Innovative or Overrated?
Visit the following website <WEBSITE LINK> and review the list of "World's 50 Most Innovative Companies". In your opinion, which of these 50 companies are overrated in terms of innovation? Based on your assessment, what shortcoming do you see in FastCompany's methodology for measuring innovation?Please consider these questions and register your opinion as a BRIEF "comment" in response to this post. (Extra Credit: Record a video discussion response.)
While their success is admirable, I think that Chobani is overrated when it comes to innovation. They have made their way into a crowded market, but it's hard to say that they have changed behavior much. They have used innovative marketing and use social media well, but their product is not particularly unique. Overall, Fast Company seems to award some companies for using existing tools in a unique way or diversifying in a surprising manner. I'm not sure that type of creativity has as much to do with innovation as it does with strategy.
ReplyDeleteHave to agree with Brian on this. It seems like Chobani's success is in large part due to the growing trend of Greek yogurt. Also, two success factors noted in the article are Chobani's use of mass distribution and pricing below its competitors. These tactics are more generic than innovative, and lower pricing may be one of the primary drivers of performance. Other points such as unique flavors and packaging can be easily imitated. Fast Company considers Chobani as innovative when the company is essentially utilizing an effective strategy in a growing market.
DeleteWhile the NFL is very popular, I am not quite sure it is any more innovative than any of the other sports leagues out there. The NHL, NBA, and MLB are taking similar initiatives to incorporate their sports into the consumers' lives beyond just the games. The NFL just had a bigger existing fan base to begin with that they can leverage. I also wonder how the innovation is being measured - by popularity or profitability?
ReplyDeleteI agree with Taylor that the NFL is overrated on this list. In terms of popularity, FastCompany takes a very U.S.-centric point of view. They haven't included the NBA on this list, which has experienced huge growth in Europe, Asia, and South America. By utilizing NBA stars to grow the sport of basketball world-wide, they've in turn built their brand as the world's premier basketball league.
DeleteAnother possible flaw in FastCompany's methodology, is a lack of consideration of potential risk. There's a number of examples on the list (facebook & privacy issues), but in terms of the NFL, its increase in popularity has highlighted the dangers of the sport, which in the long-run may discourage athletes from participating. FastCompany rewards quick growth, but is this worth it at the risk of damaging a brand long term?
Viewing Apple as the most innovative company in today’s global business is pretty easy, given Apple’s relentless efforts in branding. No one can argue that the last couple of years have not been a genuine success story for the company – however, I do not feel that Apple is much more innovative in terms of new product development than for instance its fiercest rival Samsung. In my opinion, Apple’s product quality is generally not really superior to the competitors (again, most notably Samsung). Experts view the new iPhone 5 as comparable to Samsung’s new Galaxy S3; Siri has been applauded by customers but lacks general usefulness in daily life and the Apple navigation system has to be considered as an embarrassing flop. In the long run, Apple simply outperforms by its huge investments in branding (leading to the fact that most customers either love or hate Apple’s products) and moreover by its truly innovative approach of combining already existing technologies in new products (with the iPhone as the best example). It is yet to be seen if Tim Cook can really create an organization that can prosper without Steve Jobs’ long-term view and radical customer focus, which are the cornerstones of Apple’s current success.
ReplyDeleteThis is far and away the most over-rated company on this list. And you hit many of the reasons I was going to mention as well.
DeleteWhile people love to wait in line for the newest Apply gadget, none of them have been anything new or amazing since the first iPhone. They're all just minimal increments on the same idea. Samsung is doing it much better and is starting to take some good bites out of Apple's market share.
Over the last decade, UPS has made many changes to help accommodate the e-commerce world. While the My Choice service may appear to be a creative solution, I would not make the claim that UPS is the most innovative company. For years, Fed-Ex has offered a similar service. Both of these companies are creating solutions that evolve from consumer demand. Additionally, with cuts to the USPS, all mail delivery systems will need to adapt their strategies. The company that guides the entire industry may be a better measure for the most innovative, rather than one adapting to competitive forces.
ReplyDeleteWith an impressive 30% increase in sales over the past few years, Patagonia has successfully carved out a niche for themselves in a highly competitive market, that of outdoors/sporting goods. While their recent business strategy of selling more by having consumers buy less is novel and has proven to be successful, I would argue that this has more to do with company strategy than with innovation, as Brian Bailey stated in his above post. The Fast Company article does not mention innovations in relation to Patagonia merchandise, but rather only speaks to the company’s “Common Threads” and sustainability initiatives.
