Google (NASDAQ: GOOG) today introduced new innovation with the Business version of Google Apps - Google Apps Premier Edition in direct competition to Microsoft's Enterprise applications.
Google is one of the top 20 Innovators of The Innovation Index.
Google Apps Premier Edition is available for a yearly subscription of $50 per user account per year.
Google Apps Premier Edition communication and collaboration suite includes the following Top Ten Features:
1. Google Gmail webmail services including Gmail for Blackberry
2. Google Calendar shared calendaring services
3. Google Talk instant messaging and voice-over-ip
4. Start Page branded and customized to company domain (e.g. companyname.googleapp.com)
5. Google Docs & Spreadsheets
6. 24 x 7 Phone support for critical issues - extended business hours support
7. 10 GB storage per user
8. New set of administration and business integration capabilities - Application-level control and APIs for business process adaptation, policies, data migration, user provisioning, single sign-on, and mail gateways
9. 99.9% uptime - SLAs (service level agreements) for monitoring and credits
10. French, Italian, German, Spanish, Chinese, Japanese and Korean language versions (possibly more)
Importantly, Google Apps Premier Edition builds on the success of 100,000 small businesses and universities using the free Google Apps Standard Edition and Google Apps Education Edition introduced in 2006.
Proctor & Gamble (NYSE: PG) and General Electric (NYSE: GE) are also two of the top 20 Innovators of The Innovation Index. Both P&G and GE applauded the new Google Apps Premier Edition.
P&G statement:
"Procter & Gamble Global Business Services (GBS) has enrolled as a charter enterprise customer of Google Apps, a successful consumer product suite now available to enterprises. P&G will work closely with Google in shaping enterprise characteristics and requirements for these popular tools," said Laurie Heltsley, director Procter & Gamble Global Business Services.
GE statement:
"So much of business now relies on people being able to communicate and collaborate effectively," said Gregory Simpson, CTO for General Electric Company. "GE is interested in evaluating Google Apps for the easy access it provides to a suite of web applications, and the way these applications can help people work together. Given its consumer experience, Google has a natural advantage in understanding how people interact together over the web."
Google also has the backing and adoption of smaller yet critical businesses such as San Francisco Bay Pediatrics.
San Francisco Bay Pediatrics:
"When it comes to our email systems, our doctors don’t have the time or the budgets to deal with managing technology or defending against spam," said Andrew Johnson, chief information officer, San Francisco Bay Pediatrics. "With Google Apps Premier Edition we don’t have to worry about downloading the latest spam filters or navigating unwieldy servers. This is where we let Google do what it does best, so we can do what we do best – help our patients."
Finally, Google made a very important announcement which was embedded towards the later paragraphs of the Press Release:
"other early adopters of Google Apps Premier Edition include Salesforce.com and Prudential Preferred Properties in the U.S., as well as Essilor and Mediametrie in France. "
Google is touting Salesforce.com as an early adopter.
Could this be the beginning of an early indicator that Google will go on to buy Salesforce.com?
Does Microsoft Live or Microsoft Business Services division have an answer for Google? Can Google find many distribution and enterprise partners such as Avaya and Postini to support, integrate and service Google Apps Premier Edition in the enterprise? For now, Google is knocking at the enterprise doors, and if Google is able to obtain early adopters such as GE and couple of other larger Fortune 500 corporations, Google will generate the kind of momentum where major enterprise customers will be compelled to take a look at Google Apps Premier Edition and evaluate at the price point of $50 per user account per year.
New Revenue Opportunity
With the introduction of Google Apps Premier Edition, Google has the opportunity to create new market share, and grab market share from Microsoft Office and Email applications. Google Apps Standard and Education Edition has 100,000 business customers today; at an average of 10 users per customer, this translates to 1 million end users potentially using Google Apps today. Google Apps was introduced in 2006. Thus, in about 1 year, Google Apps has an end user population of 1 million potential users. If Google Apps Premier Edition can attract 100,000 new businesses in one year, or 1 million end users, this will translate into new revenue opportunity of $50 million per year. However, knowing Google, and with the tremendous marketing muscle it exerts at Google.com, the goal is possibly much higher: 10 million end users or $500 million in annual revenue. Where will these customers come from? From new market growth and a sizable number from Microsoft. If Google goes on to buy Salesforce.com and introduces Google Apps integrated with Salesforce.com CRM applications, the vision of $500 million in annual revenue is within reach. In five years or less, Google has the potential to create a $1 billion business for Google Apps Premier Edition. Disruptive innovation in motion.
Google versus Microsoft - the enterprise battle heats up!
Showing posts with label creativity blog. Show all posts
Showing posts with label creativity blog. Show all posts
Thursday, February 22, 2007
Thursday, February 8, 2007
The Innovation Index Weekly Report for 02-07-07
The Innovation Index was dragged down 1% for the week ending February 7, 2007. The Innovation Index closed at 71.06 points, up 2% in 2007, and in a virtual tie with Dow Jones Index and S & P 500. NASDAQ leads all indices with 3% gains in 2007.
9 of the top 20 innovators gained ground last week, 6 innovators went in the red, and 5 were unchanged.
Weekly Advances
The big movers of the week were Research In Motion (NASDAQ: RIMM), Cisco Systems (NASDAQ: CSCO) and Yahoo! Inc. (NASDAQ: YHOO) gaining 7%, 6% and 6% respectively. Cisco announced solid financial results for the quarter, raised the guidance, and announced key innovations (below). Yahoo! is on a tear this year, and everything it touches turns into gold. Watch out for Yahoo! to have a breakout year. Yahoo! is already up 17% in 2007. Research In Motion is back after spending much of January in doldrums. RIMM us now up 7% in 2007.
Weekly Declines
The big declines of the week came from Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT) and Starbucks (NASDAQ: SBUX) losing 6%, 5% and 4% respectively. Whereas GOOG was down 6% last week, YHOO was up 6%. Google had an excellent quarter; yet the investors are a bit wary of the future. Also, the YouTube services' removal of Viacom videos created a publicity nightmare for Google. However, Google will bounce back. Microsoft was down 5% after the biggest launch in the history of Windows Vista. Why is this the case? For a related story on the Top Five Vista Stumbles, click here. Starbucks had another solid quarter; yet the investors are a bit skeptical on the outlook.
Yearly Leaders & Laggards
Yahoo!, eBay Inc. (NASDAQ: ebay) and Target Corp. (NYSE: TGT) lead all innovators in 2007 with yearly gains of 17%, 11% and 10% respectively. Starbucks, 3M (NYSE: MMM) and Dell Inc. (NASDAQ: DELL) are the early laggards at 5%, 4% and 5% respectively. Michael Dell has become the CEO of Dell again. What will be his recipe for change and turnaround? I posted my opinion on How Dell can turnaround Dell, beat HP and become the number one computer company again.
Weekly Innovation Review at the Top Innovators
3M (NYSE: MMM) introduced a robust, secure and flexible 2mm Latch/Eject Headers for Wire to Board Applications, saving Circuit Board ``Real Estate'' and permitting more signals in smaller space. 3M acquired Accuspray Application Technologies Inc., a manufacturer of spray paint equipment with a wide array of spray guns for architectural, automotive refinishing, industrial and woodworking applications. 3M also acquired the Rite-Lok global industrial adhesives product line from Chemence Inc., a specialty chemical company that manufactures a range of consumer and industrial adhesives. According to 3M, "Complementary acquisitions such as this support 3M's growth strategy to expand its core adhesives business."
America Movil (NYSE: AMX), benefiting from the rise in Mexico stock market, is expected to report lower fourth-quarter net profit next week as a tax gain of 8.6 billion pesos ($781.6 million) the year before makes for tough year-on-year comparisons. Millions of Mexicans had their cellphone conversations put on hold for much of Tuesday after a technical fault in western Mexico City saturated the Telcel cellphone network, Mexico's largest and owned by Slim's telecommunications giant America Movil. America Movil added 10.8 million subscribers in the latest quarter, bringing the total subscriber base to124.8 million. The net gain in customers included 8.7 million from "organic growth" and 2.1 million acquired with Verizon Communications Inc.'s operations in the Dominican Republic.
Apple Inc. (NASDAQ: AAPL) will resell Digital Music Group Inc. (DMGI) recordings and music video content in a contract the companies renewed last week. Chief Executive Steve Jobs on Tuesday called on the four major record companies to start selling songs online without copy protection software known as digital rights management (DRM). "If such requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies," he said in the statement. IAC/Interactive Corp.'s (IACI) Ticketmaster is partnering with Apple Inc.'s (AAPL) iTunes to offer customers a free song with every concert ticket purchased.
Amazon.com (NASDAQ: AMZN) and TiVo Inc. (NASDAQ: TIVO), the creator of and a leader in television services for digital video recorders (DVRs), announced "Amazon Unbox on TiVo," a soon-to-be-launched service feature that will provide TiVo subscribers with the ability to rent and purchase movies and television shows from leading studios and networks including CBS, Fox Entertainment Group, Lionsgate, Paramount Pictures, Universal Studios Home Entertainment and Warner Bros. Entertainment. Amazon.com posted 23 cents vs. 47 cents fourth quarter EPS as higher costs and income tax expense offset a 34% sales rise. The company announced that the first-day advance orders for "Harry Potter and the Deathly Hallows," the seventh and last installment of J.K. Rowling's successful book series, were 547 percent higher than for its predecessor. Company executives believe the company's new product categories are scaling well and will eventually provide some relief for its squeezed profit margins.
Cisco Systems (NASDAQ: CSCO) announced two significant innovations to its Internet Protocol Next-Generation Network (IP NGN) architecture: a Mobile Transport over Pseudowires (MToP) solution and an enhanced Cisco Content Services Gateway. Cisco shares rose on solid results and raised forecast, and helped stage a rally for NASDAQ. CEO John Chambers tells the analysts that Cisco is gaining market share from competitors. Pacific Internet Ltd.'s (PCNTF) Thai unit and Cisco Systems Inc. (CSCO) are collaborating to offer an Internet protocol-based program for small-and-medium sized businesses in Thailand. Cisco also announced significant new capabilities for enhanced collaboration among several products and services in its security portfolio, simplifying the ability for organizations to control and contain information security threats in a more coordinated, flexible fashion across networks while streamlining management and protecting confidential communications to remote users. Video applications such as Internet Protocol (IP) video, IPTV and telepresence on the campus network help customers increase productivity while reducing operating costs. Cisco(R) announced new Cisco Catalyst(R) switch offerings that aim to ensure these new real-time bandwidth intensive services are delivered with the highest performance, availability, quality of service and maximum security.
Dell Inc. (NASDAQ: DELL) began selling flat-panel televisions from rival electronics manufacturer Sony Corp. (SNE) and said it would soon offer products from a variety of companies as it tweaks its consumer business strategy. Dell and Absolute Software have teamed to provide notebook computer theft recovery services for Dell's U.S. consumer customers. The move makes Dell the first PC manufacturer to deliver a higher degree of peace of mind by combining theft recovery measures with accidental damage protection. Michael Dell takes over the role of the CEO of Dell Inc. again. How can Dell turnaround Dell? I posted my opinion on this last week.
Online auctioneer EBay Inc. (EBAY) has received antitrust clearance from the Federal Trade Commission to acquire privately held StubHub, an online marketplace for the resale of event tickets, for about $310 million in cash. eBay is in talks to supply electronic payments and auction features to the popular MySpace social network and other New Corp.'s online properties, according to people familiar with the situation. eBay rolled out a service for U.S. auto dealers intended to drive a tenfold increase in the inventory of cars available for purchase on its Web site.
GE Capital, unit of General Electric Co. (NYSE: GE), will purchase stakes in Sanyo Electric Credit Co. Ltd. from Sanyo Electric Co. Ltd. and Goldman Sachs for about 45 billion yen ($372.4 million), sources close to the matter said. GE Consumer & Industrial's drive to innovate and lead the way to general illumination with white, light-emitting diode (LED) solutions--on a global scale in commercial, industrial and residential settings--kicks off with a symbolic and meaningful name change. Going forward, GELcore, LLC, will operate as Lumination, LLC. The new name reflects the fast-growing business unit's vision of imagination with light, and embraces GE's heritage of innovation and optimism for the future. GE Healthcare announced today that it has completed a license agreement with Applied Biosystems, granting Applied Biosystems access to GE Healthcare patents for the biomagnetic isolation of nucleic acids. GE Energy Financial Services announced that it is entering the European water market and expanding into industrial water treatment by buying a majority of the assets of Idex AQUASERVICES in France. GE Energy Financial Services is acquiring a 95 percent stake, including debt obligations, from Idex AQUASERVICES -- a developer, owner and operator of facilities that purify water for the food, beverage and cosmetics industries. GE Fanuc Embedded Systems, a leading provider of embedded military and commercial solutions, expands their already extensive line of network products with the introduction of the rugged RES-110 Layer 2 and 3 managed Ethernet switch. GE Money's Sales Finance unit and Bath and Kitchen Buying Group, the industry's only member-owned buying group, today announced a new relationship to provide private label revolving and installment credit options through GE's REFINEDesign and PROJECTLOAN(SM) programs.
