These and the rest of the top 50 focus on gleaning insight from Big Data. They analyze both structured data, including information pulled from their customer databases, as well as unstructured data from social media sites, Internet blogs and other sources, to determine what customers and prospects really want. They then launch products and services to specifically meet those needs. And their strategy has been working.
A prime example is Amazon. By analyzing its 150 million-plus customer database—“one of the biggest and most valuable databases of consumer information,” the company successfully rolls out new products and services “with almost frightening speed,” the report authors write. Notable products and services include the Kindle e-reader, Kindle Fire tablet, the Amazon Fire Phone, Amazon Prime, AmazonFresh, and Subscribe & Save.
Other characteristics of top innovators, according to BCG: they have strong innovative cultures and processes; they cast a wider net for ideas; innovation is constantly communicated by the CEO and all management; and it’s top of mind on employee performance reviews for bonuses and other rewards.
Such companies also have strong processes that strive for speed and both embrace and manage failure—leading to strong performance, strong corporate governance and a dedicated budget for venturing and testing concepts. They also constantly measure the impact of ventures, using metrics that tie back to the bottom line.
The firms that made Fast Company’s list of the 50 Most Innovative Companies—which includes Google, Dropbox and Airbnb—expect exceptionalism from their workers. Also, “making money matters.”
Bruce Nussbaum, author of “Creative Intelligence,” wrote in Bloomberg Businessweek about how innovators like Gap are using design strategy and metrics to launch more successful products. Such firms first observe customers before they try out new ideas—for example, Gap redesigned its dressing rooms to be larger after it observed that most of its shoppers came in pairs or threesomes to its stores.
Innovators also build prototypes to make quicker launch decisions, develop organizational processes for continuous innovation and, perhaps most importantly, create feedback loops using “innovation metrics,” such as CENCOR—which stands for calibrate, explore, create, organize and realize.
But mostly, it’s all about fostering an innovative culture, says Soren Kaplan, author of “Leapfrogging,” which involves six steps, including creating a structure for unstructured time, and knowing when to “step back.”
For example, 3M and Google give their employees free time to experiment, while software company Atlassian gives workers paid time off in “FedEx Days,” in which they present solutions to any problem they want to tackle and resolve within 24 hours.
Strong innovators also know when to step back and not “over-engineer” the innovation process, Kaplan writes. Companies wanting to foster an innovative culture give “just enough structure and support to help people navigate uncertainty and tap into the creative process without stifling.”
Before you leave this article, jot down all the ideas you’ve generated to make your company more innovative. Then, share your existing innovative strategies with others in the comments section below.