- Apple dethroned Alphabet as the most innovative company out of 50 innovative companies, while Google’s parent company slipped into second place, according to BCG.
The BCG’s most innovative ranking of companies is focused primarily on a survey of 2,500 global innovation executives (level 63 percent C, 37 percent senior vice president or vice president) who were interviewed from August 2019 through October 2019. We measure the performance of companies on four dimensions, then take an average of normalized scores to determine the overall ranking. This year, as noted in the text, we added a new scoring dimension that captures the variety and intensity of boundary-breaking of each company by assessing its ability to break established barriers to industry entry and play outside of its own in a range of markets. These four dimensions are:
- Global “Mindshare.” Number of votes from all executives of global innovation.
- Peer view of the industry. The number of votes cast by executives in the industry of a company itself.
- Disruption to industry. Voting across industries is the Diversity Index (Herfindahl-Hirschman).
- Creating Value. The TSR included equity buybacks (three years) from January 2017 to December 2019.
The report found that commitment to innovation has dropped from 79 percent of executives in 2019 to 63 percent of executives in 2020 who see it as a priority – resulting in the challenge of making success repeatable, even the most innovative companies, and a drop in rankings.
Apple dethroned Alphabet as the most creative company out of 50 innovative companies, while Google’s parent company slipped into second place. Amazon went down one, in third place ranking. Although IBM and Facebook also moved down a couple of notches, they maintained their top 10 positions. Microsoft, Samsung & Huawei grabbed the 4th,5th & 6th place respectively, among which Huawei is a new entrant to the list. Alibaba, IBM, Sony & Facebook take the rest spot of 7th,8th, 9th & 10th.
Of the 162 companies that have been on our top 50 list over the past 14 years, almost 30 percent appeared only once — and 57 percent appeared three or fewer times. Every year, only eight companies made the list: Alphabet, Amazon, Apple, HP, IBM, Microsoft, Samsung, and Toyota.
No Middle East and African (MEA) company are on the list in 2020, with Saudi Arabian oil firm Saudi Aramco currently being the most innovative company.
Innovation in the area is not yet at the top, according to the study, and there are great opportunities to be explored.
While 66% of MEA executives see innovation as a top-three priority, only 45% align that ambition with commensurate spending on innovation. Those are twice as likely to outperform. Around 25 percent of businesses are explicitly misaligning ambition and expenditure, the report states.
BCG says it presented a series of pointing questions to the respondents, each concentrating on one of the 10 basic elements of the company’s innovation program.
Innovation is a top-three management priority for nearly two-thirds of businesses according to the report. This is the lowest level in 2009 and 2010, since the financial crisis.
While many companies struggle to tackle multiple challenges of innovation at once, committed innovators prioritize a handful and, as a result, tackle them more effectively.
You can find the whole report here.