The best companies commercialise their innovations fast

Most companies believe they need a continuous stream of big ideas. What sets the really successful companies apart is how quickly they commercialise these ideas.

In our research, we identified what we call Rotation Masters. As industries become disrupted, these companies are pivoting to face their challengers head on – hence the term.

Only one company in 16 gets this label, based on a number of factors including EBITD and sales growth, as well as the proportion of total revenue derived from recent innovations. The Rotation Masters earn 75% to 100% – the bulk if not all of their revenues – from innovations or new businesses introduced in the past three years.

They do this, we found, because they innovate by design. These organisations balance their focus on creating a robust pipeline of ideas and on what is takes to scale and implement these ideas.  Although they acknowledge that today Innovation happens in pockets and may not be pervasive they are deliberate about structuring their organisations to innovate by design.  They concentrate innovation under a strong leadership team with dedicated investment and a discrete structure thus creating a change agent within the organisation. This concentrated innovation allows them to spot innovations, and prototype and test them early.

The US$1.5 billion company Ecolab, which I mentioned in an earlier post, stood out in our research. A global business with offices in Cape Town and Johannesburg, it provides chemicals that clean and cool the water in industrial applications such as power stations and sludge and wastewater treatment plants. It does this by installing hundreds of sensors that detect the cleanliness and temperature of the water – and then its systems dose the water at the right times with the right chemicals in the right quantities to maintain the required standards.

One of Ecolab’s innovations is encouraging healthcare workers in hospitals to wash their hands. By installing sensors in the nearby water outlets that communicate with the healthcare workers’ ID badges, the system can sense if a nurse or doctor has washed their hands after dealing with a patient. If not, an alarm sounds, similar to a seatbelt alarm in a car.

This has more than doubled handwashing compliance to over 90%. These kinds of innovations come from a process of deliberately commercialising new ideas.

Ecolab has 1,600 dedicated R&D staff in 19 global innovation centres. It expects to generate $1.2 billion (about R20 billion) in revenue from innovations that are three years old or less. Considering it is a $1.5 billion business already, that’s a huge number.

Rotation Masters such as Ecolab don’t rely on their own brainpower. They crowdsource innovations more than other companies do, and they have internal teams that acquire innovation capabilities externally more than others.

Ideas are cheap. It’s the discipline and deliberate strategy of commercialising these ideas, with their eyes fixed firmly on the prize of improved revenue, that sets these successful companies apart.

Learn more about how to manage disruption by downloading The Wise Pivot. Or, contact me to discuss how Accenture’s international research can help you understand and prepare for the coming disruption.