You will see this message only once - This website stores cookies on your computer or mobile device. Before joining Aon Consulting, Genevieve worked for Mercer for seven years as an International Practice Consultant in San Francisco and more recently in Singapore. Prior to Mercer, Genevieve worked as a senior actuarial analyst with Employers Reassurance Corporation.
Genevieve received her Bachelor's degree in Economics from the National University of Singapore. Aon Consulting understands the need to keep abreast of critical human capital issues across Asia Pacific.
Could your business stand to learn a thing or two from legal content marketing for client acquisition?
Your takeaway: You don't have to "dumb down" content, but remember a blog is not a college term paper, either. Your takeaway: Conduct market intelligence research to understand what topics are most important for your customers.
Even without a major Supreme Court ruling or regulation announcement to cover, you can still find current events to "newsjack" in your content. Your takeaway: Go a step further by setting up Google Alerts to monitor breaking stories related to your industry. Major law firms have some serious cash to invest in advertising; that's why it's even more noteworthy that they're choosing to invest this money in content marketing rather than print or TV ads. The Bay Area is famous for its long history of leadership in computing, semiconductors, software, biotechnology, the Internet and other innovation-based industries. This report was originally published before March 31, 2014, when Booz & Company became Strategy&, part of the PwC network of firms. The authors would like to acknowledge the involvement of all of the Bay Area companies that participated in Booz & Company’s 2011 Global Innovation Survey.
The claim has long been made that companies based in the San Francisco Bay Area owe their leadership in innovation to something different in how they go about the innovation process.
When asked if their corporate cultures supported their strategies, 46 percent of Bay Area companies strongly agreed— compared with just 19 percent of all companies—more than double the general population. This report is the product of a dual effort between Booz & Company and the Bay Area Council Economic Institute. Innovation lies at the heart of the Bay Area’s economy, and the region is widely considered to be the world’s leading center for innovative activity, particularly in technology. US Fortune 500 2011 List Revenue # HQ $ Billions New York Bay Area Houston Dallas Atlanta Minneapolis Chicago St.
1 Forbes largest private companies list comprises 223 companies; revenues for a number of Forbes largest private companies are calculated by using Forbes estimate or company provided estimate.
University and industry resources are brought together through two of the four California Institutes for Science and Innovation: QB3 (California Institute for Quantitative Biosciences), which focuses on the convergence of information and biotechnology, and CITRIS (Center for Information Technology Research in the Interest of Society). Another distinctive element of the Bay Area’s success is venture capital, an industry that was created in the Bay Area and continues to thrive here. As a result, the Bay Area is home to the world’s largest assembly of information technology, biotechnology, Internet, digital entertainment, and cleantech firms.
Innovation jobs represent a larger share of jobs in the Bay Area than anywhere else in the country.
This report, as noted, is a collaborative effort between the Bay Area Council Economic Institute and Booz & Company. Overall, corporate spending on innovation rose 9.3 percent in 2010, to a new high of $550 billion. Globally, every region increased innovation spending in 2010, a significant turnaround compared to the previous year, when the three regions making up the lion’s share — North America, Europe and Japan — all cut back. For the first time, the 2011 Global Innovation 1000 study provided a deeper look into the impact of the intangible factor of corporate culture on the ability of companies to innovate successfully.
Companies achieving high alignment on both innovation strategy and culture, enjoy superior financial performance. 2 Concordance measures the statistical correlation of reliability and validity between variables; this analysis was used in this study to control for outlier variation in survey responses for cultural support and strategic alignment.
The 44 percent of companies who reported that their innovation strategies are clearly aligned with their business goals—and that their cultures strongly support those innovation goals—delivered 33 percent higher enterprise value growth and 17 percent higher profit growth on five-year measures than those lacking such tight alignment.
The analysis of the survey conducted as part of the Global Innovation 1000 study utilizes three core profiles that characterize a company’s approach to incremental versus breakthrough innovation and the role that end customers play in defining future product needs: • Need Seekers adopt a first-mover strategy.
The study found that one profile, Need Seekers, stood out for facilitating the strongest alignment of innovation and business strategies with corporate culture and achieving superior financial performance over time.
