In the release of its 2016 “Most Innovative Companies” Report, The Boston Consulting Group (BCG) points to the embrace of outsiders and specifically, partnerships as key success factors.
In the past, looking beyond in-house R&D meant outright M&A, technology licensing, and investment in external innovation vehicles. These external options included corporate venture capital (taking minority stakes in tech companies), innovation labs, and accelerators and incubators.
Most notable in recent years, however, has been a sharp increase in partnerships within the accelerator/incubator space. In the graphic below, BCG shows that (at 44 percent and 66 percent, respectively) penetration of this category is now the highest among both the top 30 and top 10 companies in 7 sectors:
“You are not the only smart company out there”: JnJ
Iconic innovator Johnson & Johnson grabbed the #29 spot this year. The company’s EVP and Chief Scientific Officer Paul Stoffels credited the company’s focus on three areas:
- Try to bring the highest-impact technologies forward.
- Give equal weight to internal and external innovation, and actively promote partnering because “you have to realize that you are not the only smart company out there.”
- Ensure innovation programs are aligned with the company’s strategic ones.
What about banks?
Sadly, though perhaps somewhat unsurprisingly, financial services didn’t figure prominently on a Top 50 list topped by Apple, Google, and Tesla. After jumping 15 spots this year to #28, JPMorgan Chase was the highest-ranked financial institution, and AXA and Allianz were the only other financials to crack the Top 50.
The report identified one key area that is particularly applicable to banks: the leverage of data analytics to improve efficiency and customer experience:
“One solution is to apply data analytics tools that can boost innovation productivity by, for example, identifying trends and possible new directions from disparate external sources. Harnessing data from multiple sources… has helped scores of companies better understand the range of opportunities open to them and identify possibility for product and business model innovation and moves into adjacent areas.”
Turning data on client holdings and transactions into insights into buying behavior, and influencing how clients behave, can be a very lucrative use of banks’ time. A few ways they could benefit from a simple but powerful “innovation layer” like Zafin’s miRevenue:
- Identify what clients are profitable and why – and then target them accordingly to either boost revenues (e.g., cross- or up-sell) or reduce their cost footprint (e.g., move them to lower-cost channels or limit service).
- Streamline product innovation – rollouts of new products or changes to old ones – to eliminate costly implementations and time delays.
- Reduce revenue leakage by tracking and enforcing the conditions attached to fee waivers or rate discounts.
Banks may not build self-driving cars or put a million songs in your pocket. But there is still a lot of potential for innovation – and BCG concludes that the most successful ones tap bright outside partners to complement and leverage internal teams.
This blog post was written by Mike Wallberg, Content Marketing Manager at Zafin. You can email him directly at firstname.lastname@example.org.