ReplyDeleteI agree with Mary on Patagonia's success deriving more from its corporate strategy than from its innovative tactics. Moreover, I believe while that FastCompany and Patagonia describe the company's innovations in terms of "doing good" and encouraging customers to buy less, the real innovation here is turning something utilitarian, such as a fleece jacket, into something of a status symbol. In this sense it seems that Patagonia's product innovations are not in line with the company philosophy.
DeleteI was surprised to see the Occupy Movement make the list as the 7th most innovative company of the year.
ReplyDeleteThey applied modern technology (i.e. social media) to political protest, which isn't particularly groundbreaking. Fast Company's primary rationale for including the Occupy Movement on the list seems to be that they are discounted or ridiculed by many--hardly uncommon for a political movement.
On a side note, anyone else find it funny that they're surrounded on the list by a bunch of super-profitable corporations?
I could not agree more, Mitch, a #7 placement appears severely overrated. The ideals are not new, nor the combination of resource employment all that unique. Even FastCompany's synopsis of the Occupy Movement is enigmatic: "For embodying all the traits that make a FastCompany." The movement is founded on an almost primal world view and plays out through a peaceful protest (nothing new) mixed with a few elements of social media, most of which are listed elsewhere on FastCompany's list. At this point in history nearly all "social movements"of any type are employing these tactics, so why rate this one so high?
DeleteThis definitely sticks out as overrated and just an odd choice since they're not an actual company but more of a charity accepting donations.
DeleteYes, it appears to be a list of super-profitable companies. I guess that innovation is a prerequisite to have higher-than-average profitability as a company's economic profit will move toward 0 in the long run (Managerial Economics - Luke Froeb) unless it can innovate and create more value to customers. While many names are strange to me, I believe some deserve a spot in this list. Google (with the 80/20 working-time formula to foster innovation), Amazon (setting measureable goals, such as 10% efficiency improvement every year, to force innovation), Apple (creating new trends - although 5 years ago - in smartphone, communication devices) are my examples.
DeleteDropbox is one of the most overrated companies on the list. Some of its main competitors (i.e. Apple, Google, Microsoft) have the advantage of owning an ecosystem that Dropbox simply has not developed. While Dropbox does have the advantage of cross-platform accessibility, it seems that users are trending more towards using one platform for convenience, compatibility, and efficiency vs. using several different platforms. Therefore, it will be difficult for Dropbox to maintain its success long-term.
ReplyDeleteFurthermore, Fastcompany's ranking methodology seems to exclude the fact that innovation, by definition, refers to the notion of doing something different rather than doing the same thing better. Dropbox is a good example of this because at this point in time, its product offering does not differentiate itself from its competitors.
I agree with Sherene in that Dropbox is extremely overrated on the innovation list. The use of Dropbox is primarily for convenience and the company has not branched out into other arenas. Also, in comparison to other file storage applications, the usage is relatively low. A lot of Owen students use Dropbox simply for ease of use and the amount of free storage. I would argue that other companies with similar storage applications are more innovative due to the cross-functional nature of their businesses.
DeleteAlso, Fastcompany's rankings don't seem to consider several elements including liability, potential for growth, profit and industry comparisons- this makes the rankings questionable in my mind.
I would argue that #45 Boo-Box is overrated. They seem to be included on the list for having repurposed proven tactics other advertising agencies had applied in other markets and thus finding success in Brazil. Transferring ideas from one geographic market to another does not constitute innovation at the level of other included companies. Airbnb for instance is more deserving of the title of most innovative given that they have truly broken through cultural barriers and preconceived notions to provide lodging services in a way that some people initially found to be outlandish. True innovation is likely to face opposition and spark debate. Taking good ideas and running with them in markets where someone hasn't done it yet is just good business.
ReplyDeleteFastCompany's methodology does not take into account the processes through which the companies innovate. It would be interesting to see if there is a formal structure that leads to new product or service development in most of the listed companies or if their success has come from a one off idea or two. Also missing for some is financial information, both how much the R&D cost and how much profit has come from the innovations. While innovation doesn't necessarily require profits, in a listing such as this they seem relevant.
