Innovative companies build innovation cultures: Study

While the buzz has focused on Apple Computer, Google, 3M, Toyota, and

Microsoft ranking as the top 5 most innovative companies in the world, the real

value of the annual collaboration between BusinessWeek and The Boston Consulting

Group (BCG) is not the who's who -- only three new companies made the 2006 list.

The real value is the healthy dose of updated insight available on the state of

innovation at companies worldwide.

BusinessWeek collaborated with The Boston Consulting Group (BCG) to produce

the ranking of the 25 most innovative companies, with more than 1,000 senior

managers responding to a global survey. (BusinessWeek Online also provides an

extended list of the top 100 most innovative companies.) The BusinessWeek-BCG

survey is more than just a Who's Who list of innovators. It also focuses on

the major obstacles to innovation that executives face today. While 72 percent

of the senior executives in the survey named innovation as one of their top

three priorities, almost half said they were dissatisfied with the returns on

their investments in that area.

According to survey respondents, the top two obstacles are slow development

times and lack of internal coordination. Innovative companies build innovation

cultures. "You have to be willing to get down into the organization and

align the nervous system of the company," says BCG senior vice president James

Andrew, who heads the innovation practice at BCG.

"Some organizations are nearly immobilized by the notion that they

can't do anything unless it moves the needle," adds BCG senior vice

president George Stalk. "Fast innovators organize the corporate center to

drive growth. They don't wait for it to come up through the business

units."

The survey's respondents indicated that incremental innovation takes up the

largest share of time and money resources, with 32 percent of resources going to

improving existing products or services, and 29 percent to creating new products

or services for new customers.

Back to the top 25 innovators list: the only new names to make the 2006 top

25 list are IDEA, Target and Research In Motion.

BusinessWeek's special report, "The World's Most Innovative

Companies", is featured in the April 24th issue. BusinessWeek Online

features expanded business innovation content editorial, ranked lists, and

slideshows. As of this posting, the link below opens the special report table of

contents.