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Fri March 29, 2013
Who's on Top? Ranking Business Innovation
If you were going to rank companies based on innovation, rather than size or net worth, where would you start? Hal Gregersen, co-author of “The Innovator’s DNA” and Forbes’ Most Innovative Companies and professor at INSEAD, shares his methodology.
- Hal Gregersen: co-author of “The Innovator’s DNA” and Forbes’ Most Innovative Companies and professor at INSEAD.
What if the way that we judge companies is all wrong? Business leaders and media giants have long cited Fortune 500 rankings as the arbiter of a company’s success — but those rankings focus solely on size. But in the age of apps and startups, size may not be the best indicator of influence. Instead it’s often innovation and creativity that determine which company will produce the next big idea.
But how can you possibly rank an organization's creativity? Hal Gregersen, co-author of “The Innovator’s DNA” and Forbes’ Most Innovative Companies, set out to answer that question. As it turns out, to be innovative you need a willingness to take risks, a knack for open communication, and a desire to stay on the cutting edge.
Leaders in Innovation
So which business leaders are willing to take risks? Gregersen puts Amazon CEO Jeff Bezos near the top. Back in the 1990s, Bezos noticed the fast growth of the Internet and took a gamble that selling books online would work. Now, decades later, he encourages the same kind of risk taking among his employees.
“He is an experimenter,” Gregersen explains. “Jeff told us, basically, that [his] job as the CEO and founder of this company is to create an environment where not hundreds, but thousands, of experiments flourish … So the whole notion of Amazon’s being able to link different kinds of books to your most recent purchase, or videos, or whatever — that came from an experiment, from an employee just trying something out.”
Having open communication throughout the company is also vital in boosting innovation. Gregersen cites Scott Cook, Founder of Intuit, as a leader who works to promote discussion. Cook keeps an open dialogue with his employees by constantly asking, “Why?”
“[At Intuit] they were giving people time to innovate, but people weren’t taking the time,” Gregersen says. “And so they realized…the fundamental reason behind [employees’] not spending time innovating throughout the company — they simply didn’t schedule time in their calendar. Who would have guessed?”
Intuit doggedly asked employees what kept them from taking time to work creatively. And once they figured out the problem, they implemented an easy solution: encouraging everyone to set aside time for innovation in their weekly calendar.
Perhaps surprisingly, Cirque du Soleil also ranked among Gregersen’s most innovative companies. Why? Because it’s founder, Guy Laliberté, is constantly searching for new ideas. While his company is working on one production, Laliberté travels across the world looking for inspiration, constantly communicating his findings to his team at Cirque du Soleil headquarters.
“Guy Laliberté will not do a new show in a new place if it’s a repeat,” Gregersen says. “He only wants to do things that are new and different — so he does this himself.”
Not All Companies Innovate
Of course, Gregersen’s list also had some losers, including big companies like Samsung, Honda and Toyota. Gregersen explains that it’s not that these companies aren’t creative at all — it’s that they aren’t creative enough.
“They haven’t put together new ideas that are fundamentally disruptive and change the terrain,” he argues. “The leaders of those organizations, they simply don’t value innovative actions enough to do it themselves.”
Unfortunately, Gregersen doesn’t have a magic formula for becoming the sort of innovative leader that could bring Samsung, Honda, or Toyota back to the top of the list. But he does recommend one key ingredient: time.
“Ideas that change the terrain and the surface of the world we live in don’t happen overnight,” Gregersen says. But, if you persevere, you might truly alter the landscape.