Completely agree, this seems to be a case or merely advertising in the same places as many of us already see in the US. Boo-Box hasn't actually created new ways to reach or target customers, they have just taken advantage of existing systems in place to serve more customers per minute. They appear to be seen as innovative since they are the first player in Brazil in the ad tech and social media space.
DeleteI would also agree with Brian's comment in that most companies could describe on small piece of their business be classified "innovative" by this survey. FastCompany needs to identify more clearly how these companies are innovative, especially in comparison to others within their industry or scope of business. More clarification around "innovative" could be helpful as well, as most students seem to disagree with innovative defined as using existing technology in a new way and prefer to define innovation as developing a new idea or technology.
I question FastCompany’s ranking of Chipotle. While I am a frequent patron of the fast food restaurant, I don’t necessarily continue to consume Chipotle because of it’s “sustainable approach to food,” and I would argue the vast majority of fast food consumers make their choice based on a balance between convenience and taste. Thus, I am not quite sure this admirable approach employed by Chipotle is necessarily a competitive advantage for them. To me Chipotle simply modified the assembly line operations concept of Subway and applied it to Mexican Cuisine. Where I have trouble is understanding the methodology or criteria Fast Company employed to arrive at these rankings. As many of my classmates have already pointed out, what truly measures innovation is often debatable and difficult to quantify. I like Qdoba as much as I like Chipotle and where I go depends on what’s closer to me at the time.
ReplyDeleteMy first thought was Apple, but was previously mentioned.
ReplyDeleteAs a second to that, I think that it is great what Southern New Hampshire University is doing to make education more important to those around them. But I think a better example of innovation would be Coursera. They are a truly new kind of education delivery (although they too have room to grow) that brings education to everyone with internet access for free. That's a new and innovative idea, not just introducing customer service to education.
I think PayPal is one of the most overrated companies on this list. Over the past decade, they’ve failed to substantially innovate the product/service they offer consumers. EBay, on which PayPal substantially relies, is becoming less and less relevant and PayPal has only started to offer new mobile payment services in direct response to new competitors such as Square and Braintree Payments. PayPal’s customer experience offerings have long been considered underwhelming and its efforts to remain relevant have mainly consisted of imitating their competitors. For example, their decision to partner with retailers to “push their platform to the physical world” came only after their competitors had strong success doing so.
ReplyDeleteWhile PayPal has had some success recently with these new offerings, the majority of their initiatives are not novel. PayPal is a pretty classic example of a company caught flat-footed by the innovative offerings of new competitors and they have labored to make up for lost ground. I think Fast Company’s methodology, especially in its assessment of PayPal, is flawed in that it doesn’t sufficiently account for the reasons a company decides to innovate and whether those innovations are truly new or mostly imitations of competitor actions.
Interesting article about PayPal being a "dinosaur"... http://qz.com/16933/paypal-is-a-dinosaur-with-smart-competitors-and-heres-why-its-wildly-successful-anyway/
DeleteThe National Marrow Donor Program is non-profit that is servicing a need and doing good work in its field, but I do not feel that it is necessarily innovative. They have used technology to help match donors to recipients, but outside of this being new to the medical industry, this concept is not necessarily innovative. Matching supply and demand is a basic business concept, and using technology to do so is nothing new. Companies like Travelocity.com, Expedia.com, and Amazon.com use technology and websites to match supply and demand.
ReplyDeleteAs for this list, there is not objective measure for compiling the list. Given the short statements describing each company, one could probably describe any company and any project that one does as an innovative project. Some type of objective measure (not necessarily quantitative measures, but some type of list of measures).
HBO is cited as innovative based on the “success” of their HBO Go service that provides streaming premium content to 5 million subscribers. A lot of their success has come from their first mover advantage in subscription based television, but as technology evolves to support TV on the Go, the ability for others to create and compete in this space is wide open and likely unsustainable. HBO’s scope is limited to those who subscribe to their services and with the increase in free and “freemium” services. People are creative in how they consume their media and what they are paying for, thus the sustainability of a service that limits you to view only the shows that are on HBO could reduce the reach of their services. A lot of their success relies on the programming aspect and ensuring a continued stream of successful shows/movies that people want to watch and are willing to pay for.
ReplyDeleteWhile Innovation and the value an innovation adds to the company is difficult to measure, it may be time for Fast Company to innovate themselves and come up with a scale that assigns point values to different metrics in order to put some meet behind why a company is ranked in a certain spot.
