The top 100 most innovative companies (BW)

BusinessWeek Online has just posted their top 100 list.

The rankings were determined by votes from 1000 executives from large corporations: probably not the the best folks to make rankings like this, but it is the audience of the magazine, so there you go.

The top 5 are:

  1. Apple
  2. Google
  3. 3M
  4. Toyota
  5. Microsoft

More curious is their abuse of the word innovation:

Today, innovation is about much more than new products. It is about reinventing business processes and building entirely new markets that meet untapped customer needs. Most important, as the Internet and globalization widen the pool of new ideas, it’s about selecting and executing the right ideas and bringing them to market in record time.

Since when does selecting ideas and bringing them to market on time have anything to do with innovation? Don’t these things apply to running any kind of bussiness at any time?

Specific to their list, Google is in the search engine and advertising business (at least that’s their largest current revenue) – which are entirely old markets: at least a decade old. Apple’s ipod was not even close to being the first digital music player – and the market, personal music players, is also years old. Shouldn’t the first search engine and the first digital music player get the lions share of innovation credit?

Or perhaps a better question: is there a way to seperate out innovation, which should be hinged on development of new ideas, from execution, which is delivering a good, timely product to market? Lists like this one entirely confuse the difference between these two concepts.

9 Responses to “The top 100 most innovative companies (BW)”

  1. J. Heijmans

    Of course it’s a matter of definition, but to me innovation can be making something entirely new (the first search engine, the first digital music player), as well as taking an existing product and making major changes. Both Apple and Google have taken new directions for existing products (and both have been highly successful with them).

    Both new products and product “make overs” deal with development of new ideas, their scope is just different. Changing existing products may seem less innovative because you build on stuff that’s already there, but new products also make use of existing ideas and products. The MP3 player clearly builds on portable music players (Walkman, Discman, etc.), while the search engine (in a way) no more than a successor to the library card index, or any search operating on digital files. Simply put, the new products came to be by inserting new technology (digital music, the web) into existing products.

  2. Peter Becker

    As much as I hate the inflation of use of the word “innovation” I have to disagree that it is abused in the case of Google or Apple products. I must admit I wasn’t that sure about my rusty old latin, but it seem my first translation “renewal” was correct: (bad UI, but I assume the content is ok ;-) ).

    Dictionary entries from Google are a bit of a mixed bag, but some do support that notion.

    This one seems a good reference.

    Taking the extreme position one could actually claim that using “innovation” in the sense of “invention” is not correct ;-)

  3. Scott (admin)

    Fair enough – innovation is not the same as invention. But taking the case of the ipod for example, I think it’s more accurately described as a highly innovative 2nd or 3rd (or 4th if you include the Walkman generation) generation of a product type.

    I like what Heijmans said – that there are different scales of innovation: whole markets, product lines, products, parts of products, parts of parts of products, etc. And depending on what scope you’re looking at, innovation has different relative meanings.

  4. bleh

    I think the reason that the above definition of innovation is being used is because our (as outsiders) perception of innovation depends heavily on the end results – which in turn depend on the execution.

    In other words, delivering innovation is far more difficult than merely innovating. And thats why companies that do so are regarded highly.

  5. Alex Shapiro

    I tend to agree with Scott on the usual abuse of this particular word and of words in general. More often then not “trendy” words like synergy, paradigm, breakthrough, innovation, etc… are used by “copy people” because these words lend a certain air to the stuff they are pushing. That happens exactly because of constant use and abuse of the words where people stop thinking about the meaning of the words and interpret them in light of their most often use. So in a sense the more you abuse the word the more you change its meaning in public perception of it.

    A case in point: How often do you hear or read all kinds of advertisers use the word “ubiquitous”? By now most people think that it means something like “pervasive” or “indispensable”, while all it means is omnipresent. I hear people misuse the word all the time at meetings and papers. This word becomes almost filler for when you need to say something impressive…

    Even though I do agree that Google is really an innovative company, by now it’s no surprise to anyone, the interesting part is what exactly makes Google, or any other company truly innovative.

  6. Lucia

    Geez this article has been haunting me.
    Scott… to an extent I agree with you and with everyone else.

    It made me furious when I read the report stating that Rome was a perfect place for this forum to be held because it “was, after all, the birthplace of the Renaissance, another period of great innovation and change”. When I think of great innovation I don’t think about search engines and ipods, because, as much as these things are such a huge part of my life, I love both, I live and breath and applaud them… I don’t consider them to be innovative as to the extend that the definition exists in my head.

    However… I do understand that the definition exists on so many levels… but in the every day perception of people … I assume they perceive it with the same definition that I do “doing something for the first time” – but I see it as “really – the first time”

    but… then their is the whole concept of everything comes from something else that already exists – perfecting or improving I guess you could say.

    Wow – it is a hard one – I’m going back and forth… but so much about that article made me cringe… I usually have to go with my first instinct, which is innovation is on a grander level then that of these companies.

  7. kareem

    There’s a BusinessWeek article by John Hagel & John Seeley Brown from a couple of months ago that talks about this:

    Innovation — the ability to create and capture economic value from invention — is what really drives both the economic prosperity of nations and the shareholder value of corporations.

    Innovation isn’t just confined to commercialization of new products. It can also build upon creative new practices, processes, relationships, or business models, and even institutional innovations such as open-source computing — invention occurs in all these domains. And while breakthrough innovations can generate significant economic value, sustaining that value requires a capacity for continual incremental innovations.

    I’d recommend you talk to Hagel for your upcoming book–he’s got some fascinating things to say about how strategy is shifting from the core to the edge of a firm. Hagel’s blog is here:


  8. Jason Luther

    One perspective on the iPod is that Apple’s innovation is the combination of iTunes, the music store, and the device. They created a complete digital music solution that is pretty simple to use. A lot of innovation comes from seeing a new whole out of pieces that are already there.

    I also think that execution is part of innovation. The end product is what’s important, and if you can’t get that product into the hands of the people who want it, you’ve failed. In that vein, Edison didn’t just invent the light bulb—he developed power distribution systems so that people could use the light bulb.

    I guess I don’t always think of innovators as the ones who are necessarily the first to market—they make the best in the market.


Leave a Reply

* Required