• Apple, Alphabet, Amazon, Microsoft, and Tesla are considered the five most innovative companies, according to BCG’s analysis of the 50 most innovative companies of 2021
• Abbott Labs, AstraZeneca, Comcast, Mitsubishi, and Moderna join the top 50 most innovative companies for the first time this year
• The fastest movers include Toyota, who jumped from 41st to 21st; Salesforce, who jumped from 35th to 22nd; and Coca-Cola, who jumped from 48th to 28th
• 90% of companies that outperform on innovation outcomes demonstrate clear C-suite ownership of the innovation agenda

These and many other insights are from the Boston Consulting Group’s (BCG) 15th annual report defining the world’s 50 most innovative companies in 2021. BCG surveyed 1,500 global innovation executives and found a 10% point increase, to 75%, in executives reporting that innovation is a top-three priority at their companies today. That’s the most significant year-over-year increase in the 15 global innovation surveys BCG has conducted since 2005. BCG’s Most Innovative Companies 2021: Overcoming the Innovation Readiness Gap is available for download free here (28 pp., PDF).  This years’ report methodology focuses on identifying the factors causing a large innovation readiness gap between the world’s most innovative companies and their peers across industries. Please see page 23 of the study for the methodology.

Key insights from BCG’s most innovative companies of 2021 include the following:

Creating a new COVID-19 vaccine in less than a year, inventing test kits in weeks to protect public health, and redefining online shopping and safe home delivery reflect the versatility of the world’s most innovative companies in 2021

Pfizer, Moderna, and Merck & Company’s innate ability to innovate gave everyone a decade of their lives back. Delivering a vaccine in a year when the initial projection was a decade reflects the innovative efficiency of these companies. 2021 is the first year Abbott Labs, who invented and scaled the production of COVID-19 test kits, is included in the 50 most innovative companies worldwide. Amazon and Walmart’s logistics and eCommerce expertise helped ensure safe online shopping and fast home delivery was available to millions of people under stay-at-home orders.

Five factors most differentiate the most and least innovative companies

The basis of BCG’s methodology to identify the 50 most innovative companies in 2021 centers on their innovation-to-impact (i2i) framework. The framework is designed to help companies measure the readiness of their innovation programs to operate at a consistently high level of efficiency and effectiveness. The BCG i2i scoring system identified five factors that most differentiate innovative company leaders and laggards. The five factors that best indicate how innovative a company has the potential to be are shown in the following graphic:  

Lack of collaboration between sales, marketing & R&D is the major obstacle to innovation

31% of all companies surveyed see poor collaboration between marketing and R&D as the most significant obstacle to improving the return on their innovation investments. According to BCG, the collaboration between marketing, sales, and R&D is the most challenging in the Pharmaceutical industry, where 42% of respondents say it’s the biggest hurdle to achieving more significant returns on innovation.

Digital transformation of the core business is now a top priority for 75% of CEOs, and 65% of firms are doubling down on their plans for transformation with renewed urgency

BCG identified six success factors that together—and only together—flip the odds of digital transformation success from 30% to 80%. Those six success factors are close integration of digital strategy with the business strategy, commitment from the CEO through middle management, a talent core of digital superstars, business-led and flexible technology and data platforms, agile governance, and effective monitoring of progress toward defined outcomes.

Conclusion

Companies that know how to collaborate quickly between customer and R&D teams have an inside edge on being innovation leaders. The world’s most innovative companies also have senior management teams committed to the long-term success of nascent, unproven programs. There’s greater tolerance for risk, more of a focus on customers first and innovating around their needs, and an intuitive sense of how to close innovation gaps that hold other companies back. 

The post The Most Innovative Companies of 2021 According to BCG appeared first on Software Strategies Blog.

Main picture credit: Boston Consulting Group

Want to find out more about topics like this from industry thought leaders? The Cloud Transformation Congress, taking place on 13 July 2021, is a virtual event and conference focusing on how to enable digital transformation with the power of cloud.