Survey respondents from Need Seeker companies are three times more likely to say that their company’s innovation strategy supports its business strategy. The survey respondents from Need Seeker companies were three times more likely than respondents in the average company to report strong alignment of their company’s innovation strategy with its overall corporate strategy. Survey respondents from Need Seeker companies are twice as likely to say their corporate cultures support their company’s innovation strategy. Over 40 percent of survey respondents from Need Seeker companies say that their company’s culture strongly supports its innovation strategy, as compared to 14 percent at Technology Driver companies that stress technology achievement and both incremental and breakthrough change, and just under 7 percent at Market Reader companies that adopt a second-mover strategy and emphasize incremental change. The critical differences in corporate culture and business strategy alignment with innovation strategy help explain why Need Seekers, on average, consistently outperform the other two profiles in terms of long-term profitability and enterprise value. Companies following the Need Seeker model succeed because of the particular innovation goals and cultural attributes they depend on in their pursuit of innovation. The Bay Area offers many advantages as a place to start and conduct business: a strong educational and research infrastructure, a long tradition of venture capital funding, and an overarching culture that prizes technological talent, innovation, and networking. Bay Area companies reported both stronger alignment on business and innovation strategies and cultural support for innovation strategy. The survey of Bay Area companies conducted in tandem with Booz & Company’s global innovation survey showed that Bay Area companies report far greater alignment between their innovation strategy and business strategy and much stronger cultural support for that innovation strategy than the average company. But it is not just strategic alignment and cultural support that make Bay Area companies stand out.
Nearly half of Bay Area companies are Need Seekers, compared with less than a third of all companies surveyed in the 2011 Global Innovation 1000 study. Of the Bay Area companies surveyed, nearly half are Need Seekers, compared with just 28 percent of all companies. Bay Area companies have a much higher proportion of their technical leads reporting to the CEO than average companies. An unusually high proportion of companies in the Bay Area ensure that their top technical executives report to the CEO—75 percent compared with 63 percent at the average company. Bay Area companies have the highest proportion of their innovation agendas developed and communicated top-down. Overall Survey Companies N = 595 From the senior levels of the organization From within the technical organization(s) (e.g. As a corollary, a higher proportion of Bay Area companies also developed their innovation strategies at the top levels of the companies and communicated those strategies from the top down. A large majority of Bay Area companies gave their new-product portfolio management processes high ratings for consistency and rigor. More than half of executives from Bay Area companies said their new-product portfolio management processes were both consistent and rigorous—well above the number of executives at the average company. Darlene Solomon, CTO at Agilent Technologies Inc., points out how a change at the top can affect that culture for the better.
Most Bay Area companies view continuous refreshment of their product development talent base as a critical advantage. Finally, like Need Seekers, Bay Area companies place a high premium on ensuring the constant refreshment of their product development talent—46 percent compared with just 26 percent of average companies. The relationship between the overall environment of the Bay Area and the companies that have been launched and thrive in the region is highly symbiotic. The interrelated combination of factors that have driven the success of the Bay Area business environment— research, talent, investment, and openness to new ideas—are notoriously hard to replicate. The Bay Area Council Economic Institute is a partnership of business with labor, government, higher education and philanthropy, that works to support the economic vitality and competitiveness of the Bay Area and California. Booz & Company is a leading global management consulting firm, helping the world’s top businesses, governments, and organizations. We use cookies in order to enrich your experience, remember your preferences, and help us understand how the website is being used. Her areas of expertise includes assisting global firms in addressing international human resources issues and designing overall international employee benefits programs, merger & acquisitions with a focus on pension and employee benefits, multinational pooling and financial reporting of non-US pension plans. Her responsibilities included research and development of life and health insurance, pricing of life and health products, analyzing of the profitability of group accounts, adapting training programs for clients. Covington has 12 different blogs dedicated to everything from government contracts to tech media and privacy, reflecting the firm's different practices. Fairly or not, lawyers as a group have a reputation for speaking in a lot of indecipherable "legalese".
A law firm blog is the last place you'd expect to find inaccurate information; after all, publishing misleading or incorrect legal information could lead to a possible lawsuit! The popular legal site "Above the Law" even named LaCroix's blogs one of the "12 best legal blogs for 2014". Create content that addresses these concerns with action-oriented solutions, be that a best practice checklist or even a short how-to video, rather than pushing your own products and services. Small businesses can piggy-back off major holidays or events like the Super Bowl or Valentine's Day, lead with a nod to the weather (like the recent winter storm 'Jonas'), or even tie in with a major celebrity event, like the Oscars.