Certainly echoing others, but as a former engineer and general lover of data and metrics and methodologies, the lack of a comprehensive definition of innovation in these rankings really bothers me. In general, this list seems particularly skewed towards technology companies. For example, I don't see how Google's diversification within web services makes it innovative; perhaps, they are innovative at their core, but where's the evidence in 2012 to justify the ranking.
ReplyDeleteI'm more interested in companies that are offering services to customers who have not that had opportunity before or in a way that's particularly effective or innovative. For me then, the interesting company is Narayana Hrudayalaya Hospitals for their ability to bring healthcare services to a population that couldn't previously afford these services through major efficiency gains that a whole industry can learn from.
I think OpenSky is overrated on this list. They've taken several elements that were already well established (twitter feeds, celebrity endorsements, online shopping) and combined them to create a website that doesn't seem at all innovative to me. It seems that the only reason they've been included may be the high revenues they reached within months of launching the site.
ReplyDeleteGenetech has positioned itself to be the Gene-Pharma company of the future. However, their growth was not organic, rather they have been stock piling the rights and licenses to different genes and ultimately profiting from the sale of the genetic tests. They have shown little innovation in providing cost effective therapies, but rather they have exploited people's limited knowledge of genetic testing and created a monopoly on genetic identifiers. I share similar feelings with my classmates that the list is heavily tech skewed with no objective measures.
ReplyDeleteIn terms of "an innovative company" Twitter is overrated. It took a concept that was already in practice (i.e. statuses from Facebook) and popularized it. It is not doing anything to take itself beyond a communication medium. The power behind Twitter is the user-base. If anything, the people tweeting are the innovators - not Twitter.
ReplyDeleteI believe that SolarCity is overrated in the list because as mentioned there are thousands of solar powered companies. The market is crowded and SolarCity may have a short competitive advantage because they bundle their services, but this is not an "innovative" concept. Many other companies are starting to do the same thing - such as SunEdison that has end-to-end solutions. Just by offering other products/services as a bundle may not qualify a company as innovative.
ReplyDeleteI think SiemensAG is overrated. Just because they have survived the European recession doesn't mean they are innovative. They are a highly diversified conglomerate which helps to protect the company against economic downturns. They do have great products but not all are necessarily superior to their competition. I think FastCompany may be over emphasizing profitability in determining innovation. Many new start ups are very innovative but are still in the start up phase and have yet to break even.
ReplyDeleteAlready mentioned, but my vote is for Chobani. Chobani took an existing product and successfully marketed it to the US market. While the company is a great success story, I'm not sure they should be held up as great innovators...to be fair, there may be something that Chobani does (that its competitors don't) that makes its yogurt taste better, cost less, etc. but that isn't explicitly mentioned here.
ReplyDeleteMy 2nd vote would be for the Occupy Movement for all the reasons Mitch, et al. mentioned. Social media had been used prior to Occupy to support social causes and movements.
In terms of innovation, I could argue that the UPS innovation is overrated. UPS launched My Choice, which is a free service giving consumers a day's notice on a package's impending arrival. Consumers have to pay an extra fee for this ($5 or $40 a year), giving them control of when and where it's delivered. In my opinion, this can be deemed innovative, but is not game-changing. It is merely an added feature to an existing business model; it isn't breakthrough and doesn't necessarily change the way consumers use the service. Too, while the new feature provides value to the consumer, my hypothesis is that consumers would expect it to be free/not for cost or lower price (would consumers pay for this?). In addition, I find this innovation to not be inimitable; competitors can easily mimic this innovation - for instance, FedEx.
ReplyDeleteI think several companies are overrated, but I have to go with HBO. They are not specifically innovative, but successful. Even the description mentions HULU, which was - as far as I know - active before HBO's digital age. HBO expanded their existing business into a new dimension, but I am not sure whether this justifies a placement among the 50 MOST innovative companies.
ReplyDeleteOverall, the list includes an assortment of firms with very impressive achievements (innovations) to their credit. I do see some problems with the ranking however; for example, the list seems heavily skewed towards the internet / mobile space, and does not include some firms that I would have thought would definitely make the list e.g. 3M. Secondly, the exact criteria used to rate the firms has not been defined explicitly, and I for one could not make it out by seeing the firms included in the list and reading the write-ups. Is the main criterion a history of innovative practices, or is it the recency or scale of a particular innovation?
