The most innovative companies of 2015

Exploring adjacent markets can mean different things to different companies. For some, it means looking into neighbouring cities or countries. For others, it could mean using existing technology to expand services.

No matter what it means, mining for other areas of growth is one trait that separates innovative businesses from their lower-performing peers. It’s one of four key traits that helped Boston Consulting Group come up with its annual list of the world’s most innovative companies.

The other key traits, according to the report, are:

• An emphasis on speed.
• Well-run, lean R&D processes.
• The use of technological platforms.

Apple, for the tenth time in ten Boston Consulting Group surveys, is No. 1 on the list.

Exploring options

One example of a company that has probed adjacent markets is Yahoo Inc., the California-based technology company. Yahoo has been known since the 1990s for offering webmail, search, and news all on one portal, but competition in all three of those categories has been fierce. Google, for instance, has been No. 2 or No. 3 on the Boston Consulting Group list each of the past nine surveys.

Yahoo made the first Boston Consulting Group list, ranked No. 43 in 2005. But it was absent from the list until last year. This year, Yahoo was one of the big movers in the survey, jumping 20 spots, to No. 16, from the 2014 survey.

Video is the future for Yahoo, CFO Ken Goldman said in November 2014 at a plenary session of the World Congress of Accountants (WCOA) in Rome. Yahoo is producing original content similar to, but on a smaller scale than, Netflix, and it picked up a US comedy series, Community, after the show was cancelled by broadcaster NBC.

“We’re signing up various different, exclusive programmes now so people can go see those directly through us,” Goldman said at the WCOA panel discussion.

For example, Yahoo now has a lineup of live concerts, and in October it streamed a live broadcast of a National Football League game played in London. Outside of the teams’ local US television markets, the game was available only on Yahoo’s site.

“Whether it’s sports (or) music, people want to have that at their fingertips, whether they’re at their home, the office, or they happen to be walking around,” Goldman said.

British Telecom Group made its first appearance on the list at No. 47. It was one of 13 companies making a first appearance on the list this year, which shows how quickly things can change.

BT Group finance director Tony Chanmugam, FCMA, CGMA, said one key to keeping pace with technology is being prepared for how quickly it can change. For instance, when BT Group built a network for broadband internet in 2008, the top speed was 30 megabits per second. “At that time, we felt that, when you’re doing a broadband network, if you can get to 20 or 30 meg, that will be enough,” Chanmugam said.

Now, that speed is not nearly enough. He said at the WCOA session that 100 megabits per second is the minimum required. “You have to rethink, and you have to constantly be aware of the trends,” he said. “Technology is both an opportunity and a threat.”

Related CGMA Magazine content:

“How to Account for Innovation”: Finance chiefs are more inclined to spend on research and development despite economic worries abroad – a scenario that highlights the increasingly complex job of the finance chief: balancing innovation and costs.

“Lessons From the Cost Transformation Behind BT’s Turnaround”: Tony Chanmugam, FCMA, CGMA, became group finance director of British Telecom Group in 2008, during turbulent times for the company. Over the past six years, the group has undergone substantial growth. Chanmugam shares secrets of the transformation.

—Neil Amato (namato@aicpa.org) is a CGMA Magazine senior editor.

The world’s 50 most innovative companies

The Boston Consulting Group’s list is truly global: 29 companies are based in the US, 11 in Asia, and ten in Europe. Here’s the full list. Last year’s rank is in parentheses, and “NR” means the company was not in the top 50 in 2014.

1. Apple (1)
2. Google (2)
3. Tesla Motors (7)
4. Microsoft (4)
5. Samsung (3)
6. Toyota (8)
7. BMW (17)
8. Gilead Sciences (NR)
9. Amazon (6)
10. Daimler (25)
11. Bayer (45)
12. Tencent (47)
13. IBM (5)
14. SoftBank (30)
15. Fast Retailing (41)
16. Yahoo (36)
17. Biogen (NR)
18. Walt Disney (NR)
19. Marriott (NR)
20. Johnson & Johnson (NR)
21. Netflix (NR)
22. AXA (NR)
23. Hewlett-Packard (11)
24. Amgen (NR)
25. Allianz (NR)
26. Tata Motors (NR)
27. General Electric (12)
28. Facebook (9)
29. BASF (48)
30. Siemens (15)
31. Cisco Systems (14)
32. Dow Chemical (NR)
33. Renault (NR)
34. Fidelity Investments (NR)
35. Volkswagen (21)
36. Visa (NR)
37. DuPont (NR)
38. Hitachi (37)
39. Roche (NR)
40. 3M (22)
41. NEC (NR)
42. Medtronic (NR)
43. JPMorgan Chase (NR)
44. Pfizer (NR)
45. Huawei (50)
46. Nike (24)
47. BT Group (NR)
48. MasterCard (NR)
49. Salesforce.com (40)
50. Lenovo (23)