Princeton University has become the 12th major library system to join Google's (NASDAQ: GOOG) ambitious, sometimes-controversial project to scan the world's great literary works and make them searchable over the Web. Google Checkout has offered last minute promotions for Valentine's day. "Google Checkout adoption rates exceeded our expectations in Q4," finance chief George Reyes said on an earnings conference call with Wall Street analysts. Google introduced Checkout, which competes with eBay Inc.'s (EBAY) dominant PayPal service, in June, 2006. Google shares weighed down owing to news surrounding removal of all Viacom videos from the YouTube service, and earnings report that showed solid gains, triple the profits, and yet made some investors jittery (inspite of all the upgrades).
Hewlett-Packard Co. (NYSE:HPQ) announced that its redesigned print cartridge packaging for North America will reduce greenhouse gas emissions by an estimated 37 million pounds in 2007 - the equivalent of taking 3,600 cars off the road for one year. Wal-Mart Stores Inc. introduced a test version of its new video download service, making it the first major retailer to offer such a service with the backing of all of Hollywood's big studios, powered by HP. HP expanded the color printing portfolio targeting small businesses, including the introduction of the world's fastest desktop all-in-ones. HP signed a definitive agreement to acquire Bristol Technology Inc., a private company that provides technology to monitor business transactions. HP announced new storage offerings to help enterprise customers consolidate, virtualize and secure their storage environments.
Amdocs (NYSE: DOX), the leading provider of software and services to enable integrated customer management and the intentional customer experience(TM), and IBM (NYSE: IBM) announced a global alliance to address the next-generation networks (NGN) transformation needs of service providers in the telecommunications industry. IBM announced the industry's most comprehensive range of resources for business partners using open source technologies. IBM will provide companies with free access to its sales, marketing and technical consultants, allowing them to bring their offerings to market more quickly and expand into new markets. IBM announced expanded scalability enhancements to the industry's most powerful virtualization technology z/VM. The company revealed a new software technology from its Research labs designed to greatly enhance security and management capabilities in virtualized data centers. IBM launched a new partner program to serve select sub-industries to drive business for its partners while speeding customer implementations with specialized, local knowledge.
Credant Technologies(R), the market leader in mobile data protection solutions, is teaming with Intel Corporation (NYSE: INTC) to bolster data security using Intel(R) vPro(TM) technology.
Microsoft Corp. (NASDAQ: MSFT), with its new operating system called Windows Mobile 6, is promising improved search, better security and tighter integration with Windows Live services, CNET News.com reported in its Thursday editions. Microsoft unveiled products and initiatives designed to allow consumers to access, share and use corporate and personal information more securely against phishing and other identity-theft scams. Microsoft announced the first Microsoft(R) Certified Professional (MCP) exam for IT and hosting professionals to gain Microsoft Certified Technology Specialist status in Configuring and Managing Windows Server(R) 2003 Hosted Environments. In an effort to drive technology innovation to automotive dealerships worldwide, Microsoft launched the Microsoft(R) Automotive Retail Solutions Initiative, unveiling key alliances as part of a new partner ecosystem providing dealer management solutions. Microsoft Corp. also announced the general availability of Intelligent Application Gateway (IAG) 2007.
P&G Professional Care (NYSE: PG) today announced an expanded relationship with Beauty Systems Group (BSG) in the North American professional salon market. Crest and Oral-B have partnered with Scientific American magazine to present the most comprehensive information and expert opinions regarding the relationship between oral health and whole body wellness, including potential implications for future health care models.
BlackBerry maker Research In Motion (NASDAQ: RIMM) won a second victory in a key UK patent lawsuit on Wednesday that had threatened the future of BlackBerry's e-mail service in Britain. 30 Second Software, Inc., an innovator in mobile commerce technology and services, announced "Digby," an electronic commerce service that radically simplifies the buying experience by combining rich content from name-brand retailers with an intuitive shopping process that is optimized for mobile devices - available first on BlackBerry(R) handsets from Research In Motion.
For the first time ever, Southwest Airlines (NYSE: LUV) Vacations is launching a nationwide sale offering 50 percent off vacation travel packages for a party of two adults. Starting February 9, 2007, book a two to five night air/hotel package to a valid destination, staying at a Hilton, Hyatt, or Holiday Inn, and the second adult in your room travels free! Rapid Rewards Members who book travel online to or from any of Southwest's eight California cities by March 8, 2007, will receive double credit in Southwest's award-winning frequent flyer program, Rapid Rewards. Southwest has now released airfares and flight schedules for travel through August 24, 2007, forcing the major airlines to match fares as low as $198 to $218 roundtrip for coast-to-coast travel. Southwest also announced the addition of several new flights giving Customers more choices for their summer travel plans. Southwest Airlines is adding new flights in several key Southwest cities such as Denver, Baltimore/Washington, and Chicago Midway. Southwest Airlines and Chase Card Services, a division of JPMorgan Chase & Co. (NYSE:JPM), today introduced the new Rapid Rewards Visa Signature(R) and Visa(R) Business Card products. Nintendo and Southwest Airlines are giving some of the airline's most-traveled flyers a surprise gift, and we're not talking peanuts here. Fifty of Southwest's Rapid Rewards Members have been mailed a Nintendo DS(TM) Lite and a copy of Brain Age(TM): Train Your Brain in Minutes a Day, marking the first time that Southwest has partnered with an outside company to provide a special treat for Rapid Rewards Members.
Starbucks (NASDAQ: SBUX) Entertainment announced today that it will release a CD of 15 original tracks by Starbucks partners (employees). The first-of-its-kind compilation called "Off the Clock Vol. 1: New Music from Up & Coming Starbucks Artists" is the result of a company-wide contest that invited Starbucks partners to submit original solo or band recordings. Starbucks profits jumped nearly 18% in the latest financial quarter, topping analyst estimates.
Target shares (NYSE: TGT) hit all-time high at $63.07. Target January sales rose 5.1% owing to cold weather. Target Corp will release exclusive CDs by artists like Kenny Loggins and David Cassidy in the latest example of stars "of a certain age" bypassing music labels to partner directly with retailers. Target announced that it is constructing a food distribution center in Lake City, Florida to supply frozen, refrigerated and fresh produce to stores in the Southeast.
Wal-Mart Stores Inc. (WMT) said same-store sales rose 2.2% in January. Wal-Mart Stores Inc.'s entry into movie downloading should have a bigger impact on the growth of digital video distribution in the near term than on the ultimate decline in DVD sales. Wal-Mart Stores announced the selling of downloads of movie and television shows on its Web site putting the firm in competition with Amazon.com and Apple's iTunes. Walt Disney Co. , Time Warner Inc.'s Warner Brothers, Viacom Inc.'s Paramount Pictures, Sony Corp. , News Corp.'s 20th Century Fox, and Universal Pictures, a unit of NBC Universal, which is a subsidiary of General Electric Co. are inking the deals with Wal-Mart. Wal-Mart Chief Executive Lee Scott unveiled a new "Sustainability 360" environmental plan on Thursday, challenging employees, suppliers and customers to remove nonrenewable energy from their lives.
Yahoo Inc. (YHOO) and General Motors Corp. (GM) introduced a new Web site called Pontiac Underground, the first of an expected string of sites touting non-entertainment brands. The Web site, now part of Yahoo's autos section, is geared towards Pontiac enthusiasts and is a mash-up of several of Yahoo's social media features, including its photo uploading Flickr, Yahoo Answers, and Yahoo Video. EMI announced that it has put out songs from three artists: Norah Jones, Relient K and Lily Allen. Jones and Relient K songs were sold in open format on Yahoo Inc.'s music site, and Allen's tunes were made available through a preordering system via text messages. Yahoo Inc. said it planned to build individual Web sites around 100 entertainment "brands" this year that would pull together content from Yahoo's online properties, The New York Times reported. Yahoo! launched the early version of Panama.
References:
Reuters
Dow Jones Newswire
Marketwatch
New York Times
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index is even more impressive, and has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols is presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
Disclaimer: I began investing in the Innovators comprising The Innovation Index starting in 2007.
9 of the top 20 innovators gained ground last week, 6 innovators went in the red, and 5 were unchanged.
Weekly Advances
The big movers of the week were Research In Motion (NASDAQ: RIMM), Cisco Systems (NASDAQ: CSCO) and Yahoo! Inc. (NASDAQ: YHOO) gaining 7%, 6% and 6% respectively. Cisco announced solid financial results for the quarter, raised the guidance, and announced key innovations (below). Yahoo! is on a tear this year, and everything it touches turns into gold. Watch out for Yahoo! to have a breakout year. Yahoo! is already up 17% in 2007. Research In Motion is back after spending much of January in doldrums. RIMM us now up 7% in 2007.
Weekly Declines
The big declines of the week came from Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT) and Starbucks (NASDAQ: SBUX) losing 6%, 5% and 4% respectively. Whereas GOOG was down 6% last week, YHOO was up 6%. Google had an excellent quarter; yet the investors are a bit wary of the future. Also, the YouTube services' removal of Viacom videos created a publicity nightmare for Google. However, Google will bounce back. Microsoft was down 5% after the biggest launch in the history of Windows Vista. Why is this the case? For a related story on the Top Five Vista Stumbles, click here. Starbucks had another solid quarter; yet the investors are a bit skeptical on the outlook.
Yearly Leaders & Laggards
Yahoo!, eBay Inc. (NASDAQ: ebay) and Target Corp. (NYSE: TGT) lead all innovators in 2007 with yearly gains of 17%, 11% and 10% respectively. Starbucks, 3M (NYSE: MMM) and Dell Inc. (NASDAQ: DELL) are the early laggards at 5%, 4% and 5% respectively. Michael Dell has become the CEO of Dell again. What will be his recipe for change and turnaround? I posted my opinion on How Dell can turnaround Dell, beat HP and become the number one computer company again.
Weekly Innovation Review at the Top Innovators
3M (NYSE: MMM) introduced a robust, secure and flexible 2mm Latch/Eject Headers for Wire to Board Applications, saving Circuit Board ``Real Estate'' and permitting more signals in smaller space. 3M acquired Accuspray Application Technologies Inc., a manufacturer of spray paint equipment with a wide array of spray guns for architectural, automotive refinishing, industrial and woodworking applications. 3M also acquired the Rite-Lok global industrial adhesives product line from Chemence Inc., a specialty chemical company that manufactures a range of consumer and industrial adhesives. According to 3M, "Complementary acquisitions such as this support 3M's growth strategy to expand its core adhesives business."
America Movil (NYSE: AMX), benefiting from the rise in Mexico stock market, is expected to report lower fourth-quarter net profit next week as a tax gain of 8.6 billion pesos ($781.6 million) the year before makes for tough year-on-year comparisons. Millions of Mexicans had their cellphone conversations put on hold for much of Tuesday after a technical fault in western Mexico City saturated the Telcel cellphone network, Mexico's largest and owned by Slim's telecommunications giant America Movil. America Movil added 10.8 million subscribers in the latest quarter, bringing the total subscriber base to124.8 million. The net gain in customers included 8.7 million from "organic growth" and 2.1 million acquired with Verizon Communications Inc.'s operations in the Dominican Republic.
Apple Inc. (NASDAQ: AAPL) will resell Digital Music Group Inc. (DMGI) recordings and music video content in a contract the companies renewed last week. Chief Executive Steve Jobs on Tuesday called on the four major record companies to start selling songs online without copy protection software known as digital rights management (DRM). "If such requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies," he said in the statement. IAC/Interactive Corp.'s (IACI) Ticketmaster is partnering with Apple Inc.'s (AAPL) iTunes to offer customers a free song with every concert ticket purchased.
Amazon.com (NASDAQ: AMZN) and TiVo Inc. (NASDAQ: TIVO), the creator of and a leader in television services for digital video recorders (DVRs), announced "Amazon Unbox on TiVo," a soon-to-be-launched service feature that will provide TiVo subscribers with the ability to rent and purchase movies and television shows from leading studios and networks including CBS, Fox Entertainment Group, Lionsgate, Paramount Pictures, Universal Studios Home Entertainment and Warner Bros. Entertainment. Amazon.com posted 23 cents vs. 47 cents fourth quarter EPS as higher costs and income tax expense offset a 34% sales rise. The company announced that the first-day advance orders for "Harry Potter and the Deathly Hallows," the seventh and last installment of J.K. Rowling's successful book series, were 547 percent higher than for its predecessor. Company executives believe the company's new product categories are scaling well and will eventually provide some relief for its squeezed profit margins.
Cisco Systems (NASDAQ: CSCO) announced two significant innovations to its Internet Protocol Next-Generation Network (IP NGN) architecture: a Mobile Transport over Pseudowires (MToP) solution and an enhanced Cisco Content Services Gateway. Cisco shares rose on solid results and raised forecast, and helped stage a rally for NASDAQ. CEO John Chambers tells the analysts that Cisco is gaining market share from competitors. Pacific Internet Ltd.'s (PCNTF) Thai unit and Cisco Systems Inc. (CSCO) are collaborating to offer an Internet protocol-based program for small-and-medium sized businesses in Thailand. Cisco also announced significant new capabilities for enhanced collaboration among several products and services in its security portfolio, simplifying the ability for organizations to control and contain information security threats in a more coordinated, flexible fashion across networks while streamlining management and protecting confidential communications to remote users. Video applications such as Internet Protocol (IP) video, IPTV and telepresence on the campus network help customers increase productivity while reducing operating costs. Cisco(R) announced new Cisco Catalyst(R) switch offerings that aim to ensure these new real-time bandwidth intensive services are delivered with the highest performance, availability, quality of service and maximum security.
