BCG: Tech, software and pharma firms most innovative in 2021
Difficult times can lead to increased innovation. That’s the message from Boston Consulting Group’s annual Most Innovative Companies report for 2021, whose list of the top 50 most innovative companies in the world, reveals how the pandemic has demonstrated the importance of innovation excellence in turbulent times.
The innovative company list, which is dominated by US tech and software companies, up by two from last year, saw a breakout performance by pharma this year, with nine firms ranking, that’s three times the number in 2020, and a third of them made their debut appearance here.
US leads with innovation in tech and pharma
While Apple, Alphabet and Amazon took the top three places, other US tech and software firms dominated the listing including Microsoft (4), IBM (7), Facebook (13), Oracle (15), Dell (16), Cisco (17) and Salesforce (22), among others.
Although China earned just four spots among the top 50, all tech with Huawei (8), Alibaba (14), Lenovo (25) and Tencent (26), BCG predicted in its report that increasingly Chinese companies will break into the ranking in coming years as they “compete more visibly in global markets”.
Owing to its lack of tech and software companies, Europe ranked just 11 companies on this year’s list, down by four from 2020, though it did remain competitive in other industries, including pharma (with Novartis at 36, Roche at 48, AstraZeneca at 49 and Bayer at 50) as well as automotive, medtech, industrials and fashion. Take Siemens, the top European ranking at #11 (up 10 places from 2020) which in the last year found new uses for data and advanced technologies such as AI.
Pfizer (10), the innovation story of the year, along with Moderna (42), in which Merck & Co. (35) has been an early investor. According to the report, commitment and readiness helped Pfizer, in partnership with BioNTech, not only to cut the innovation time for a COVID-19 vaccine from a decade or more to less than a year but also to ramp up production capacity to deliver much-needed vaccines. Abbott Labs and Bosch (29 and 30, respectively) were early movers.
Diversity equals innovation
Companies in the top 50 tend to exhibit higher gender and ethnic diversity in their leadership, according to BCG, pointing to Microsoft, Alibaba, Cisco Systems, Philips, and Novartis.
“There's this big chicken-and-egg question when it comes to diversity and innovation: what comes first?” says Johann Harnoss, associate director and report co-author. “We tried to put this question to rest, using the unique data we have going back to 2005. We see clear evidence that it's diversity that drives innovation, and not so much innovation attracting more diversity.”
Transforming aspirations into results
The report finds that just 20% of companies globally have built high-performing innovation systems that can transform ambitious aspirations into real results. Furthermore, some industries show big gaps in innovation readiness.
The report suggests that firms that are committed (they back priorities with investment) and ready (they have the necessary platforms and practices in place) are up to four times as likely as those that aren’t to outperform their peers in terms of revenues from new products, services, and business models.
“Innovative companies have reaped the benefit of their earlier investment through this current crisis period, both for their shareholders and in terms of wider societal impact,” says Ramón Baeza, BCG managing director and senior partner and a co-author of the report.
BCG found that this year’s research reveals a worrisome readiness gap. On the positive side, 75% of companies identify innovation as a top-three priority (up 10% from 2020 — the largest YOY increase in the 15-year history of the report), and 60% plan to increase their investment in innovation, with one-third of those planning to boost spending by more than 10%. However, 80% of companies fall short of BCG’s innovation readiness benchmark across multiple dimensions of their innovation systems.
The report suggests that attention to two areas can help bridge the gap: C-suite engagement and stronger bonds between product and sales teams.
BCG data shows that among companies that outperform their peers on innovation outcomes, close to 90% demonstrate clear C-suite-level ownership, compared with just 20% of underperformers. Meanwhile, almost a third of companies in the 2021 survey cited less-than-optimal collaboration between their R&D and sales teams as their biggest barrier to higher innovation output.
“CEOs are ramping up their companies’ efforts and investment, recognizing that innovation’s power to boost resilience and drive advantage is more important than ever,” says Justin Manly, managing director and partner and report coauthor. “We see a risk, however, that their hopes will not be realized because their companies are not ready. The good news is that most can radically improve their readiness with a few targeted changes in strategy, operating model design, and organizational capabilities.”
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.