You don't have to shape an entire blog post or article around breaking news, but you can use these topics as "hooks" to publicize your content. He has spent more than 20 years working with high-tech and industrial clients on corporate and product strategy, product development efficiency and effectiveness, and the transformation of core innovation processes.
This report represents a first empirical assessment of the “culture of innovation” that characterizes these innovation leaders. It may come as something of a surprise that companies in the Bay Area are no more likely to follow the Technology Drivers innovation model than are companies in general.
As it has done for the past six years, Booz & Company conducted its annual Global Innovation 1000 study, concentrating in 2011 on the effect of culture on corporate innovation performance.
The region’s ability to retain this distinction is a result not just of the many technological advances it has achieved, but also of the ongoing creation of new business paradigms that produce new companies and redefine entire industries.
Louis Charlotte Cincinnati 45 1,234 30 22 10 10 920 500 206 246 156 141 108 188 204 10 Global Fortune 500 2011 List Revenue # HQ $ Billions 18 955 774 378 125 Inc. Much of it can be attributed to three critical factors: infrastructure (both hard and soft), finance, and culture. Other specialized research centers, such as JBEI (Joint Bio-Energy Institute), a collaboration of universities and national laboratories, have been created in recent years to focus on specific challenges, such as the conversion of plants to energy. The amount of venture capital money invested from year to year may vary, but between 35 and 40 percent of all venture funding in the U.S. The proximity of these companies to each other, and the fluidity with which people and ideas move between them, creates further opportunities for growth and development in every sector.


It was developed based on Booz & Company’s 2011 Global Innovation 1000 study, subtitled Why Culture Is Key, which focused on how culture informs and affects the innovation process.
The increase, which followed the only decline in the seven years the Global Innovation 1000 study has been tracking R&D spending, is attributable largely to a major rebound in corporate revenues.
The health sector, whose R&D expenditures are chiefly by pharmaceutical firms, captured four of the top five spots in spending among the Global Innovation 1000 and accounted for eight out of the top 20 firms in total R&D spending. As part of its web-based survey of nearly 600 innovation executives from more than 400 leading companies in every major industry sector, Booz & Company asked innovation leaders to name the companies they considered to be the most innovative in the world. The key finding is that culture is key to innovation success, and its impact on performance is measurable. They actively and directly engage both current and potential customers to help shape new products and services based on superior end-user understanding. Culture is key, as Agilent CTO Darlene Solomon notes: “There’s a very strong innovation culture throughout the company, and a culture of teamwork, and Agilent really encourages that. These goals include superior product performance and quality, giving them a distinct advantage in the marketplace; their common cultural attributes involve strong identification with their customers and a true passion for and pride in the products and services they offer. That, in turn, has led to the creation of many highly successful businesses, first in the high-technology and IT sectors, and more recently in biotechnology, Internet, digital entertainment and clean technologies. As discussed in Chapter 4, the analysis shows that such companies significantly outperform their peers in terms of both profitability and enterprise value.
As a rule, these companies follow a Need Seeker approach, which, as noted, has a greater likelihood of success in innovation than either of the other two approaches (Market Readers or Technology Drivers). Given the Bay Area’s longstanding tradition of technological expertise and innovation, it would be logical to assume that most of the companies in the region would follow a Technology Driver approach. This is key to having a coherent innovation strategy that is designed to be in alignment with overall business strategy and is put into practice throughout the company. This suggests that their top-down efforts to execute their chosen innovation strategy are succeeding, and that their cultures are supporting every aspect of those efforts. Certainly, their being in the Bay Area helps, given the huge pool of talent they have to pick from.
Large numbers of entrepreneurs are attracted to the region for its intellectual and financial resources. Yet there is much to learn from the strategies, cultures, and practices of the companies located in the Bay Area— both for executives at other firms looking to boost their own innovation efforts and for leaders in other regions hoping to jumpstart new paths to economic development and faster growth. Founder Edwin Booz defined the profession when he established the first management consulting firm in 1914. Genevieve had also worked with major non-profit organizations and a major hospital group in Singapore on talent and executive rewards programs. Please complete your contact information on the web form, and once a month, you will receive an email with an overview of our latest featured content.
Lawyers aren't the only ones who can fall back into industry speak and alienate their audience. And while legal blogs are not meant to be a substitution for legal consultation, they are a trusted resource for gathering information. For an attorney blogging on his own rather than writing for a major law firm's blog, that recognition is a pretty big deal.
