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Fintech 14 Feb 2017

Three great innovative companies that you wouldn’t expect

Apple, Google, Microsoft are Samsung are just one of the most obvious names that spring to mind when speaking about innovation. However, other companies are proving that innovation is not the exclusive hunting ground of the big guns of the digital economy.

Apple, Google, Microsoft, Amazon, Samsung, Toyota…. If we were to ask anyone about global innovative companies, these names would surely be among first ones to roll off the top of their heads. Boston Consulting Group’s eleventh edition of its Most Innovative Companies also crowns these companies, with Apple and Google taking the two topmost positions.

The study takes into account the findings of a worldwide survey among senior executives from companies engaging in all industries. But it is not based on opinions only. The end result also takes into consideration the economic performance of the companies over the last three years and weighs in the votes of the executives depending on whether they do or do not talk about their competitors in the sector.

innovation liders boston consulting

Leaders in innovation and technology

Despite the lack of surprises at the top of the ranking, the study does offer examples of great innovative companies that do not fit in the stereotype. They do not belong to the most cutting-edge industries, and their product and service launches don’t get nearly as much media coverage as the former’s do. However, BASF, Under Armour and Johnson&Johnson are three of the world’s leading innovative companies.

Turning sweat into data

Report co-authors Michael Ringer, Andrew Taylor and Hadi Zablit , consider that “Calling Under Armour an apparel company is somewhat akin to saying that Apple is a hardware company.” The sportswear company born 21 years ago in Baltimore, United States, “uses technology in all aspects of its business,” innovating on the idea of making athletes better. This approach has led it from the high-performance fabrics that were the company’s genesis, to its current push to build a comprehensive range of connected fitness tracking devices and apps.

The company has created a specific division, Under Armour Connected Fitness, for this new branch of business, which combines sports, fashion and data. The goal is clear: the company founded by Kevin Plank, a huge football fan, has spent recent years going on a $710 million shopping spree, taking over a series of fitness tracking and health monitoring apps, such as MapMyFitness, MyFitnessPal and Endomondo. And Under Armour’s UA Record hub, a 24/7 connected health and fitness community, already has 175 million registered users.

The key to Under Armour’s success – with sales of $4.7 billion in 2016 – is that data is at the center of everything they do. They use them not only to improve their business, products and services, programs but the company has even launched an adjacent business that offers other brands access to its fitness community. Under Armour innovates, but at the same time knows that it cannot forget about traditional marketing practices in its sector. That is why it is moving quickly and aggressively in the world of basketball, closing stellar deals, such as its sponsorship with Stephen Curry, one of the biggest stars in the NBA.

Three tools for one goal

Probably the first thing that comes to mind when thinking about Johnson&Johnson is its shampoo for kids. Although it still produces the product, today, the heart of the U.S. company beats to a different drum: medical drugs and products.

In this business, innovation is key, but requires a clear strategy. According to Paul Stoffels, the executive vice president and chief scientific officer, there are at least three reasons for J&J’s innovation success: “We focus on high-impact medical breakthroughs; we give equal weight to internal and external innovations, realizing that we are not the only smart people out there; and we make sure that innovation programs are strategically aligned with the company’s business objectives.”

Johnson&Johnson relies on three vehicles to promote external innovation: incubators for young ideas, innovation labs for companies that are looking to mature, and venture capital when the constraints are related to funding. The organization has a total of six incubators, all of them in the North America, providing services for 150 carefully selected businesses: in average one of every ten businesses they examine meets their requirements. It also has six innovation laboratories, providing services for companies that are just entering clinical development and a venture capital arm that has more than 80 investments in young companies.

Boston Consulting Group consultants highlight one virtue of Johnson&Johnson’s innovation policy: unit leaders are equally rewarded whether innovation originates inside or outside the company. On the opposite end of the spectrum, the report mentions the case of a “large pharmaceutical company that resisted licensing a new molecule because they had been working along similar.”

Innovation is also ‘out there’

Boston Consulting Group analysts emphasize a very particular aspect of BASF’s innovation policy: its ability to find opportunities and detect trends outside its operations. For that purpose, the company has set up a specific subsidiary, BASF New Business, which not only tracks down what is happening in the industry, but also in society, and analyzes how potential new business areas can fit with the company.

For the report’s co-authors, is a prime example of how multiproduct, multinational organizations manage to keep the innovative lifeblood flowing. And the German company is working in several areas and for several customers, with a low profile for the general public: The company is behind a broad range of innovations, including a new shock absorption system for Adidas and a drought-resistant strain of corn. Currently, a sizeable portion of BASF’s efforts are focused on batteries for electric automobiles.

These three companies are clear exponents of how innovation has a place in any company in any industry, and can contribute and facilitate success in any company.

*If you are interested in fintech and innovation, connect with BBVA at LinkedIn to get related information on similiar topics.

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