Dell Inc. (NASDAQ: DELL) began selling flat-panel televisions from rival electronics manufacturer Sony Corp. (SNE) and said it would soon offer products from a variety of companies as it tweaks its consumer business strategy. Dell and Absolute Software have teamed to provide notebook computer theft recovery services for Dell's U.S. consumer customers. The move makes Dell the first PC manufacturer to deliver a higher degree of peace of mind by combining theft recovery measures with accidental damage protection. Michael Dell takes over the role of the CEO of Dell Inc. again. How can Dell turnaround Dell? I posted my opinion on this last week.
Online auctioneer EBay Inc. (EBAY) has received antitrust clearance from the Federal Trade Commission to acquire privately held StubHub, an online marketplace for the resale of event tickets, for about $310 million in cash. eBay is in talks to supply electronic payments and auction features to the popular MySpace social network and other New Corp.'s online properties, according to people familiar with the situation. eBay rolled out a service for U.S. auto dealers intended to drive a tenfold increase in the inventory of cars available for purchase on its Web site.
GE Capital, unit of General Electric Co. (NYSE: GE), will purchase stakes in Sanyo Electric Credit Co. Ltd. from Sanyo Electric Co. Ltd. and Goldman Sachs for about 45 billion yen ($372.4 million), sources close to the matter said. GE Consumer & Industrial's drive to innovate and lead the way to general illumination with white, light-emitting diode (LED) solutions--on a global scale in commercial, industrial and residential settings--kicks off with a symbolic and meaningful name change. Going forward, GELcore, LLC, will operate as Lumination, LLC. The new name reflects the fast-growing business unit's vision of imagination with light, and embraces GE's heritage of innovation and optimism for the future. GE Healthcare announced today that it has completed a license agreement with Applied Biosystems, granting Applied Biosystems access to GE Healthcare patents for the biomagnetic isolation of nucleic acids. GE Energy Financial Services announced that it is entering the European water market and expanding into industrial water treatment by buying a majority of the assets of Idex AQUASERVICES in France. GE Energy Financial Services is acquiring a 95 percent stake, including debt obligations, from Idex AQUASERVICES -- a developer, owner and operator of facilities that purify water for the food, beverage and cosmetics industries. GE Fanuc Embedded Systems, a leading provider of embedded military and commercial solutions, expands their already extensive line of network products with the introduction of the rugged RES-110 Layer 2 and 3 managed Ethernet switch. GE Money's Sales Finance unit and Bath and Kitchen Buying Group, the industry's only member-owned buying group, today announced a new relationship to provide private label revolving and installment credit options through GE's REFINEDesign and PROJECTLOAN(SM) programs.
Princeton University has become the 12th major library system to join Google's (NASDAQ: GOOG) ambitious, sometimes-controversial project to scan the world's great literary works and make them searchable over the Web. Google Checkout has offered last minute promotions for Valentine's day. "Google Checkout adoption rates exceeded our expectations in Q4," finance chief George Reyes said on an earnings conference call with Wall Street analysts. Google introduced Checkout, which competes with eBay Inc.'s (EBAY) dominant PayPal service, in June, 2006. Google shares weighed down owing to news surrounding removal of all Viacom videos from the YouTube service, and earnings report that showed solid gains, triple the profits, and yet made some investors jittery (inspite of all the upgrades).
Hewlett-Packard Co. (NYSE:HPQ) announced that its redesigned print cartridge packaging for North America will reduce greenhouse gas emissions by an estimated 37 million pounds in 2007 - the equivalent of taking 3,600 cars off the road for one year. Wal-Mart Stores Inc. introduced a test version of its new video download service, making it the first major retailer to offer such a service with the backing of all of Hollywood's big studios, powered by HP. HP expanded the color printing portfolio targeting small businesses, including the introduction of the world's fastest desktop all-in-ones. HP signed a definitive agreement to acquire Bristol Technology Inc., a private company that provides technology to monitor business transactions. HP announced new storage offerings to help enterprise customers consolidate, virtualize and secure their storage environments.
Amdocs (NYSE: DOX), the leading provider of software and services to enable integrated customer management and the intentional customer experience(TM), and IBM (NYSE: IBM) announced a global alliance to address the next-generation networks (NGN) transformation needs of service providers in the telecommunications industry. IBM announced the industry's most comprehensive range of resources for business partners using open source technologies. IBM will provide companies with free access to its sales, marketing and technical consultants, allowing them to bring their offerings to market more quickly and expand into new markets. IBM announced expanded scalability enhancements to the industry's most powerful virtualization technology z/VM. The company revealed a new software technology from its Research labs designed to greatly enhance security and management capabilities in virtualized data centers. IBM launched a new partner program to serve select sub-industries to drive business for its partners while speeding customer implementations with specialized, local knowledge.
Credant Technologies(R), the market leader in mobile data protection solutions, is teaming with Intel Corporation (NYSE: INTC) to bolster data security using Intel(R) vPro(TM) technology.
Microsoft Corp. (NASDAQ: MSFT), with its new operating system called Windows Mobile 6, is promising improved search, better security and tighter integration with Windows Live services, CNET News.com reported in its Thursday editions. Microsoft unveiled products and initiatives designed to allow consumers to access, share and use corporate and personal information more securely against phishing and other identity-theft scams. Microsoft announced the first Microsoft(R) Certified Professional (MCP) exam for IT and hosting professionals to gain Microsoft Certified Technology Specialist status in Configuring and Managing Windows Server(R) 2003 Hosted Environments. In an effort to drive technology innovation to automotive dealerships worldwide, Microsoft launched the Microsoft(R) Automotive Retail Solutions Initiative, unveiling key alliances as part of a new partner ecosystem providing dealer management solutions. Microsoft Corp. also announced the general availability of Intelligent Application Gateway (IAG) 2007.
P&G Professional Care (NYSE: PG) today announced an expanded relationship with Beauty Systems Group (BSG) in the North American professional salon market. Crest and Oral-B have partnered with Scientific American magazine to present the most comprehensive information and expert opinions regarding the relationship between oral health and whole body wellness, including potential implications for future health care models.
BlackBerry maker Research In Motion (NASDAQ: RIMM) won a second victory in a key UK patent lawsuit on Wednesday that had threatened the future of BlackBerry's e-mail service in Britain. 30 Second Software, Inc., an innovator in mobile commerce technology and services, announced "Digby," an electronic commerce service that radically simplifies the buying experience by combining rich content from name-brand retailers with an intuitive shopping process that is optimized for mobile devices - available first on BlackBerry(R) handsets from Research In Motion.
For the first time ever, Southwest Airlines (NYSE: LUV) Vacations is launching a nationwide sale offering 50 percent off vacation travel packages for a party of two adults. Starting February 9, 2007, book a two to five night air/hotel package to a valid destination, staying at a Hilton, Hyatt, or Holiday Inn, and the second adult in your room travels free! Rapid Rewards Members who book travel online to or from any of Southwest's eight California cities by March 8, 2007, will receive double credit in Southwest's award-winning frequent flyer program, Rapid Rewards. Southwest has now released airfares and flight schedules for travel through August 24, 2007, forcing the major airlines to match fares as low as $198 to $218 roundtrip for coast-to-coast travel. Southwest also announced the addition of several new flights giving Customers more choices for their summer travel plans. Southwest Airlines is adding new flights in several key Southwest cities such as Denver, Baltimore/Washington, and Chicago Midway. Southwest Airlines and Chase Card Services, a division of JPMorgan Chase & Co. (NYSE:JPM), today introduced the new Rapid Rewards Visa Signature(R) and Visa(R) Business Card products. Nintendo and Southwest Airlines are giving some of the airline's most-traveled flyers a surprise gift, and we're not talking peanuts here. Fifty of Southwest's Rapid Rewards Members have been mailed a Nintendo DS(TM) Lite and a copy of Brain Age(TM): Train Your Brain in Minutes a Day, marking the first time that Southwest has partnered with an outside company to provide a special treat for Rapid Rewards Members.
Starbucks (NASDAQ: SBUX) Entertainment announced today that it will release a CD of 15 original tracks by Starbucks partners (employees). The first-of-its-kind compilation called "Off the Clock Vol. 1: New Music from Up & Coming Starbucks Artists" is the result of a company-wide contest that invited Starbucks partners to submit original solo or band recordings. Starbucks profits jumped nearly 18% in the latest financial quarter, topping analyst estimates.
Target shares (NYSE: TGT) hit all-time high at $63.07. Target January sales rose 5.1% owing to cold weather. Target Corp will release exclusive CDs by artists like Kenny Loggins and David Cassidy in the latest example of stars "of a certain age" bypassing music labels to partner directly with retailers. Target announced that it is constructing a food distribution center in Lake City, Florida to supply frozen, refrigerated and fresh produce to stores in the Southeast.
Wal-Mart Stores Inc. (WMT) said same-store sales rose 2.2% in January. Wal-Mart Stores Inc.'s entry into movie downloading should have a bigger impact on the growth of digital video distribution in the near term than on the ultimate decline in DVD sales. Wal-Mart Stores announced the selling of downloads of movie and television shows on its Web site putting the firm in competition with Amazon.com and Apple's iTunes. Walt Disney Co. , Time Warner Inc.'s Warner Brothers, Viacom Inc.'s Paramount Pictures, Sony Corp. , News Corp.'s 20th Century Fox, and Universal Pictures, a unit of NBC Universal, which is a subsidiary of General Electric Co. are inking the deals with Wal-Mart. Wal-Mart Chief Executive Lee Scott unveiled a new "Sustainability 360" environmental plan on Thursday, challenging employees, suppliers and customers to remove nonrenewable energy from their lives.
Yahoo Inc. (YHOO) and General Motors Corp. (GM) introduced a new Web site called Pontiac Underground, the first of an expected string of sites touting non-entertainment brands. The Web site, now part of Yahoo's autos section, is geared towards Pontiac enthusiasts and is a mash-up of several of Yahoo's social media features, including its photo uploading Flickr, Yahoo Answers, and Yahoo Video. EMI announced that it has put out songs from three artists: Norah Jones, Relient K and Lily Allen. Jones and Relient K songs were sold in open format on Yahoo Inc.'s music site, and Allen's tunes were made available through a preordering system via text messages. Yahoo Inc. said it planned to build individual Web sites around 100 entertainment "brands" this year that would pull together content from Yahoo's online properties, The New York Times reported. Yahoo! launched the early version of Panama.
References:
Reuters
Dow Jones Newswire
Marketwatch
New York Times
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index is even more impressive, and has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols is presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
Disclaimer: I began investing in the Innovators comprising The Innovation Index starting in 2007.
Sunday, February 4, 2007
How can Dell turnaround Dell, beat HP and become the number one computer company?
Dell Inc. (NASDAQ: DELL) is one of the Top 20 Innovators of The Innovation Index. Dell has seen its market cap go down by about 20% in the last thirteen months, in large part due to average quarterly and annual top-line revenue growth, reduced profits, and losing the number one position as the world’s top supplier of new computers to Hewlett-Packard (HP) (NYSE: HPQ). Michael Dell, the founder, founding CEO and chairman of Dell Inc., took over the CEO roll of Dell again. Dell made Dell the number one computer company in the world. Now, Dell has perhaps the toughest act of his career: Turnaround Dell, beat HP, and make Dell the number one computer company in the world – again!
How can Dell turnaround Dell?
Dell has to go back to basics. What made Dell the number one computer company in the first place? Computers. Dell computers, laptops and servers were considered the best in the industry. And Dell became the household name when it came to buying computers. Dell was the perceived high quality brand. Dell must focus on the core business: Computers. Rather than creating average computers and discounting the computers to gain market share, Dell needs to design a new line of computers that appeal to the masses, business, government and IT.
For example, why can’t Dell design a computer only for school students? A specific computer made for the students in K-12 market, and college students? Not just a computer marketed to the schools – rather a computer that is designed with the need of students in mind from the inside out. This must include educational software, computer design that integrates needs of students (for instance, a scientific calculator on the keyboard), and online services that students are most likely to use. Dell = education computers for students.
Dell has to appeal to the teenager market. Teenagers are the high growth market, and they have money to spend – albeit they spend it on cool music and toys such as iPod. Dell must create a computer that appeals to the teenagers. Dell has to make Dell computers cool again. Dell should take a page out of Apple’s cool design and function. Dell = cool computers for teenagers.
Dell should also think about the market of women shoppers. There are many professional women buying computers, single households led by women who are looking to buy computers for themselves and kids, women in schools and colleges, and women in non-profits and government. What can Dell do to appeal to this largely ignored market? Can Dell create specialized computers that appeal to the needs of women at large? What would that line of computers look like? Dell = appealing computers for women.