ReplyDeleteOn a separate note, and not to take anything away from the “four alphas” whose accomplishments are obviously fantastic, many of the innovations cited by the listing for these firms relate to them introducing products in existing categories to compete with each other, which I wouldn’t categorize as very innovative.
The two overrated companies on the list are Occupy and NFL. Admittedly, both have succeeded in different ways but little is due to its own innovation.
ReplyDeleteThe Occupy Movement indeed grew quickly, but it was borne out of a deep-rooted societal phenomenon more than out of the concerted efforts of the participants. Indeed, Occupiers made use of technology and media outlets that covered the Movement applied similar practices, but the concepts of creating Twitter hashtags, sit-ins, and marches are hardly new. They're just a combination of tried-and-true strike methods and social media.
The NFL has maintained its high demand for its product, not only because its a good company but because of the sport itself and, if I may submit, because of the work of ESPN. First, the game of football is the most popular sport in the USA. Could this be due to the NFL's marketing methods? Sure, but I believe it has much more to do with the shortened season (16 games versus baseball's 162 and basketball's 82). Reduced supply of games increases the equilibrium importance and excitement around each game, if you will.
Second, the NFL's voice Monday through Saturday is virtually non-existent unless you purchase the NFL Network or frequent NFL.com, neither of which is a fraction as popular as ESPN or ESPN.com. ESPN commits hours upon hours of programming even in the offseason to promote football. It's a mutually beneficial relationship, but it is clear that without ESPN, the NFL would have to spend millions of dollars more on self-promotion.
Both of these companies are great examples of explosive growth and sustained demand, but each owes the majority of its success to an underlying societal dimension or another organization altogether.
If one defines innovation as creatively coming up with solutions to a pertinent need, as well as continuously improving on already established ideas, I would vote the most creative companies as Gogo, Starbucks and DropBox.
ReplyDeleteGogo - For so many years, travelers have been limited by the lack of Wi-Fi internet availability. Not anymore, because Gogo has provided a very simple solution but quite important one. To be innovative, Gogo has debunked the notion that an idea has to be complex for it to be creative.
Starbucks - I believe Howard Schultz has been able to take a company that was founded as a traditional coffee business and transform it to a relatively diverse company that successfully and profitably sells other items like salads, hot and cold sandwiches and panini, sweet pastries, snacks, and items such as mugs and tumblers. In keeping with innovation, most recently, Starbucks ventured into the fresh juice sector by acquiring Evolution Fresh and other natural juices to cater to the health-conscious consumer demographic. The Company is also testing wine, beer, and premium-food offerings in five markets, as well as other subtle changes in decor or lighting, and how they might affect a branch’s atmosphere and receiptsI think that is innovation! The result is $11.7 billion of sales in fiscal 2011.
One company I think is overrated is Facebook. While having over 1 billion users is a rare and commendable feat, I believe that today, Facebook is mostly applicable to teenagers and college students. I agree that a lot of companies use Facebook for advertising and recruiting but ever since I graduated from college over 4 years ago, I can count the number of times I have been on Facebook. This is not just my opinion. This is a trend that is common among college students turn career professionals. Even though the company releases apps and other features, I just don't think the company has figured out how to solve the growing disengagement with its users. The result: well, I guess the debacle of its IPO speaks for itself.
Although few people would question that Google is one of the most innovative companies in the world, I believe it should fall outside the top five. Google has transformed itself into a diversified acquirer. It has transitioned Youtube into the most prominent content provider of all time via private channels, yet the foundation of Youtube was in place long before Google made its mark. Having used Android and iOs, the difference is night and day, and my choice does not favor Google. Google does a little bit of everything, but it is generally not the market leader in anything it does from the standpoint of user friendliness, which I think is the most valued trait among tech companies.
ReplyDeleteThe other company that is surprising is LinkedIn. LinkedIn has essentially mimicked everything Facebook does. In addition, I have found LinkedIn to be an inefficient way to meet people. There are substantial flaws with LinkedIn's revenue model and the whole "guessing who looked at your profile" is a bit weird and antiquated to me. It is frustrating that you must ask to be introduced to someone in this day and age, when a simple tweet can reach anyone.