Fwd: Rev your innovation engine

--- Forwarded message ---------

From: Boston Consulting Group

BCG's 2023 Most Innovative Companies

View in browser Leadership by Design June 2023 What You Can Learn from Innovation Leaders The Premise The connection between innovation and both growth and advantage is becoming stronger than ever. The winners understand this and invest in their innovation engines accordingly. The laggards struggle to make headway beyond incremental improvements. How can a company become a successful innovator? The Solution 01. Recognize the value of innovation The evidence is mounting: companies that both prioritize innovation and ensure they are ready to act are widening the gap over less capable competitors. Winning firms are consistently delivering new products, entering new markets, and establishing new revenue streams. The big story, though—this year and for most of the past decade—is that innovation drives performance. Since 2005, our portfolio of the 50 most innovative companies has outpaced the broader market in shareholder returns by a significant margin: an average of 3.3 percentage points per year. Read more → 02. Understand the critical elements of innovation success Innovation leaders learn how to allocate resources based on the outcomes they want to achieve—for both internal and external initiatives and for both short-term gains and long-term growth. To overcome barriers that could stand in the way of successful innovation, companies must strategize (setting a vision and linking goals to strategy), create and scale (building an ecosystem for expanding ideas into real businesses), and accelerate (using technology, people, and governance to expand innovation-related capabilities). Read more → 03. Don't let a downturn deter you During the 2009 downturn, only 58% of companies planned to increase spending and almost 15% expected to cut innovation investment. But what's going on in 2023? This year, 79% of companies see innovation as a top-three priority—15 points more than in 2009—and 66% plan to increase spending, 42% by more than 10%. As growth has slowed in core markets, the importance of new products and services that carry companies into new markets with new business models has increased. Digital opportunities and the sustainability imperative are two key forces driving the change. Read more → 04. Bet big—but carefully—on AI The question isn't whether AI can have an impact. It's more a matter of whether companies are using AI properly and for use cases that have the potential to drive real business value. The varying results that companies are achieving so far with AI further increase the distance between organizations that have well-functioning innovation engines and those that do not. Indeed, given AI's transformational potential (which anyone can experience by taking ChatGPT for a spin), failing to master the technology could ultimately prove fatal to a firm's innovation program. Read more → The best innovators develop a self-reinforcing, virtuous cycle. Once the innovation cycle starts, it creates its own momentum and produces transformative competitive advantage. Michael Ringel Managing Director and Senior Partner Further Reading 17 Years of the Most Innovative Companies Innovation Strategy and Delivery Business Resilience in Times of Uncertainty Build for the Future The Insider's Outlook Subscribe for unique viewpoints from BCG experts on the critical issues, challenges, and changes facing leaders today. SUBSCRIBE Boston Consulting Group 200 Pier Four Boulevard Boston, Massachusetts 02210, USA