When I go online to buy Dell computer, I can only buy one computer at a time or more than one computer of the same type on my own. Why is this so? What if I am looking to buy a laptop for me, a computer for my child, and a computer for my wife? Does Dell provide such a home bundle that I can readily choose. How about a Dell Home Bundle? Dell Home Bundle can include combinations of computers and laptops pre-packaged for various needs of the home, including home networks, wireless, entertainment center, etc. All I have to do is go online at Dell.com and choose Home Bundle. And I am provided various options all at once. Dell = Home Bundle.
Dell must make the business computers and servers the best in the business. Even a small business owner is looking for the very best at a reasonable price. Dell quality must become the standard in the industry. Dell performance must be second to none. Dell service should be topnotch. Dell must equate to the best investment there is when it comes to buying computers for business. First, Dell must make their computers the best there is in terms of quality, performance, service and price; second, Dell must market their computers to the business as the best there is and create this indelible brand perception; finally, Dell must provide a replacement program for old computers at businesses. Dell = Best Business computers.
How can Dell beat HP?
Dell became the number one computer company in the world with the Dell Direct business model. Consumers and small businesses went to Dell.com and easily configured the computer that they were looking for, and purchased it online. Dell promptly made this computer, and shipped it to you within a week. Larger businesses are also able to configure and buy their computers online; they also have the option of a dedicated account manager. The beauty of Dell Direct model was that there were no middle men – no margins, no distribution to worry about, and cutting-edge products. The Dell Direct model made sense during the Internet boom years and when the model was new and not easily imitable by Dell rivals such as HP. However, Direct model cannot be the *only* business model for buying computers.
If HP can sell computers online and also through retail channels, why can’t Dell do the same? Dell has to go retail – not just as an extension of the Dell Direct model, but as a completely new business. Consumers and businesses of today are researching and shopping online, researching online and buying retail, researching retail and buying online, researching retail and buying retail. Dell predominantly provides only one choice. Dell must find ways to open up the retail channel, and create computers specifically for the retail market. Dell can also provide kiosks at retail stores so that customers can simply configure computers at the retailers, and take immediate delivery at the store, buy a computer readily available at the retailer, or have it shipped to their homes or business. When Dell offers customers ready options where they can buy computers both online as well as in retail stores with the same ease as buying online, Dell would begin to grow the overall computer business and retake the lead from HP. This could easily take a year or two before Dell establishes itself as the premier Direct and retail computer brand.
How can Dell become the number one computer company in the world?
Customers outside the U.S. are used to buying computers through distributors, resellers, local companies who assemble computers, retail stores and through a lot of hand holding. The last point is very important: hand holding. Customers need advice on what is the best computer that meets their needs, and want to try out that computer in a store before they purchase it. There is even some negotiation involved. Customers need some help setting it up at their homes or business. The key insight: only a small segment of customers buy computers direct outside the U.S. The majority of the market does not buy direct. If this is the case, Dell must reinvent itself if it were to become a truly global player. Dell cannot sell only through Direct model outside the U.S. at least to emerging countries such as India, China, Russia, and Brazil. Dell should rather leverage the Dell brand and sell through the normal channels that the customers of these countries are acquainted with. HP’s market share grew in large part due to the worldwide shipments outside the U.S. HP has established retail, reseller and distribution channels worldwide. Dell must quickly do the same. And once the Dell brand is established in the country, Dell can then begin to introduce the Direct model. But Dell cannot, must not lead with the Direct model.
Michael Dell is a visionary, innovator and a creative leader, focused on execution and results. He made Dell the number one computer company in the world. Dell is on a mission to turnaround Dell, beat HP and make Dell the number one computer company in the world – again! If I were a betting man, I would definitely bet on Dell. If Dell is indeed successful in making Dell the number one computer company in the world again, Dell will forever be enshrined in the Hall of Fame of Visionary leaders of both 20th and 21st centuries.
References
The Innovation Index
How can Dell turnaround Dell?
Dell has to go back to basics. What made Dell the number one computer company in the first place? Computers. Dell computers, laptops and servers were considered the best in the industry. And Dell became the household name when it came to buying computers. Dell was the perceived high quality brand. Dell must focus on the core business: Computers. Rather than creating average computers and discounting the computers to gain market share, Dell needs to design a new line of computers that appeal to the masses, business, government and IT.
For example, why can’t Dell design a computer only for school students? A specific computer made for the students in K-12 market, and college students? Not just a computer marketed to the schools – rather a computer that is designed with the need of students in mind from the inside out. This must include educational software, computer design that integrates needs of students (for instance, a scientific calculator on the keyboard), and online services that students are most likely to use. Dell = education computers for students.
Dell has to appeal to the teenager market. Teenagers are the high growth market, and they have money to spend – albeit they spend it on cool music and toys such as iPod. Dell must create a computer that appeals to the teenagers. Dell has to make Dell computers cool again. Dell should take a page out of Apple’s cool design and function. Dell = cool computers for teenagers.
Dell should also think about the market of women shoppers. There are many professional women buying computers, single households led by women who are looking to buy computers for themselves and kids, women in schools and colleges, and women in non-profits and government. What can Dell do to appeal to this largely ignored market? Can Dell create specialized computers that appeal to the needs of women at large? What would that line of computers look like? Dell = appealing computers for women.
When I go online to buy Dell computer, I can only buy one computer at a time or more than one computer of the same type on my own. Why is this so? What if I am looking to buy a laptop for me, a computer for my child, and a computer for my wife? Does Dell provide such a home bundle that I can readily choose. How about a Dell Home Bundle? Dell Home Bundle can include combinations of computers and laptops pre-packaged for various needs of the home, including home networks, wireless, entertainment center, etc. All I have to do is go online at Dell.com and choose Home Bundle. And I am provided various options all at once. Dell = Home Bundle.
Dell must make the business computers and servers the best in the business. Even a small business owner is looking for the very best at a reasonable price. Dell quality must become the standard in the industry. Dell performance must be second to none. Dell service should be topnotch. Dell must equate to the best investment there is when it comes to buying computers for business. First, Dell must make their computers the best there is in terms of quality, performance, service and price; second, Dell must market their computers to the business as the best there is and create this indelible brand perception; finally, Dell must provide a replacement program for old computers at businesses. Dell = Best Business computers.
How can Dell beat HP?
Dell became the number one computer company in the world with the Dell Direct business model. Consumers and small businesses went to Dell.com and easily configured the computer that they were looking for, and purchased it online. Dell promptly made this computer, and shipped it to you within a week. Larger businesses are also able to configure and buy their computers online; they also have the option of a dedicated account manager. The beauty of Dell Direct model was that there were no middle men – no margins, no distribution to worry about, and cutting-edge products. The Dell Direct model made sense during the Internet boom years and when the model was new and not easily imitable by Dell rivals such as HP. However, Direct model cannot be the *only* business model for buying computers.
If HP can sell computers online and also through retail channels, why can’t Dell do the same? Dell has to go retail – not just as an extension of the Dell Direct model, but as a completely new business. Consumers and businesses of today are researching and shopping online, researching online and buying retail, researching retail and buying online, researching retail and buying retail. Dell predominantly provides only one choice. Dell must find ways to open up the retail channel, and create computers specifically for the retail market. Dell can also provide kiosks at retail stores so that customers can simply configure computers at the retailers, and take immediate delivery at the store, buy a computer readily available at the retailer, or have it shipped to their homes or business. When Dell offers customers ready options where they can buy computers both online as well as in retail stores with the same ease as buying online, Dell would begin to grow the overall computer business and retake the lead from HP. This could easily take a year or two before Dell establishes itself as the premier Direct and retail computer brand.
How can Dell become the number one computer company in the world?
Customers outside the U.S. are used to buying computers through distributors, resellers, local companies who assemble computers, retail stores and through a lot of hand holding. The last point is very important: hand holding. Customers need advice on what is the best computer that meets their needs, and want to try out that computer in a store before they purchase it. There is even some negotiation involved. Customers need some help setting it up at their homes or business. The key insight: only a small segment of customers buy computers direct outside the U.S. The majority of the market does not buy direct. If this is the case, Dell must reinvent itself if it were to become a truly global player. Dell cannot sell only through Direct model outside the U.S. at least to emerging countries such as India, China, Russia, and Brazil. Dell should rather leverage the Dell brand and sell through the normal channels that the customers of these countries are acquainted with. HP’s market share grew in large part due to the worldwide shipments outside the U.S. HP has established retail, reseller and distribution channels worldwide. Dell must quickly do the same. And once the Dell brand is established in the country, Dell can then begin to introduce the Direct model. But Dell cannot, must not lead with the Direct model.
Michael Dell is a visionary, innovator and a creative leader, focused on execution and results. He made Dell the number one computer company in the world. Dell is on a mission to turnaround Dell, beat HP and make Dell the number one computer company in the world – again! If I were a betting man, I would definitely bet on Dell. If Dell is indeed successful in making Dell the number one computer company in the world again, Dell will forever be enshrined in the Hall of Fame of Visionary leaders of both 20th and 21st centuries.
References
The Innovation Index
Friday, February 2, 2007
The Innovation Index Weekly Report for the week ending 01-31-07
Yahoo! Inc. (NASDAQ: YHOO) continues to lead The Top 20 Innovators in stock performance of The Innovation Index, with 11% gain for the year.
The Innovation Index was flat for the week ending January 31, 2007, and is up 4% in 2007. S & P 500 lost 1% last week. NASDAQ is up 2%, whereas S & P 500 and the Dow Jones Index are each up 1% in 2007. It was another tough week for the Top 20 Innovators – 12 innovators declined last week, only 4 gained some ground, and 4 stayed even.
The Innovation Index closed at 71.86 on January 31, 2007, up 2.48 points from the closing price of 69.38 on December 29, 2006.
Weekly Advances
eBay Inc. (NASDAQ: EBAY) led all Innovators with 8% gain in just one week, and is now up 8% for the year. eBay had a solid quarter, showed strength in the core auction business, and is reaping the benefits of innovations introduced in 2006. eBay is perhaps the dark horse of 2007. Hewlett-Packard (NYSE: HPQ) and IBM - (NYSE: IBM) each gained 2% for the week. Intel Corporation (NYSE: INTC) was up 1% for the week. I posted a story on Intel – The Innovator of the week touting Intel’s recently announced breakthrough innovation. There were no significant gains from other innovators last week.
Weekly Declines
3M Company (NYSE: MMM) dropped 7% last week owing to quarterly results that missed the analyst estimates, and the future outlook that did not really excite the analysts either. 3M is now down 5% for the year. However, this is still early in the year. Look for the seasoned innovator 3M to bounce back before the middle of the year. Microsoft Corporation (NASDAQ: MSFT) hot on the heels of the huge launch of Windows Vista was still down 1% for the week. The investors shrugged off the launch, and are perhaps looking at Microsoft to deliver on the promise of Vista - money, money, money. The key question: how many existing Windows customers will convert to Vista? We will be sure to watch when Microsoft announces next quarter's revenues, in particular existing customers who are moving to Vista.
Yearly Winners
Yahoo! (NASDAQ: YHOO) is leading the top 20 innovators with 11% stock performance gain for the year. Google (NASDAQ: GOOG) is next with 9% gains for the year; however, as I write this weekly report, Google is down in the last couple of days as the investors reacted less favorably to Google's latest quarterly results. eBay and Target Corporation (NYSE: TGT) are both tied with 8% gains for the year. Look who is on the rise again: Hewlett-Packard (NYSE: HPQ) has almost quietly notched gains of 5% for the year already. HP was tied as The Top Innovator of 2006, and had a huge gain of 45% last year. HP is back again with 5% gain in the first month of the year.
I posted The Innovation Index Annual Report earlier in the year that included three Chapters:
Chapter One - Total Innovation Activity at The Top 20 Innovators
Chapter Two - The Top Innovator - The Innovator of Innovators
Chapter Three - The Innovation Insights and Roundup
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.
The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index is even more impressive, and has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
References:
The Innovation Index
The Innovation Index Annual Report – Chapter One
The Innovation Index Annual Report – Chapter Two
The Innovation Index Annual Report – Chapter Three
Disclaimer: I invest in the stocks comprising The Innovation Index, beginning in 2007.
The Innovation Index was flat for the week ending January 31, 2007, and is up 4% in 2007. S & P 500 lost 1% last week. NASDAQ is up 2%, whereas S & P 500 and the Dow Jones Index are each up 1% in 2007. It was another tough week for the Top 20 Innovators – 12 innovators declined last week, only 4 gained some ground, and 4 stayed even.
The Innovation Index closed at 71.86 on January 31, 2007, up 2.48 points from the closing price of 69.38 on December 29, 2006.
Weekly Advances
eBay Inc. (NASDAQ: EBAY) led all Innovators with 8% gain in just one week, and is now up 8% for the year. eBay had a solid quarter, showed strength in the core auction business, and is reaping the benefits of innovations introduced in 2006. eBay is perhaps the dark horse of 2007. Hewlett-Packard (NYSE: HPQ) and IBM - (NYSE: IBM) each gained 2% for the week. Intel Corporation (NYSE: INTC) was up 1% for the week. I posted a story on Intel – The Innovator of the week touting Intel’s recently announced breakthrough innovation. There were no significant gains from other innovators last week.