They often get built-in news hooks like a major court ruling or new regulation announcement to comment on in their posts. Be sure you're getting the biggest bang for your buck by adopting these smart content marketing strategies and keeping tabs on your expected return via a marketing ROI calculator.
Stephen Hoover, CEO, PARC, A Xerox Company Kevin Connolly, Vice President, Engineering and Global Supply Chain, Pitney Bowes Inc. The goal is to contrast these companies with their global peers in order to better understand where the source of their innovative prowess lies.
But that only strengthens the argument: while Bay Area companies, like many top innovators, have found success in creating pathbreaking new technologies, they are also almost twice as likely as companies in general to have developed the capabilities needed to provide a superior understanding of the stated and unstated needs of their end customers. In parallel, the Bay Area Council Economic Institute conducted a similar study, concentrating on a smaller set of companies in the Bay Area.
The first two can be acquired, while the third—the subject of this report—is more difficult to replicate.
The depth and diversity of all of the many research efforts in the region provide a core of basic science and technology, as well as a large pool of faculty, students, and scientific entrepreneurs who staff and build companies based on these technologies. This leads to the region’s critical human element—the highly educated, motivated workforce that sustains its fast pace of technology development and commercialization.
The top 20 global spenders averaged 10 percent R&D growth, representing $142 billion in R&D on sales of $1.6 trillion.
These companies often address unarticulated needs and then work to be first to market with the resulting new products and services. This combination of elements gives them the ability to get to market first with products that address unarticulated customer needs through superior customer understanding. Yet these advantages alone cannot fully explain the region’s remarkable ability to create and sustain such innovative companies.
The most recent incarnation of PARC, Xerox’s storied Silicon Valley research facility, is an example. But when William Sullivan took over as CEO in 2005, he made it very clear that we couldn’t just be technology-focused. As they start and build their companies, enormous positive network effects come into play, providing them with a constantly refreshed pool of ideas and talent.
Certainly, every company needs a clear, specific strategy— one informed by and aligned with customer needs— for how it intends to generate new product ideas, develop them, and bring them to market. The Economic Institute also supports and manages the Bay Area Science and Innovation Consortium (BASIC), a partnership of Northern California’s leading scientific research universities and federal and private research laboratories. Today, with more than 3,500 people in 61 offices around the world, Booz & Company brings foresight and knowledge, deep functional expertise, and a practical approach to building capabilities and delivering real impact. They're bringing a well-thought out strategy to the game and hiring in-house talent or outsourcing their needs to ensure quality content that's timely, compelling and relevant. For example, California-based Criminal Defense Attorney Grant Bettencourt blogs regularly about topics ranging from DUI records to immigration cases. I know firsthand how marketers can throw around a lot of lingo about "leveraging core competencies" or "brand scalability" that sounds like alphabet soup to outsiders. That's because legal blogs are all about thought leadership, not advertising- and your company's content marketing plan must follow this same path. It's a distinction LaCroix earned thanks to his willingness to focus on thought leadership rather than advertising services. Consider Covington's "Inside Privacy" blog, edited by a DC-based team of Covington and Burling LLP attorneys.
In conjunction with its 2011 Global Innovation 1000 study, Strategy& worked with the Bay Area Council Economic Institute, the strategic research arm of the Bay Area Council, a consortium of more than 275 companies in the San Francisco Bay Area, to identify the strategic, cultural, and organizational attributes that have led to the sustained success of this region. He works with leading technology, media and consumer companies, focusing on strategy, corporate development, marketing and sales, organization, operations, and innovation. Mark Bregman, Executive Vice President and Chief Technology Officer, Symantec Corporation (currently Senior Vice President and CTO, Neustar, Inc.) Tim Yerdon, Global Director, Innovation and Design, Visteon Corporation Finally we would like to acknowledge the hard work of the individuals who either worked on this report specifically, or who worked on the parent 2011 Global Innovation Survey, which served as the basis for this study, including Edward H. For almost a decade, in its annual Global Innovation 1000 study, Booz & Company has ranked the top 1,000 public companies by their research and development spending and analyzed how that spending influences their overall financial performance. In conjunction with its 2011 Global Innovation 1000 study, Booz & Company worked with the Bay Area Council Economic Institute, the strategic research arm of the Bay Area Council, a consortium of more than 275 companies in the San Francisco Bay Area, to identify the strategic, cultural, and organizational attributes that have led to the sustained success of this region. It isn’t just about how many transistors you can fit on a chip, but also about how such advances can lead to products and services that gain unprecedented traction in the marketplace through superior insight into customers, as well as the development of practical value propositions that will win those customers’ business. Both studies included interviews of a number of innovation executives, both in and out of the Bay Area, in order to add color and depth to the empirical findings. The Bay Area hosts what is possibly the world’s greatest assembly of scientific research capacity. The Bay Area is closely identified with entrepreneurship and a strong culture of risk-taking. China and India— and to a lesser extent countries outside of North America, Europe, Japan, and Asia — continued to boom, albeit from a small base. In 2011, Facebook was named one of the world’s most innovative companies for the first time, entering the list at number 10. It is critical to understand, however, that not all companies should therefore aim to follow the Need Seeker model. The goal of this report is to understand specifically what makes these companies different, through an empirical study of the strategies and cultures that have long allowed them to innovate so consistently and successfully. PARC is now a separate division of Xerox, with a mission to innovate not just for the benefit of the parent company, but also for other companies and the government— less then half of its revenues now come from work it does for Xerox.
