electric cars is given as an example]. And breakthrough companies exceed strong innovators in their pursuit of IP-based advantage. They are more likely to use IP to exclude others or gain competitive advantage—and to use IP as a lens for portfolio management.”
2. Innovative Companies View Innovation as a Competitive Advantage
The BCG report also explains that the most innovative companies are led by a team of executives who are committed to innovation because they see it as a source of a competitive advantage. The most innovative companies are often more focused on lean operations. They’re faster, less risk averse, and more collaborative than less innovative companies.
In fact, breakthrough innovators view innovation as an organizational priority for every employee, which leads us to the third factor that differentiates innovative companies from the rest.
3. Innovative Companies Infuse Innovation into Their Company Cultures
Again, we were very happy to see the data and conclusions in the BCG report mirror much of what we talk about here on Innovation to Profits—company culture is critical to transforming innovation into profits.
The BCG report explains that the most innovative companies, “Work hard to make sure that the value of innovation is reflected in their corporate cultures and to see that they are organized to move ideas forward.”
Companies that prioritize innovation and ensure every employee is committed to innovation by making it an inherent part of the company culture reap the rewards. Furthermore, the most innovative companies have something in common—they prioritize, identify, protect, and enforce their intellectual property through integrated intellectual property management because they know it gives them a distinct competitive advantage.
Is your company truly innovative? Are you doing these three things? If not, then you’re not a strong innovator or a breakthrough innovator, and your business results could be limited.
You can follow the links in this article to read all of the reports and see all of the ranking data.
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