Weekly Declines
3M Company (NYSE: MMM) dropped 7% last week owing to quarterly results that missed the analyst estimates, and the future outlook that did not really excite the analysts either. 3M is now down 5% for the year. However, this is still early in the year. Look for the seasoned innovator 3M to bounce back before the middle of the year. Microsoft Corporation (NASDAQ: MSFT) hot on the heels of the huge launch of Windows Vista was still down 1% for the week. The investors shrugged off the launch, and are perhaps looking at Microsoft to deliver on the promise of Vista - money, money, money. The key question: how many existing Windows customers will convert to Vista? We will be sure to watch when Microsoft announces next quarter's revenues, in particular existing customers who are moving to Vista.
Yearly Winners
Yahoo! (NASDAQ: YHOO) is leading the top 20 innovators with 11% stock performance gain for the year. Google (NASDAQ: GOOG) is next with 9% gains for the year; however, as I write this weekly report, Google is down in the last couple of days as the investors reacted less favorably to Google's latest quarterly results. eBay and Target Corporation (NYSE: TGT) are both tied with 8% gains for the year. Look who is on the rise again: Hewlett-Packard (NYSE: HPQ) has almost quietly notched gains of 5% for the year already. HP was tied as The Top Innovator of 2006, and had a huge gain of 45% last year. HP is back again with 5% gain in the first month of the year.
I posted The Innovation Index Annual Report earlier in the year that included three Chapters:
Chapter One - Total Innovation Activity at The Top 20 Innovators
Chapter Two - The Top Innovator - The Innovator of Innovators
Chapter Three - The Innovation Insights and Roundup
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.
The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index is even more impressive, and has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
References:
The Innovation Index
The Innovation Index Annual Report – Chapter One
The Innovation Index Annual Report – Chapter Two
The Innovation Index Annual Report – Chapter Three
Disclaimer: I invest in the stocks comprising The Innovation Index, beginning in 2007.
Tuesday, January 30, 2007
Top Ten Creative Leadership Traits
Creative leaders continually meet new challenges, and recognize and pursue new opportunities through bold innovations.
What are the top ten characteristics and traits of Creative Leaders?
1. Great at generating many ideas – innovative, game changing and even commonplace.
2. Always looking to experiment with good ideas. Sometimes, trying out a few times.
3. Unwavering belief in their creativity and innovation, coupled with originality in thinking.
4. Smart and bright with a positive self-image. More often, they are not born geniuses.
5. Passionate, expressive and sensitive to their teams, colleagues and surroundings.
6. Demonstrate superior judgment, and do not make quick decisions (although have a gut feel).
7. Non-conformists and independent, requiring less social approval than most people.
8. Innate ability to understand and solve the problem, and manage the consequences.
9. Born dreamers with strong imagination; however, manage to keep things in perspective.
10. Create and launch game changing products meeting a high level of quality and design.
Which creative leaders demonstrate these qualities among the top 20 Innovators of The Innovation Index?
Steve Jobs, co-founder and CEO of Apple, Inc., immediately comes to mind with market leading innovations including iPod, iMac and soon to be launched iPhone.
Larry Page and Sergey Brin, founders of Google, developed the innovative search technology that provides relevant answers which went on to become the world’s largest search engine.
Jeff Bezos, founder and CEO of Amazon.com, made the world’s largest online bookstore and the most popular online retail site.
Pierre Omidyar, founder and chairman of eBay, changed the face of Internet commerce in 1995 when he launched eBay which went on to become the world’s largest marketplace.
A.G. Lafley, CEO of Proctor & Gamble, states: “Great leaders create conditions that get people organized to attack problems. They help others learn how to think, how to exercise judgment and how to take action.” (at a Kellogg event)
Michael Dell, founder and chairman of Dell, who always thought big, and made Dell the number one computer company, and is on a mission to connect the next billion people all over the world.
Jim Donald, president and CEO of Starbucks, who is fanatical about communicating using his Treo, replies to every email, returns calls at 6 a.m., and always stays close to the customers.
How about Steve Ballmer, CEO, and Bill Gates, founder and chairman of Microsoft, who made Microsoft the world's largest software company.
Every CEO and founder of the Top 20 Innovators on The Innovation Index is a Creative Leader.
As Sam Walton, founder of Wal-Mart, once said:
“I have always been driven to buck the system, to innovate, to take things beyond where they've been.”
If you enjoyed reading this Creativity best practice, I recommend the complete list of Creativity Innovation Best Practices.
References:
eCornell: Leading through Creativity
What are the top ten characteristics and traits of Creative Leaders?
1. Great at generating many ideas – innovative, game changing and even commonplace.
2. Always looking to experiment with good ideas. Sometimes, trying out a few times.
3. Unwavering belief in their creativity and innovation, coupled with originality in thinking.
4. Smart and bright with a positive self-image. More often, they are not born geniuses.
5. Passionate, expressive and sensitive to their teams, colleagues and surroundings.
6. Demonstrate superior judgment, and do not make quick decisions (although have a gut feel).
7. Non-conformists and independent, requiring less social approval than most people.
8. Innate ability to understand and solve the problem, and manage the consequences.
9. Born dreamers with strong imagination; however, manage to keep things in perspective.
10. Create and launch game changing products meeting a high level of quality and design.
Which creative leaders demonstrate these qualities among the top 20 Innovators of The Innovation Index?
Steve Jobs, co-founder and CEO of Apple, Inc., immediately comes to mind with market leading innovations including iPod, iMac and soon to be launched iPhone.
Larry Page and Sergey Brin, founders of Google, developed the innovative search technology that provides relevant answers which went on to become the world’s largest search engine.
Jeff Bezos, founder and CEO of Amazon.com, made the world’s largest online bookstore and the most popular online retail site.
Pierre Omidyar, founder and chairman of eBay, changed the face of Internet commerce in 1995 when he launched eBay which went on to become the world’s largest marketplace.
A.G. Lafley, CEO of Proctor & Gamble, states: “Great leaders create conditions that get people organized to attack problems. They help others learn how to think, how to exercise judgment and how to take action.” (at a Kellogg event)
Michael Dell, founder and chairman of Dell, who always thought big, and made Dell the number one computer company, and is on a mission to connect the next billion people all over the world.
Jim Donald, president and CEO of Starbucks, who is fanatical about communicating using his Treo, replies to every email, returns calls at 6 a.m., and always stays close to the customers.
How about Steve Ballmer, CEO, and Bill Gates, founder and chairman of Microsoft, who made Microsoft the world's largest software company.
Every CEO and founder of the Top 20 Innovators on The Innovation Index is a Creative Leader.
As Sam Walton, founder of Wal-Mart, once said:
“I have always been driven to buck the system, to innovate, to take things beyond where they've been.”
If you enjoyed reading this Creativity best practice, I recommend the complete list of Creativity Innovation Best Practices.
References:
eCornell: Leading through Creativity
Sunday, January 28, 2007
How much Creativity is enough?
How much creativity is enough? Is there an optimal level of creativity for a person to have? Is it possible to be “too creative?” Is it true, or a myth, that creative people can be difficult to manage?
Creativity generates Ideas. Ideas generate Innovations. Innovations generate New Products. New Products make company successful in the long term. A company can never have too much creativity. Creativity can give rise to new products that may fail. However, without creativity, there are no new products. Creativity and Innovation define the future of any business. The day creativity is thought to be enough, the company stops innovating, stops creating great new products, becomes complacent and eventually ceases to exist.
Too much creativity or optimal level of creativity depends on the company, its culture and its individuals. Creativity in a corporate environment needs to be channelled to produce great products. Employing creative individuals in specific business units such as marketing, desktop publishing, web business, advertising or new product development makes business sense. An optimal level of creativity can be achieved within the organization as a whole, where the appropriate guidelines and frameworks are in place for creative individuals and their ideas, and to convert such creativity into viable business solutions. If the individual is employed in a role that requires creativity, there cannot be too much of it – however a defined structure that sets boundaries, such as market needs, financial constraints, resource availability, project checklist and milestones, etc. can drive measurable, sustainable and innovative results. When the business risks grow, a methodical framework or business process needs to be implemented to translate creative ideas into viable business enterprises.
An experienced manager knows how to manage creativity and creative individuals without coming in the way of generating new ideas. Creative individuals have the innate ability to visualize the end product; however, at times this is also coupled with the complexity to execute on a plan to get there. The key is to provide the creative individuals a platform to be creative, and lead their ideas into markets. Surrounding creative individuals with the appropriate infrastructure and resources to convert their ideas into workable solutions can be very rewarding and profitable. On the contrary, leaving them to their own devices can potentially result in chaos, delayed delivery, under delivery on commitments, overspending and incomplete end results.
Creative individuals can tend to be independent, expressive and passionate. Their mindset stems from the cultural differences between highly creative and operational organizational norms. For example, creative individuals thrive on generating ideas, and asking the "what if" questions. Some managers may prefer efficiency to unproven ideas and rhetorical questions. A manager can nurture their entrepreneurial spirit, and yet manage them well in group settings and staff meetings. There is also the possibility of expansive dialogs and debates, especially when a manager rejects an idea or two from a creative individual. This is perhaps the most challenging aspect of managing a creative individual: how to say "No" to certain ideas that may make compelling sense to the individual?
Creativity is paramount to the success of any business. Creativity drives Ideas. Ideas drive Innovations. Innovations drive New Products and Markets. Creativity And Innovation drive business.
If you enjoyed reading this Creativity best practice, I recommend the complete list of Creativity Innovation Best Practices.
References:
eCornell: Leading Through Creativity
Creativity generates Ideas. Ideas generate Innovations. Innovations generate New Products. New Products make company successful in the long term. A company can never have too much creativity. Creativity can give rise to new products that may fail. However, without creativity, there are no new products. Creativity and Innovation define the future of any business. The day creativity is thought to be enough, the company stops innovating, stops creating great new products, becomes complacent and eventually ceases to exist.
Too much creativity or optimal level of creativity depends on the company, its culture and its individuals. Creativity in a corporate environment needs to be channelled to produce great products. Employing creative individuals in specific business units such as marketing, desktop publishing, web business, advertising or new product development makes business sense. An optimal level of creativity can be achieved within the organization as a whole, where the appropriate guidelines and frameworks are in place for creative individuals and their ideas, and to convert such creativity into viable business solutions. If the individual is employed in a role that requires creativity, there cannot be too much of it – however a defined structure that sets boundaries, such as market needs, financial constraints, resource availability, project checklist and milestones, etc. can drive measurable, sustainable and innovative results. When the business risks grow, a methodical framework or business process needs to be implemented to translate creative ideas into viable business enterprises.
An experienced manager knows how to manage creativity and creative individuals without coming in the way of generating new ideas. Creative individuals have the innate ability to visualize the end product; however, at times this is also coupled with the complexity to execute on a plan to get there. The key is to provide the creative individuals a platform to be creative, and lead their ideas into markets. Surrounding creative individuals with the appropriate infrastructure and resources to convert their ideas into workable solutions can be very rewarding and profitable. On the contrary, leaving them to their own devices can potentially result in chaos, delayed delivery, under delivery on commitments, overspending and incomplete end results.
Creative individuals can tend to be independent, expressive and passionate. Their mindset stems from the cultural differences between highly creative and operational organizational norms. For example, creative individuals thrive on generating ideas, and asking the "what if" questions. Some managers may prefer efficiency to unproven ideas and rhetorical questions. A manager can nurture their entrepreneurial spirit, and yet manage them well in group settings and staff meetings. There is also the possibility of expansive dialogs and debates, especially when a manager rejects an idea or two from a creative individual. This is perhaps the most challenging aspect of managing a creative individual: how to say "No" to certain ideas that may make compelling sense to the individual?
Creativity is paramount to the success of any business. Creativity drives Ideas. Ideas drive Innovations. Innovations drive New Products and Markets. Creativity And Innovation drive business.
If you enjoyed reading this Creativity best practice, I recommend the complete list of Creativity Innovation Best Practices.
References:
eCornell: Leading Through Creativity
Wednesday, January 24, 2007
Yahoo!, Google and Target Leading The Innovation Index
The Innovation Index Weekly Report for the Week Ending 01-24-2007
Google (NASDAQ: GOOG), Target (NYSE: TGT) and Yahoo! (NASDAQ: YHOO) are the early 2007 leaders of The Innovation Index notching stock gains of 8%, 8% and 13% respectively. Microsoft (NASDAQ: MSFT) and Wal-Mart Stores (NYSE: WMT) round out the Top Five with stock performance gains of 4% and 5% each. What's remarkable is that both Target and Wal-Mart have already performed better than all of 2006. The big mover of the week was America Movile (NYSE: AMX) gaining 4% last week, and is now up 1% for the year. Apple (NASDAQ: AAPL) led all decliners with a 9% drop in just one week; Apple is still up 2% for the year. It was a tough week for the Top 20 Innovators. 8 of the 20 Innovators declined last week. 8 Innovators stayed even, and only 4 Innovators stayed in the black. Yahoo! leads all Innovators in 2007 in stock performance.
