What Makes Apple, Google, TCS Truly Innovative?
Innovation is the key to driving growth, value for shareholders, and competitive advantage – this is something that Indian IT major Tata Consultancy Services (TCS) realized in a big way, as it entered the league of the most innovative companies according to The Boston Consulting Group (BCG) this year - being the only company from India to have received the honor. While in India TCS is leading by example, being one of the most innovative companies that also featured in Forbes’ list of the world’s 100 most innovative companies, experts believe others should follow its footsteps generating big, new growth ideas and demonstrating a strong leadership and staying in power in the market – factors that often lead to innovation and growth.
Another recent survey by the CII and ITC found that “most Indian companies are not engaged in sustainable and inclusive innovations,” even though the report cautions that in the coming years, they may have little choice but to develop innovative capabilities in certain areas.
In this regard, Subroto Bagchi, Chairman of IT services company Mindtree, said in an interview with Business Line, “We often tend to confuse innovation with invention. Thomas Edison’s light bulb is a great invention but “that doesn’t make him a great innovator”. In today’s context, innovation is about the creation of new economic value with breakthrough ideas that will be widely adopted.”
Classic examples of this could be Apple and Google, believes Bagchi and true to his belief, the BCG report mentions some of these companies as the most innovative for this year too, like every year. For example, Apple has been number one every year since 2005.Samsung and Google switched places again at numbers two and three. Microsoft and IBM round out the top five, among technology companies.
BCG survey also asked the 1,500 senior executives across a wide range of countries and industries BCG asked respondents to name up-and-coming companies that are still relatively young to reach the scale of the top 50 global giants, but are making themselves known for innovation. It found out that companies such as WhatsApp, Square, Rakuten and Wipro lead this list.
Companies that are leveraging digital technologies especially mobile, analytics and big data are emerging as truly innovative, found the survey. The report examines that breakthrough innovators excel at the fundamentals that define successful innovation programs. These companies cast a wider net for ideas, they use business model innovation more, and they have cultures geared toward breakthrough success. Almost half of them reported generating more than 30 percent of sales from innovations over the past three years, more than twice the average for all companies.
Innovative companies also have strong support from the C-suite, finds out the BCG survey and it indicates less than 10 percent companies have full-fledged support from the top executives when it comes to embracing a fully digital environment. While less than half of the respondents in the telecom, financial services, pharmaceuticals, consumer products, retail, energy, and manufacturing sectors, among others, said that big data and mobile will have a big impact, less than a third in each sector said that their companies are targeting big data and mobile in the innovation programs.
Long-term advantage and current competitive advantage continue to be the primary goals for innovation investment, with three-quarters or more of respondents focused on these objectives.
“Innovation isn’t getting any easier. Too many companies want to shoot for the moon while their innovation programs are barely airborne,” said Neeraj Aggarwal, a BCG Senior Partner & Director. “It is no longer enough to be good at incremental innovation. A combination of management, governance, and organizational design that can have a major impact on any company’s innovation program - innovators corral them all,” he added.
Rishikesha T. Krishnan, Professor of Corporate Strategy and Policy at the Indian Institute of Management - Bangalore, mentions in his blog some of the reasons for companies failing to put in place a systematic process of innovation. Focusing on Indian firms, he writes, “The reason we haven’t seen a Google or Apple emerge from India is because we tend to play safe and pursue well-trodden paths rather than embrace experimentation. We are unable to scale-up businesses rapidly enough because it’s not easy to get early-stage funding.”
It is again that we bring to focus the example of TCS, a company, which has crossed several paths, exploring huge revenue prospects from the digital technologies stream especially as the company has expanded new markets and entered new industry verticals to reach the heights of innovation. This should be an eye opener for others in the sector who are striving to innovate and need clear pathways to get there.
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