5 Lessons Learned From The Most Innovative Companies In The World.

Posted by: Bruce Nussbaum on April 18, 2008

Innovation in a recession is the overall theme of this year’s Most Innovative Companies survey that BW did with BCG. Delving through the the Q&A with Amazon’s Bezos, the video of P&G’s A.G. Lafley and stories on GE in India, HP labs and Nintendo, I’m culling 5 innovation lessons for people dealing with the current economic downturn.

Here are the innovation lessons.

1-Don’t cut innovation investments to cut costs and save money. This is the classic mistake in a downturn. As Lafley and Bezos point out, innovation is the way to give more value to consumers and bolster pricing in tough times. And as Apple shows, innovation in a downturn prepares the way

for new products and services in the economic recovery. It's the way to pick up market share.

2-Innovate outside the US (outside your home base). GE's reinvention of the electrocardiograph in India to create a $1,500 machine that can be carried from village to village in a back-pack opened up big new markets all over Asia. And it gave GE new capabilities to import back to the US--and Europe and Asia.

3-Business model innovation may be more important than product or service innovation. Tata made it to the TOP 25 Most Innovative Companies list ( (No. 6) because it changed the way it made and sold cars when it created the $2,500 Nano. Using auctions for parts, modular constuction and garages for assembly remakes the entire auto model.

4-Innovation can bring old companies back from the dead. General Motors was No. 18 on the Top 25 list thanks to the Volt electric car and other efforts. It's brand image is clearly much improved--now all it has to do is bring out the car.

5- Innovation is a social system, not a one-off magical moment. View the Lafley interview. He talks about innovation being about culture, organization and leadership, not about a single brilliant scientist or engineer. We have too many CEOs talking about innovation but not implementing it.

Reader Comments

Bruce Temkin

April 18, 2008 6:20 PM

Bruce: Good stuff. In my research (and my blog) I’ve discuss five areas of innovation: Online infusion, service infusion, service amplification, ultrasimplification, and value repositioning. These can be valuable areas to look for innovation opportunities. Take a look at the innovation topic in my blog “Customer Experience Matters.” (http://experiencematters.wordpress.com/)

Chris Loughnane

April 19, 2008 12:45 AM

"Innovation" count - 16
Time to read article - 45 seconds

Do i really need to read "innovation every 2.8 seconds? Maybe...

Ok, so if "innovation wasn't the fun SEO word it is today, what would this list read like?"

1. Don't be penny-wise and pound-foolish
2. Don't limit your market
3. Minimize cost
4. Don't hang on to a dying technology (see: polaroid)
5. People are a product of their environment.


Bruce, I usually enjoy your column, but this time, ironically, it wasn't about innovation. It was about jargon. Gimme some content.


Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation Innovate Innovation

ravi

April 21, 2008 2:27 AM

I am disappointed but not surprised that comments about a bad flying experience could get so much more commentary than these points about innovation. I agree with the need for high altitude manifests but love it when they are followed by supporting content. We created what we feel is a highly relevant innovation resolving a global threat to our forests and are now looking forward to see how well this contribution from Mauget and RKS will be received. It can be seen at:
http://www.rksdesign.com/news/events/Mauget/index.php.

Christa Avampato

April 21, 2008 8:31 PM

I always laugh when I hear that a company has decided to cut back on innovation to save money. To me, that's sort of like saying, "hey guys, we need to cut back on some of our market share in order to control costs." Investing in innovation is like buying a futures option on cool products that have yet to develop.

DT

April 22, 2008 7:33 AM

Great points Bruce, keep it up! Point 1 is why so many companies in Asia don't get it, and wonder what hit them during a down turn.

Mikej

April 28, 2008 11:01 PM

I think that co-creation is something that is growing and will truely be crucial in the ways innovative companies of the future will truely take consumers to the heart of their business. There are quite a few good examples which I have written about some of them here

http://thingsdonotchangewechange.blogspot.com

jay

September 3, 2008 1:57 AM

A site dedicated to innovatively challenged inventions, products and patents.

Send your choice offender limiting image size to under 150K, nothing offensive entering in subject line a short description.

http://www.innovativelychallenged.com

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About

Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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