Yahoo! had solid results in its latest quarter. Not only did Yahoo! beat the analyst estimates, Yahoo! also pre-announced Panama, the souped up Search technology that will rival Google and bring in more revenues and profits for Yahoo! in 2007 and beyond. Yahoo! is planning to roll out Panama in first week of February, 2007. Overall, the market seems bullish on Yahoo!'s Panama innovation.
eBay (NASDAQ: EBAY) announced its earnings today beating the analyst estimates; the stock is already up in after market by more than 10%. eBay's 2006 innovations are finally paying off in 2007 in the core auction business. PayPal business is also doing well for eBay. Watch out for eBay's turnaround, and wild ride up in stock performance.
Who is benefiting from these solid results of Yahoo! and eBay? Google of course, gaining 8% for the year. Google is planning to digitize more than a million books from my Alma Matter, The University of Texas at Austin, including their famous Latin American collection. Google also announced new innovations for the Google Earth, SketchUp, Groups, Search Appliance, Mobile and partnerships with Samsung and China Mobile.
Target Stores (NYSE: TGT) is off to a great start in 2007. Target announced a dividend of 12 cents a share, reaffirmed the sales forecasts for January, and is leading the retail boom.
The Innovation Index closed at 72.01, down 1% for the week, up 4% in 2007. NASDAQ is up 2%, whereas S & P 500 and the Dow Jones Index are each up 2% in 2007. The Innovation Index continues to perform well versus the major indices. Would this trend continue for the rest of 2007?
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.
The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index is even more impressive, and has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols is presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
Disclaimer: I began investing in the Innovators comprising The Innovation Index starting in 2007.
Google (NASDAQ: GOOG), Target (NYSE: TGT) and Yahoo! (NASDAQ: YHOO) are the early 2007 leaders of The Innovation Index notching stock gains of 8%, 8% and 13% respectively. Microsoft (NASDAQ: MSFT) and Wal-Mart Stores (NYSE: WMT) round out the Top Five with stock performance gains of 4% and 5% each. What's remarkable is that both Target and Wal-Mart have already performed better than all of 2006. The big mover of the week was America Movile (NYSE: AMX) gaining 4% last week, and is now up 1% for the year. Apple (NASDAQ: AAPL) led all decliners with a 9% drop in just one week; Apple is still up 2% for the year. It was a tough week for the Top 20 Innovators. 8 of the 20 Innovators declined last week. 8 Innovators stayed even, and only 4 Innovators stayed in the black. Yahoo! leads all Innovators in 2007 in stock performance.
Yahoo! had solid results in its latest quarter. Not only did Yahoo! beat the analyst estimates, Yahoo! also pre-announced Panama, the souped up Search technology that will rival Google and bring in more revenues and profits for Yahoo! in 2007 and beyond. Yahoo! is planning to roll out Panama in first week of February, 2007. Overall, the market seems bullish on Yahoo!'s Panama innovation.
eBay (NASDAQ: EBAY) announced its earnings today beating the analyst estimates; the stock is already up in after market by more than 10%. eBay's 2006 innovations are finally paying off in 2007 in the core auction business. PayPal business is also doing well for eBay. Watch out for eBay's turnaround, and wild ride up in stock performance.
Who is benefiting from these solid results of Yahoo! and eBay? Google of course, gaining 8% for the year. Google is planning to digitize more than a million books from my Alma Matter, The University of Texas at Austin, including their famous Latin American collection. Google also announced new innovations for the Google Earth, SketchUp, Groups, Search Appliance, Mobile and partnerships with Samsung and China Mobile.
Target Stores (NYSE: TGT) is off to a great start in 2007. Target announced a dividend of 12 cents a share, reaffirmed the sales forecasts for January, and is leading the retail boom.
The Innovation Index closed at 72.01, down 1% for the week, up 4% in 2007. NASDAQ is up 2%, whereas S & P 500 and the Dow Jones Index are each up 2% in 2007. The Innovation Index continues to perform well versus the major indices. Would this trend continue for the rest of 2007?
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.
The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index is even more impressive, and has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols is presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
Disclaimer: I began investing in the Innovators comprising The Innovation Index starting in 2007.
Monday, January 22, 2007
Innovation And Stock Performance Correlation
In Chapter Two of the Innovation Index Annual Report, I compared the Stock Performance of The Top 20 Innovators with Total Innovations - Innovation Activity comprising of new products, collaborations and acquisitions for 2006.
I have created the Innovation - Stock Performance Correlation Chart that demonstrates this correlation between the two variables:
I have created the Innovation - Stock Performance Correlation Chart that demonstrates this correlation between the two variables:
What are some insights to be gained from this?
There is a very high probability between Positive Stock Performance and Total Innovations with the magic number of 70.
Eight of the Nine Innovators, or 89%, who had Total Innovations of about 70 or higher exhibited a Positive Stock Performance in 2006 (Apple had 69 innovations). The average Stock Performance gain of these eight Innovators was 34% in 2006. Only Yahoo! exhibited negative stock gains in 2006 out of this group.
On the other hand, there is a good probability between Negative or Even Stock Performance and Total Innovations that are less than 65.
Six of the Eleven Innovators, or 54%, who had Total Innovations less than 65 exhibited a Negative or Even Stock Performance in 2006. Clearly, the correlation between Negative Stock Performance and Total Innovations less than 65 is demonstrably weak.
We will check again in 2007 on whether this correlation holds, the magic Total Innovation number of 70 stays at 70, or new trends emerge.
I am not trying to imply that Stock Performance only depends on Total Innovations. As we know very well, Stock Performance depends heavily on Current Earnings, Future Outlook, Revenue and Earnings Growth besides other environmental factors. However, it is interesting to correlate Stock Performance with Total Innovations, and whether the Innovation Output of an Organization leads to current or future Stock Performance gains.
For instance, are Yahoo!'s 77 Innovations in 2006 helping Yahoo!’s Stock Performance in 2007? Did the pipeline of New Innovations introduced in 2006 is resulting in positive Stock Performance in 2007? What about IBM who had a whopping 187 new Innovations? IBM should clearly do well in 2007. Or would it?
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index is even more impressive, and has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
Friday, January 19, 2007
Yahoo! leads all Innovators - The Innovation Index up 5% in 2007
The Innovation Index gained 1% for the week ending January 17, 2007, and is already up 5% in 2007. The major indices gained 1% each last week. NASDAQ is up 3%, whereas S & P 500 and the Dow Jones Index are each up 1% in 2007.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
Chapter Three - The Innovation Insights and Roundup
I will be posting an analysis of last week's Innovation Activity at The Top 20 Innovators by early next week.
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.
The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index is even more impressive, and has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
The Innovation Index closed at 72.58 on January 17, 2007, up 3.20 points from the closing price of 69.38 on December 29, 2006.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
Yahoo! (NASDAQ: YHOO) is leading the top 20 innovators with 14% stock performance gain for the year. Apple Inc. (NASDAQ: AAPL) and Google (NASDAQ: GOOG) are in hot pursuit gaining 12% and 8% each. Target Corporation (NYSE: TGT) gained 4% for the week, and is up 6% in 2007, already beating its 2006 gains of 5%. Only three of the 20 innovators are in red.
I posted The Innovation Index Annual Report comprising three Chapters:
Chapter One - Total Innovation Activity at The Top 20 Innovators
I posted The Innovation Index Annual Report comprising three Chapters:
Chapter One - Total Innovation Activity at The Top 20 Innovators
Chapter Three - The Innovation Insights and Roundup
I will be posting an analysis of last week's Innovation Activity at The Top 20 Innovators by early next week.
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.
The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index is even more impressive, and has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
Thursday, January 18, 2007
The Innovation Insights - The Innovation Index Annual Report - Chapter Three
The Innovation Index Annual Report – Chapter One reported the total Innovation Activity in 2006 at the Top 20 Innovators. It also correlated the stock performance of the Top 20 Innovators with their Innovation Activity – Total Innovations introduced across New Products, Collaborations and Acquisitions. The Top Innovator – The Innovator of Innovators was announced in Chapter Two of The Innovation Index Annual Report.
Chapter Three of The Innovation Index Annual Report summarizes the Five Principles driving successful Innovations, key Innovation Insights gained over 2006, Innovation Trends and further explanation on the Rankings.
My observation and analysis on how the Top 20 Innovators drive Innovation led me to summarize the following five principles for successful innovation:
The Five Principles for Successful Innovation
Successful business innovations that drive growth are guided by the following five principles:
1. Vision to create new products, business models or processes that make a difference and create new markets
2. Systematic processes and rigor that stimulate creativity and learning to execute on the vision
3. Reward and recognition system for teams to take measured risks and experiment
4. Focus on clear and present customer needs, the market facts, and the intangible
5. Growth-oriented leadership that is decisive, inclusive, focused, takes risks, and has market expertise
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
If you enjoyed reading the five principles, I also recommend the complete list of Creativity Innovation Best Practices.
Chapter Three of The Innovation Index Annual Report summarizes the Five Principles driving successful Innovations, key Innovation Insights gained over 2006, Innovation Trends and further explanation on the Rankings.
My observation and analysis on how the Top 20 Innovators drive Innovation led me to summarize the following five principles for successful innovation:
The Five Principles for Successful Innovation
Successful business innovations that drive growth are guided by the following five principles:
1. Vision to create new products, business models or processes that make a difference and create new markets
2. Systematic processes and rigor that stimulate creativity and learning to execute on the vision
3. Reward and recognition system for teams to take measured risks and experiment
4. Focus on clear and present customer needs, the market facts, and the intangible
5. Growth-oriented leadership that is decisive, inclusive, focused, takes risks, and has market expertise
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
If you enjoyed reading the five principles, I also recommend the complete list of Creativity Innovation Best Practices.
Since September 2006, when I began this blog on Creativity And Innovation Driving Business, I have studied and reported on most of the Top 20 Innovators of The Innovation Index and some of their Disruptors. Here is a quick recap, beginning with the first story:
1. Google - Can Ambiguity and Chaos Create Innovation? You bet...
What's amazing is Google continues to innovate using what is described as "spaghetti method of product development (toss against wall, see if sticks)" requiring all Engineers to spend at least 20% of their time on new ideas.
2. Yahoo! - Hackers, Controlled Chaos and Innovation
If Yahoo! is indeed successful in finding "new twists on Yahoo services" through a controlled chaos of an event such as this with all the hackers, it would certainly be a first in their long page of innovations.
3. 3M and Johnson & Johnson - Failures and Stumbles driving Innovation
The failures result at J & J from the fact that the company emphasizes placing bets on many potential opportunities--most opportunities possibly fail, but the ones that do succeed, they succeed big. The bets, or the experimentation, are an essential price to pay for successful Innovation and Long-term growth
4. Wal-Mart - The Green Innovation
Green Innovation is a win-win for the business, the environment and the community. The business creates a better image, saves money and potentially creates new revenues. The environment becomes safer and cleaner. The community benefits with better health and enjoyment from a cleaner environment.
5. Intuit - Creating Innovations in Software Industry
Intuit's Innovation Recipe: Customer Evangelist Culture, Customer-Intuitive Design, Customer-driven Marketing and Product Management, Direct Marketing and Retailing, The Process driving Innovation.
6. Google - Acquisiton of YouTube. $1.65 billion Innovation and counting
YouTube Innovations: First, the vision of Founders to create a Video download service for FREE. Second, the intense focus on providing the best and most comprehensive experience for users interested in uploading, watching and sharing videos. Finally, YouTube created key partnerships with various Music and Broadcast players in the industry.
7. Toyota - Innovation Factory
Toyota's Innovation Principles: 7.1. The Art of Ingenuity. 7.2. The (relentless) Pursuit of Perfection. 7.3. The Rhythm of Fit.
Innovation Traps: 7.1. Swinging For Fences. 7.2. Getting Too Clever 7.3. Solving Problems Frivolously.
8. Apple - iPod - Apple's Best Innovation
iPod, powered by Apple, introduced in 2001 and masterminded by Steve Jobs, combines outstanding design, easy-to-use interface, superb performance, and an experience like no other. Apple assumed the world’s number one innovative company position and held it again in 2006 in large part due to the exponential growth of iPod – aptly called the iPod phenomenon.
9. Microsoft - The Innovator
Is Microsoft launching a new wave of innovation with Windows Vista, Office 2007 and Exchange 2007 and some 30 new products? Or are these merely nice-to-have product enhancements that users were asking for, and were just delayed for the past few years? Who is going to benefit the most from this new wave?
10. General Electric and Proctor & Gamble - Innovations Driving Growth
GE's innovation recipe: 10.1. Focus on key technologies. 10.2. Growth-oriented leadership 10.3. Core Business portfolio.
P&G's innovation recipe: 10.4. Brand mix. 10.4. Global top team. 10.6. New product collaborations.
11. 3M - The Innovation Machine
Five takeaways stimulating Innovation:
11.1. "Give it a try--and quick!"
11.2. "Accept that mistakes will be made."
11.3. "Take small steps."
11.4. "Give people the room they need."
11.5. "Mechanisms - build that ticking clock!"
12. Southwest Airlines - Flying High with Innovations
It is technology innovations such as DING! that bring Southwest that much closer to its customers who leverage the communication and messaging service to buy more tickets, besides new destinations, low fares, new nonstop services, new vacation packages and more
13. Starbucks - Innovations Brewing at Starbucks
Starbucks has become a pervasive coffee brand throughout the world, and the company is cleverly exploiting the Starbucks brand to launch new innovations in complementary and adjacent industries accounting for the solid revenue growth.