Technology Drivers can, of course, be highly successful (Google is the obvious example) but they take a very different approach—one that depends more on technological inspiration. We needed to be balanced in terms of focusing on the customer and on understanding the market. Just 17 percent of Technology Drivers say they constantly refresh their product development talent, clearly indicating that they prefer the continuity that comes with maintaining a longstanding technical staff.
And the innovative culture needed to grow into international powerhouses appears to be in the very air they breathe. And its culture should support its chosen innovation strategy at every stage of its efforts to execute it. Through its economic and policy research and its many partnerships, the Economic Institute addresses key issues impacting the competitiveness, economic development and quality of life of the region and the state, including infrastructure, globalization, science and innovation, energy, and governance.
Philadelphia-based injury lawyer Joel J. Kofsky blogs about hot topics like smartphones and distracted driving and drone privacy concerns. Covington's blog offers vital insights into the latest data privacy developments and cyber security. This effort included segmenting the survey results received from Bay Area companies in order to better understand what cultural and organizational elements make them different, and conducting supplementary interviews with Bay Area executives to deepen that understanding. He is a Board Trustee of the Bay Area Council Economic Institute and a Director of the Bay Area Council. The results are clear: success at innovation is not just a blend of hard elements such as the number of researchers, the amount that they receive in funding, or the number of patents they receive. As always, the Booz & Company study began by identifying the 1,000 public companies around the world, for which public data on R&D spending was available, that spent the most on research and development in 2010. Five national laboratories call the region home: Lawrence Livermore, Lawrence Berkeley, Sandia, NASA Ames and the Stanford Linear Accelerator. In mid-2010, 70 percent of all venture investment in clean technologies, and 50 percent of global investment in the sector, were targeted for California, primarily the Bay Area. Toyota Motor, the top R&D spender for several years prior to the recession, increased spending by less than 1 percent, falling from fourth place in the rankings to sixth. Accounting for 2 percent of global R&D outlays in 2010, Chinese and Indian companies upped R&D investment by more than 38 percent, almost identical to the previous year’s growth pace. The top 10 most innovative firms outperformed the top 10 R&D spenders across three key financial metrics over a five-year period— revenue growth, EBITDA (earnings before interest, taxes, depreciation and amortization) as a percentage of revenue, and market cap growth.


They closely monitor both their customers and competitors, but they maintain a more cautious approach.
Booz & Company’s ongoing Global Innovation 1000 study provides a useful empirical baseline for investigating why some companies consistently outperform their peers in the creation of new products and services. PARC Chief Executive Stephen Hoover says , “Our business is innovation, and the two are highly integrated.” To that end, Hoover works hard to link strategy and culture together so that each supports the other. Need Seekers excel not just at technology but also at gaining insights into the needs and desires, both articulated and unarticulated, of their present and future customers. That helps drive our research agenda.” Using this approach, many Bay Area companies are succeeding in two critical areas, customer insight and product development.
The strategy needs to be clearly articulated, and communicated throughout the organization, from the top all the way to the product development teams, the salespeople, and the marketers. A public-private Board of Trustees oversees the development of its products and initiatives.