I discovered several new Innovation Trends shaping The Top 20 Innovators, and the industry at large:
1. The Innovation Gap
While the Sustainer is Innovating at a different pace and trajectory serving the needs of its profitable and larger customers, and focused on profitable investments, the Disrupter is Innovating at a faster pace and trajectory serving the needs of the broader market, and creating new market share.
2. Can Leadership Create Innovation?
Key Executives believe the following ingredients drive Innovation:
2.1. Marketing 2.2. Size 2.3. Culture 2.4. Technology 2.5. Passion 2.6. Active Participation 2.7. Hard Work 2.8. Internal Development 2.9. Targeted Acquisitions 2.10. Agility
3. Blocking Creativity and Innovation
Key processes that an organization can create to unblock Creativity and drive Innovation:
3.1. Open communication within and between departments, and across all management layers.
3.2. Hiring of people with diverse backgrounds and experience, and avoiding "cloning."
3.3. Encouraging employees to find new ways to do their daily work, and empowering them to make decisions.
3.4. Creating an organization that extends out to customers, suppliers, partners, and environment.
3.5. Stimulating research activities and providing employees some free time to experiment.
3.6. Allowing employees to take measured risks (with small costs), and seizing opportunities.
3.7. Creating processes to evaluate any idea on merit, regardless of where it is coming from.
3.8. Identifying and separating the creative from operational functions in the organization.
3.9. Using group creativity techniques frequently to promote team building and generate new ideas
4. Co-Creation driving Innovation
As Co-Creation demonstrates tangible results, more mainstream businesses will experiment and adopt it - not just technology companies. The best side effect of Co-Creation is it brings you that much closer to your customers and creates a positive business environment.
5. Six Ways to Find Innovation
How can an organization find Innovation? Here are Six Ways to Find Innovation:
5.1. Stand in different places
5.2. Use the lenses of other domains
5.3. Ask powerful questions
5.4. Foster new knowledge
5.5. Create a visual verbal journal
5.6. Change the pace of attention
I introduced The Innovation Index in December 2006 from an epiphany born out of the BusinessWeek article on the world's top innovators. The Innovation Index Report incorporates the following objectives and is released weekly:
1. Report, analyze and project the stock performance of the top 20 Innovators in North America every week, and compare their performance to S&P, NASDAQ and Dow Jones.
2. Compare and contrast best practices, initiatives, new products, successes, strategies, stories, leadership and insights on Creativity and Innovation at the top 20 Innovators.
3. Showcase Disruptors challenging these top Innovators, their disruptive innovation strategy, and their current and potential impact on the Innovators' customer base and market share.
This brings me back to this, the final chapter of The Innovation Index Annual Report: Chapter Three - The Insights.
Why did I not choose Apple and Google as the top two innovators in The Innovation Index Rankings for 2006? Why is Microsoft ahead of them for 2006? Why is Research In Motion also ahead of Apple and Google for 2006? Why are IBM and HP tied for the top rankings? What about Cisco Systems and GE?
The primary reason was Stock Performance in 2006. Apple and Google each gained 18% and 11% in stock performance gains in 2006. Microsoft stock gained 16%. Research In Motion stock gained 94%. IBM stock gained 20%. HP stock gained 45%. Cisco stock was up 60%, and GE stock was up 9%.
The secondary reason was Innovation Activity in 2006. Apple and Google had innovation activity of 69 and 75 total innovations in 2006. Microsoft had innovation activity of 159 total innovations in 2006. Research In Motion had innovation activity of 87 new innovations. IBM led all innovators with 187 innovations in 2006. HP had 106 innovations. Cisco had 72 innovations, and GE had 79 innovations in 2006. One can argue though that press releases touting incremental enhancements and basic collaborations are hardly new innovations. However, it appears though that most innovators are leveraging the media to make every announcement. Perhaps a filter to weed out the run-of-the-mill announcements may be required in 2007.
The final reason was the X Factor. Apple's iPod line of products in 2006 had key expansions from 2005; on the other hand the new iMac came onto its own in 2006 with the new Intel dual core series and support for Windows. The biggest draw for Apple though was the iPod integration partnerships with major airlines and major auto makers. Google's search engine leadership and related innovations were introduced before 2006; Google expanded on Search in 2006. Google Earth became the innovative application for mapping, and the acquisition of YouTube was the clincher. Microsoft introduced the much awaited Vista, Office, Live services, Pay-As-You-Go computing and Mobile. Research In Motion went on a tear with Blackberry Connect and Blackberry business expansion all over the world. New patents introduction were also key. IBM, HP, Intel, Microsoft and GE led all innovators in filing new patents.
A ranking of the top 20 Innovators in North America is inherently controversial. After all, we are talking about the best of the best. And each Innovator in turn is a fierce competitor. I would be sure to read the new edition of BusinessWeek when it announces the annual rankings of the world's top innovators. What I have tried though is to correlate Stock Performance, Innovation Activity and the X Factor. Together, the Top 20 Innovators of The Innovation Index are a barometer of the Innovation Activity in North America.
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.
The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
1. Google - Can Ambiguity and Chaos Create Innovation? You bet...
What's amazing is Google continues to innovate using what is described as "spaghetti method of product development (toss against wall, see if sticks)" requiring all Engineers to spend at least 20% of their time on new ideas.
2. Yahoo! - Hackers, Controlled Chaos and Innovation
If Yahoo! is indeed successful in finding "new twists on Yahoo services" through a controlled chaos of an event such as this with all the hackers, it would certainly be a first in their long page of innovations.
3. 3M and Johnson & Johnson - Failures and Stumbles driving Innovation
The failures result at J & J from the fact that the company emphasizes placing bets on many potential opportunities--most opportunities possibly fail, but the ones that do succeed, they succeed big. The bets, or the experimentation, are an essential price to pay for successful Innovation and Long-term growth
4. Wal-Mart - The Green Innovation
Green Innovation is a win-win for the business, the environment and the community. The business creates a better image, saves money and potentially creates new revenues. The environment becomes safer and cleaner. The community benefits with better health and enjoyment from a cleaner environment.
5. Intuit - Creating Innovations in Software Industry
Intuit's Innovation Recipe: Customer Evangelist Culture, Customer-Intuitive Design, Customer-driven Marketing and Product Management, Direct Marketing and Retailing, The Process driving Innovation.
6. Google - Acquisiton of YouTube. $1.65 billion Innovation and counting
YouTube Innovations: First, the vision of Founders to create a Video download service for FREE. Second, the intense focus on providing the best and most comprehensive experience for users interested in uploading, watching and sharing videos. Finally, YouTube created key partnerships with various Music and Broadcast players in the industry.
7. Toyota - Innovation Factory
Toyota's Innovation Principles: 7.1. The Art of Ingenuity. 7.2. The (relentless) Pursuit of Perfection. 7.3. The Rhythm of Fit.
Innovation Traps: 7.1. Swinging For Fences. 7.2. Getting Too Clever 7.3. Solving Problems Frivolously.
8. Apple - iPod - Apple's Best Innovation
iPod, powered by Apple, introduced in 2001 and masterminded by Steve Jobs, combines outstanding design, easy-to-use interface, superb performance, and an experience like no other. Apple assumed the world’s number one innovative company position and held it again in 2006 in large part due to the exponential growth of iPod – aptly called the iPod phenomenon.
9. Microsoft - The Innovator
Is Microsoft launching a new wave of innovation with Windows Vista, Office 2007 and Exchange 2007 and some 30 new products? Or are these merely nice-to-have product enhancements that users were asking for, and were just delayed for the past few years? Who is going to benefit the most from this new wave?
10. General Electric and Proctor & Gamble - Innovations Driving Growth
GE's innovation recipe: 10.1. Focus on key technologies. 10.2. Growth-oriented leadership 10.3. Core Business portfolio.
P&G's innovation recipe: 10.4. Brand mix. 10.4. Global top team. 10.6. New product collaborations.
11. 3M - The Innovation Machine
Five takeaways stimulating Innovation:
11.1. "Give it a try--and quick!"
11.2. "Accept that mistakes will be made."
11.3. "Take small steps."
11.4. "Give people the room they need."
11.5. "Mechanisms - build that ticking clock!"
12. Southwest Airlines - Flying High with Innovations
It is technology innovations such as DING! that bring Southwest that much closer to its customers who leverage the communication and messaging service to buy more tickets, besides new destinations, low fares, new nonstop services, new vacation packages and more
13. Starbucks - Innovations Brewing at Starbucks
Starbucks has become a pervasive coffee brand throughout the world, and the company is cleverly exploiting the Starbucks brand to launch new innovations in complementary and adjacent industries accounting for the solid revenue growth.
I discovered several new Innovation Trends shaping The Top 20 Innovators, and the industry at large:
1. The Innovation Gap
While the Sustainer is Innovating at a different pace and trajectory serving the needs of its profitable and larger customers, and focused on profitable investments, the Disrupter is Innovating at a faster pace and trajectory serving the needs of the broader market, and creating new market share.
2. Can Leadership Create Innovation?
Key Executives believe the following ingredients drive Innovation:
2.1. Marketing 2.2. Size 2.3. Culture 2.4. Technology 2.5. Passion 2.6. Active Participation 2.7. Hard Work 2.8. Internal Development 2.9. Targeted Acquisitions 2.10. Agility
3. Blocking Creativity and Innovation
Key processes that an organization can create to unblock Creativity and drive Innovation:
3.1. Open communication within and between departments, and across all management layers.
3.2. Hiring of people with diverse backgrounds and experience, and avoiding "cloning."
3.3. Encouraging employees to find new ways to do their daily work, and empowering them to make decisions.
3.4. Creating an organization that extends out to customers, suppliers, partners, and environment.
3.5. Stimulating research activities and providing employees some free time to experiment.
3.6. Allowing employees to take measured risks (with small costs), and seizing opportunities.
3.7. Creating processes to evaluate any idea on merit, regardless of where it is coming from.
3.8. Identifying and separating the creative from operational functions in the organization.
3.9. Using group creativity techniques frequently to promote team building and generate new ideas
4. Co-Creation driving Innovation
As Co-Creation demonstrates tangible results, more mainstream businesses will experiment and adopt it - not just technology companies. The best side effect of Co-Creation is it brings you that much closer to your customers and creates a positive business environment.
5. Six Ways to Find Innovation
How can an organization find Innovation? Here are Six Ways to Find Innovation:
5.1. Stand in different places
5.2. Use the lenses of other domains
5.3. Ask powerful questions
5.4. Foster new knowledge
5.5. Create a visual verbal journal
5.6. Change the pace of attention
I introduced The Innovation Index in December 2006 from an epiphany born out of the BusinessWeek article on the world's top innovators. The Innovation Index Report incorporates the following objectives and is released weekly:
1. Report, analyze and project the stock performance of the top 20 Innovators in North America every week, and compare their performance to S&P, NASDAQ and Dow Jones.
2. Compare and contrast best practices, initiatives, new products, successes, strategies, stories, leadership and insights on Creativity and Innovation at the top 20 Innovators.
3. Showcase Disruptors challenging these top Innovators, their disruptive innovation strategy, and their current and potential impact on the Innovators' customer base and market share.
This brings me back to this, the final chapter of The Innovation Index Annual Report: Chapter Three - The Insights.
Why did I not choose Apple and Google as the top two innovators in The Innovation Index Rankings for 2006? Why is Microsoft ahead of them for 2006? Why is Research In Motion also ahead of Apple and Google for 2006? Why are IBM and HP tied for the top rankings? What about Cisco Systems and GE?
The primary reason was Stock Performance in 2006. Apple and Google each gained 18% and 11% in stock performance gains in 2006. Microsoft stock gained 16%. Research In Motion stock gained 94%. IBM stock gained 20%. HP stock gained 45%. Cisco stock was up 60%, and GE stock was up 9%.
The secondary reason was Innovation Activity in 2006. Apple and Google had innovation activity of 69 and 75 total innovations in 2006. Microsoft had innovation activity of 159 total innovations in 2006. Research In Motion had innovation activity of 87 new innovations. IBM led all innovators with 187 innovations in 2006. HP had 106 innovations. Cisco had 72 innovations, and GE had 79 innovations in 2006. One can argue though that press releases touting incremental enhancements and basic collaborations are hardly new innovations. However, it appears though that most innovators are leveraging the media to make every announcement. Perhaps a filter to weed out the run-of-the-mill announcements may be required in 2007.
The final reason was the X Factor. Apple's iPod line of products in 2006 had key expansions from 2005; on the other hand the new iMac came onto its own in 2006 with the new Intel dual core series and support for Windows. The biggest draw for Apple though was the iPod integration partnerships with major airlines and major auto makers. Google's search engine leadership and related innovations were introduced before 2006; Google expanded on Search in 2006. Google Earth became the innovative application for mapping, and the acquisition of YouTube was the clincher. Microsoft introduced the much awaited Vista, Office, Live services, Pay-As-You-Go computing and Mobile. Research In Motion went on a tear with Blackberry Connect and Blackberry business expansion all over the world. New patents introduction were also key. IBM, HP, Intel, Microsoft and GE led all innovators in filing new patents.
A ranking of the top 20 Innovators in North America is inherently controversial. After all, we are talking about the best of the best. And each Innovator in turn is a fierce competitor. I would be sure to read the new edition of BusinessWeek when it announces the annual rankings of the world's top innovators. What I have tried though is to correlate Stock Performance, Innovation Activity and the X Factor. Together, the Top 20 Innovators of The Innovation Index are a barometer of the Innovation Activity in North America.
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.
The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
Tuesday, January 16, 2007
The Innovation Index Annual Report - Chapter Two
The Top Innovator - The Innovator of Innovators
The Innovation Index Annual Report – Chapter One reported the total Innovation Activity in 2006 at the Top 20 Innovators. It also correlated the stock performance of the Top 20 Innovators with their Innovation Activity – Total Innovations introduced across New Products, Collaborations and Acquisitions. I will announce The Top Innovator – The Innovator of Innovators in this Chapter Two of The Innovation Index Annual Report. But before I announce the winner, here is some background (or you can scroll down to see the winner):
Whereas Research In Motion (NASDAQ: RIMM) had the best stock performance at 94%, its net Innovation Activity created 87 new innovations. On the other hand, America Movile (NYSE: AMX) had a 56% stock performance gain with only 10 new innovations. IBM (NYSE: IBM) had a stock performance gain of 20%, and produced the highest Innovation Activity with 187 new innovations. Microsoft Corporation (NASDAQ: MSFT) had net Innovation Activity with 159 new innovations, and its stock jumped 16% for the year.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
The table below compares the stock performance gains for each of the Top 20 Innovator along with their net Innovation Activity – Total Innovations introduced during 2006.
Who is the Top Innovator? Is Cisco Systems (NASDAQ: CSCO) the winner with 60% stock gain, and a respectable 72 new innovations? Or is it Apple Inc. (NASDAQ: AAPL) with 18% stock gain and 69 new innovations? Starbucks Corporation (NASDAQ: SBUX) had a solid year as well notching gains of 18% and creating 29 new innovations. Why not one of the perennial innovators: 3M (NYSE: MMM), Proctor & Gamble (P&G) (NYSE: PG) or General Electric (GE) (NYSE: GE) who performed well, acquired many disruptor rivals and complementary technologies, and innovated on a regular basis? How about Hewlett-Packard (NYSE: HPQ) gaining 45% in stock returns, and creating 106 new innovations. And let’s not forget Google (NASDAQ: GOOG) with 11% stock gain, and 75 new innovations.
In order to determine the final winner(s), I used the following criteria on a rank order basis ranking from 1 (highest) through 20 (lowest):
1. Stock Performance
2. Total Innovations
3. X Factor
Stock Performance and Total Innovations – Innovation Activity rank orders were assembled objectively with the information from the table above. This is solely based on established 2006 stock performance, and net innovation output – data that is objectively available through individual Innovator’s traded stock and press releases of announced products, collaborations and acquisitions.
The X Factor though is a holistic measure. In order to arrive at the rankings for the X Factor, I reviewed the latest Patent reports for the top 20 Innovators. For instance, IBM led all Innovators in the U.S. with 3,651 patents in 2006. HP created 2,113 new patents, Intel with 1,962 patents, Microsoft with 1,463 patents, and GE with 1,051 new patents. Besides patents data, I also reviewed game changing innovations such as HP’s acquisition of Mercury Interactive for $4.5 billion and ability to integrate, or IBM’s microchips powering the Nintendo WII video game systems. GE acquired 20 companies in 2006; an example acquisition was $3 billion for Trustreet Properties worth $3 billion by GE Capital. Google acquired YouTube for $1.65 billion and created a market leading position in on demand media. Cisco’s introduction of Cisco TelePresence, a new technology solution that provides brand new in-person experiences between people, places and events whether they are across town or across the world. Intel (NYSE: INTC) answered AMD in the form of Dual Core processors that brought back Intel in the limelight. Another innovation was P&G’s first car wash, Mr. Clean where children can also participate by shooting water guns loaded with suds at the cars as they pass.
Announcing The Top Innovators – The Innovator of Innovators
Rankings of The Top Innovators:
For 2006, the top award goes to two Innovators which have build innovation factories with a pipeline of innovations. These Innovators are fierce competitors, and market innovations that are aimed at taking customers and market share from each other’s business at regular intervals. These Innovators have created pervasive brands, continually exhibit resiliency in the face of competition and environmental pressures, and create systematic processes and rigor to make new innovations happen.
Hewlett-Packard and IBM are the co-winners of The Top Innovator – The Innovator of Innovators award for 2006.
HP had an outstanding 2006 creating over 100 new innovations, gaining 45% in stock value, obtaining over 2,000 new patents, acquiring 7 companies, and taking over the number one position in PC market – while trying to stay focused in the face of pretext scandal which at one time threatened to bring down the CEO and the entire company. However, HP delivered, is back in cool, and is back in business – in large part due to the focus on core businesses, game changing innovations such as industry’s first blade workstation and first global mobile broadband notebooks, and execution based strategy of CEO Mark Hurd.
IBM had a breakthrough 2006, leading all Innovators with 187 new innovations, obtaining over 3,500 new patents, acquiring 14 companies, gaining 20% in stock value, and becoming the high performance supplier for the video game industry. The Big Blue marketed such innovations as Clipped Tag RFID Technology, hybrid supercomputers, virtualization, cell computer, Secure Blue and more. IBM has successfully integrated services, software, microchips, security and communications businesses and is able to continually innovate in each area.
Cisco Systems, Microsoft and Research In Motion round out the top five list of The Top Innovators.
GE, Apple, Google, Starbucks, 3M and P&G combine for positions 6 through 10 on The Top Innovators list.
The table below shows the ranked listing of The Top 20 Innovators for 2006:
Who will be the Top Innovator in 2007? We are sure to keep an eye on key innovations in 2007.
What did we learn from the Top 20 Innovators in 2006? What are the key insights gained from the top 20 Innovators, top Innovations introduced during 2006, lessons learned, 2007 projections, and observations on Disruptors challenging the top 20 Innovators? Chapter Three of The Innovation Index Annual Report will be released on January 17, 2007.
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.
The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
References:
Reuters Key Developments, Press Releases of Top 20 Innovators
The Innovation Index Annual Report – Chapter One reported the total Innovation Activity in 2006 at the Top 20 Innovators. It also correlated the stock performance of the Top 20 Innovators with their Innovation Activity – Total Innovations introduced across New Products, Collaborations and Acquisitions. I will announce The Top Innovator – The Innovator of Innovators in this Chapter Two of The Innovation Index Annual Report. But before I announce the winner, here is some background (or you can scroll down to see the winner):
Whereas Research In Motion (NASDAQ: RIMM) had the best stock performance at 94%, its net Innovation Activity created 87 new innovations. On the other hand, America Movile (NYSE: AMX) had a 56% stock performance gain with only 10 new innovations. IBM (NYSE: IBM) had a stock performance gain of 20%, and produced the highest Innovation Activity with 187 new innovations. Microsoft Corporation (NASDAQ: MSFT) had net Innovation Activity with 159 new innovations, and its stock jumped 16% for the year.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
The table below compares the stock performance gains for each of the Top 20 Innovator along with their net Innovation Activity – Total Innovations introduced during 2006.
| The Top 20 Innovators | Ticker | Performance | Total Innovations |
| America Movile | AMX | 56% | 10 |
| The Proctor & Gamble Co. | PG | 13% | 21 |
| Wal-Mart Stores, Inc. | WMT | 0% | 25 |
| Target Corp. | TGT | 5% | 27 |
| Starbucks Corporation | SBUX | 18% | 29 |
| Amazon.com, Inc. | AMZN | -16% | 31 |
| Southwest Airlines Co. | LUV | -7% | 40 |
| eBay Inc. | EBAY | -30% | 44 |
| Dell Inc. | DELL | -16% | 53 |
| 3M Company | MMM | 3% | 56 |
| Intel Corporation | INTC | -17% | 64 |
| Apple Inc. | AAPL | 18% | 69 |
| Cisco Systems, Inc. | CSCO | 60% | 72 |
| Google Inc. | GOOG | 11% | 75 |
| Yahoo! Inc. | YHOO | -35% | 77 |
| General Electric Co. | GE | 9% | 79 |
| Research In Motion Limited | RIMM | 94% | 87 |
| Hewlett-Packard Co. | HPQ | 45% | 106 |
| Microsoft Corporation | MSFT | 16% | 159 |
| IBM | IBM | 20% | 187 |
Who is the Top Innovator? Is Cisco Systems (NASDAQ: CSCO) the winner with 60% stock gain, and a respectable 72 new innovations? Or is it Apple Inc. (NASDAQ: AAPL) with 18% stock gain and 69 new innovations? Starbucks Corporation (NASDAQ: SBUX) had a solid year as well notching gains of 18% and creating 29 new innovations. Why not one of the perennial innovators: 3M (NYSE: MMM), Proctor & Gamble (P&G) (NYSE: PG) or General Electric (GE) (NYSE: GE) who performed well, acquired many disruptor rivals and complementary technologies, and innovated on a regular basis? How about Hewlett-Packard (NYSE: HPQ) gaining 45% in stock returns, and creating 106 new innovations. And let’s not forget Google (NASDAQ: GOOG) with 11% stock gain, and 75 new innovations.
In order to determine the final winner(s), I used the following criteria on a rank order basis ranking from 1 (highest) through 20 (lowest):
1. Stock Performance
2. Total Innovations
3. X Factor
Stock Performance and Total Innovations – Innovation Activity rank orders were assembled objectively with the information from the table above. This is solely based on established 2006 stock performance, and net innovation output – data that is objectively available through individual Innovator’s traded stock and press releases of announced products, collaborations and acquisitions.
The X Factor though is a holistic measure. In order to arrive at the rankings for the X Factor, I reviewed the latest Patent reports for the top 20 Innovators. For instance, IBM led all Innovators in the U.S. with 3,651 patents in 2006. HP created 2,113 new patents, Intel with 1,962 patents, Microsoft with 1,463 patents, and GE with 1,051 new patents. Besides patents data, I also reviewed game changing innovations such as HP’s acquisition of Mercury Interactive for $4.5 billion and ability to integrate, or IBM’s microchips powering the Nintendo WII video game systems. GE acquired 20 companies in 2006; an example acquisition was $3 billion for Trustreet Properties worth $3 billion by GE Capital. Google acquired YouTube for $1.65 billion and created a market leading position in on demand media. Cisco’s introduction of Cisco TelePresence, a new technology solution that provides brand new in-person experiences between people, places and events whether they are across town or across the world. Intel (NYSE: INTC) answered AMD in the form of Dual Core processors that brought back Intel in the limelight. Another innovation was P&G’s first car wash, Mr. Clean where children can also participate by shooting water guns loaded with suds at the cars as they pass.
Announcing The Top Innovators – The Innovator of Innovators
Rankings of The Top Innovators:
For 2006, the top award goes to two Innovators which have build innovation factories with a pipeline of innovations. These Innovators are fierce competitors, and market innovations that are aimed at taking customers and market share from each other’s business at regular intervals. These Innovators have created pervasive brands, continually exhibit resiliency in the face of competition and environmental pressures, and create systematic processes and rigor to make new innovations happen.
Hewlett-Packard and IBM are the co-winners of The Top Innovator – The Innovator of Innovators award for 2006.
HP had an outstanding 2006 creating over 100 new innovations, gaining 45% in stock value, obtaining over 2,000 new patents, acquiring 7 companies, and taking over the number one position in PC market – while trying to stay focused in the face of pretext scandal which at one time threatened to bring down the CEO and the entire company. However, HP delivered, is back in cool, and is back in business – in large part due to the focus on core businesses, game changing innovations such as industry’s first blade workstation and first global mobile broadband notebooks, and execution based strategy of CEO Mark Hurd.
IBM had a breakthrough 2006, leading all Innovators with 187 new innovations, obtaining over 3,500 new patents, acquiring 14 companies, gaining 20% in stock value, and becoming the high performance supplier for the video game industry. The Big Blue marketed such innovations as Clipped Tag RFID Technology, hybrid supercomputers, virtualization, cell computer, Secure Blue and more. IBM has successfully integrated services, software, microchips, security and communications businesses and is able to continually innovate in each area.
Cisco Systems, Microsoft and Research In Motion round out the top five list of The Top Innovators.
GE, Apple, Google, Starbucks, 3M and P&G combine for positions 6 through 10 on The Top Innovators list.
The table below shows the ranked listing of The Top 20 Innovators for 2006:
Who will be the Top Innovator in 2007? We are sure to keep an eye on key innovations in 2007.
What did we learn from the Top 20 Innovators in 2006? What are the key insights gained from the top 20 Innovators, top Innovations introduced during 2006, lessons learned, 2007 projections, and observations on Disruptors challenging the top 20 Innovators? Chapter Three of The Innovation Index Annual Report will be released on January 17, 2007.
About The Innovation Index
The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.
The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.
The Normalized Innovation Index has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.
The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:
3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)
The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
References:
Reuters Key Developments, Press Releases of Top 20 Innovators
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