The independent White Space report ranked Booz & Company #1 among consulting firms for “the best thought leadership” in 2011. The blog breaks down the latest cyber security developments - like the Senate Committee passing the Judicial Redress Act or SEC cybersecurity reporting requirements - in a manner that's easy to comprehend whether or not you're a Beltway insider. Indeed, the study has consistently shown that the absolute amount spent does not correlate with financial performance at all. The survey conducted as part of the Global Innovation 1000 study classifies companies according to three strategic profiles: Need Seekers, Market Readers, and Technology Drivers. Then it analyzed key financial metrics for each of those companies from 2001 through 2010, including sales, gross profit, operating profit, net profit, R&D expenditures, and market capitalization.
The region is also home to five of the nation’s leading research universities: UC Berkeley, UC San Francisco, UC Davis, UC Santa Cruz and Stanford. Venture funding, as well as the funding of very young companies by angel investors, has fueled much of the technology commercialization in the region and many of its most successful companies. Serial entrepreneurs, many from overseas, are common, and they regularly fund and mentor new generations of young companies.
Pfizer (2nd), Novartis (3rd), Microsoft (4th) and Merck (5th) rounded out the top five spenders. They focus largely on creating value through incremental innovations to their products and being “fast followers” in the marketplace. In short, the best innovators are those that can combine the right strategies with the right set of capabilities and the right cultural support to provide their customers with the strongly advantaged, differentiated products and services they want. Prith Banerjee, HP’s executive vice president and director of HP Labs, sees this link between his organization’s research efforts and the company’s customers as critical. The technical community needs to be fully aligned with top management, and technical leaders should report directly to the highest levels of the company. His experience includes senior positions in business and in state and federal government, focusing on trade, energy, innovation and economic development. Instead, the current study indicates that the most innovative companies appear to have a “secret sauce” that makes them different from their peers—a distinct culture of innovation that ensures that their chosen innovation strategy is clearly aligned with their overall corporate strategy. All foreign currency sales and R&D expenditure figures through 2010 were translated into U.S. These institutions are joined by an array of independent research laboratories, such as SRI, PARC, and the Buck Center on Aging. This spirit of acceptable risk, willingness to invest where technology and future markets intersect, and ongoing creation of new business paradigms, lies at the heart of the Bay Area’s innovation culture.
Ford was the only company exiting the top 20, and 18th-ranked AstraZeneca was the sole newcomer.
Just three of the top 10 spenders also ranked among the top 10 innovators: Microsoft, Samsung and Toyota Motor. Technology Drivers follow the direction suggested by their technological capabilities, leveraging their sustained investments in R&D to drive both breakthrough innovation and incremental change.
If you properly align your innovation strategy and culture to your business model, build the right capabilities, and execute well, you can prevail no matter which approach you follow.” Still, it’s hard to argue with success. Companies following a Need Seeker model depend on three key cultural attributes—a passion for the product, strong identification with the customer, and an openness to ideas from all manner of sources.
The more tightly a company’s innovation strategy, business strategy, and culture are interwoven, the more its innovation efforts will likely translate into superior marketplace results and long-term financial performance. This secret sauce is the glue that guarantees a high degree of coherence between what they aspire to achieve and how they go about it. Companies following the model we call “Need Seekers” tend to concentrate on gathering the deepest insights possible into both the articulated and unarticulated needs and desires of their customers.
Many private sector companies maintain their own world-class research facilities, including Agilent, Apple, Genentech, Google, HP, IBM, Intel, Lockheed Martin, and many others.
Fully 68 percent of all companies Booz & Company tracked increased their R&D spending in 2010.
As part of the Global Innovation 1000 study, survey respondents were asked to name their picks for top three most innovative companies.
Indeed, these attributes might, by extension, be said to characterize the overriding culture of the entire Bay Area. The larger economic lesson to be learned from the success of the Bay Area experience is that the ability to innovate is a competitive advantage not just for companies but for entire nations. In addition, data on total shareholder return was gathered and adjusted for each company’s corresponding local market.
They often seek to solve the unarticulated needs of their customers through leading-edge new technology. Companies in the Bay Area aren’t distinguished solely by their superior strategic alignment or highly innovative cultures.
Nurturing and developing innovative companies is a product not just of proximity to excellent universities and government research facilities, modern physical infrastructure, or access to capital, as important as they may be. The Bay Area Council Economic Institute and the Bay Area Science and Innovation Consortium (BASIC), the Economic Institute’s science and technology affiliate, have also been keenly aware of the importance of this issue, given their belief that the source of the Bay Area’s innovation success cannot be found in easily quantifiable performance measures alone. Finally, “Technology Drivers” depend to the greatest extent on their own technical expertise to develop attractive products and services. Each company was coded into one of nine industry sectors (or “other”), and into one of five regional designations as determined by each company’s reported headquarters location.
Of those, 60 percent were Need Seekers, including #1 ranked Apple, the prototypical Need Seeker. They also stand out in their proficiency along several organizational and operational dimensions. Just as we have seen in private companies, it stems from a culture that values openness to new ideas, and a networked environment in which ideas and people can flow back and forth, interacting fluidly.
So Booz & Company and the Economic Institute decided to supplement the Global Innovation 1000 study, with a series of questions designed to empirically test what companies mean when they talk about their culture of innovation, and with additional surveys and interviews targeted specifically at Bay Area companies. Thus, Need Seekers tend to want to be first to market, Market Readers tend to be fast followers, and Technology Drivers tend to bring their technology-driven products to market with somewhat less regard for timing. To enable meaningful comparisons both within and across industries, the R&D spending levels and financial performance metrics for each company were indexed against the industry group’s median values.
By contrast, just two of the top ten spenders on innovation follow a Need Seeker approach—demonstrating once again that innovation prowess isn’t a matter of how much money a company spends, but of how it spends it. And it stems from finding and developing people who themselves understand the value of low barriers to the open exchange of technology and people between universities, government, and business, a premium on entrepreneurship, openness to talent from any source, and rewards commensurate with people’s willingness to assume risk.
Bay Area Innovation Network Roundtable: Identifying Emerging Patterns of the Next Wave of Innovation. Hewlett-Packard Company Intel Corporation JDS Uniphase Corporation KLA-Tencor Corporation MacroGenics, Inc.
In this way we were able to empirically assess the companies in the most innovative region on earth to see if there was indeed something unique in the culture of the companies here.
While companies following any of the three approaches can outperform their peers, the study found that Need Seekers tend to be better aligned both culturally and strategically than the other two models (See Chapter 5.) By this critical measure, companies in the Bay Area do indeed stand out. Separately, an online survey of nearly 600 innovation leaders in companies around the world was conducted in order to explore the role of corporate culture as it relates to innovation and financial performance. While any one element in isolation can produce positive results in terms of growth and economic development, it is their combination and interaction that is critical to truly competitive innovation and a self-sustaining cycle of economic success. Our research found that they are almost twice as likely to follow a Need Seeker innovation model, compared to the general population of companies in the Booz global survey— 46 percent versus 28 percent—while the proportion of Technology Drivers is almost exactly the same as the overall population.
However, for the first time since the inception of the Global Innovation 1000 study, no high-technology company was ranked among the top three R&D spenders. And they are almost three times as likely to say their innovation strategies are tightly aligned with their overall corporate business strategies— 54 percent, compared with just 14 percent among all companies. Together, these results were analyzed to reveal the links between innovation strategy and culture. Health was second among industry sectors in its share of total R&D expenditures, at 22 percent. This year, as part of the Global Innovation 1000 study, the Economic Institute encouraged Bay Area Council member companies both to participate in the Booz global survey and to make themselves available for focused interviews to help interpret the results.
In addition, we would like to thank the following executives, including board members of the Bay Area Council Economic Institute’s science and technology affiliate, the Bay Area Science and Innovation Consortium (BASIC), who made themselves available for additional in-depth interviews through which we validated the empirical survey findings. Fred Palensky, Executive Vice President – Research and Development and Chief Technology Officer, 3M Darlene J. A report on the conditions and qualities that allow innovation to thrive and the role innovation can play in a nation’s economic and social development.
Soma Somasundaram, President – Fluid Solutions Platform, Dover Corporation Todd Kaufman, Director, State and Local Government Affairs, Genentech, Inc. The 2011 study showed how highly innovative companies outperform by focusing on critical capabilities and aligning them with their overall business strategy.
This study identified the three distinct innovation strategies: Need Seeker, Market Reader, and Technology Driver. How companies can improve their innovation performance by getting their formal and informal organizations in sync. This study describes how to expand a company’s innovation capacity through leveraging external sources of innovation. Why the most successful firms have a coherence premium—a tight match between their strategic direction and the capabilities that make them unique. Why Apple’s leadership structure, with decisions reflecting the sensibility of Steve Jobs, is more conducive to innovation than the conventional approach of companies like Google.



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