The Drucker Institute, named after legendary management scholar Peter Drucker, has released its 2021 rankings for The Best-Managed Companies of 2021, published in today’s Wall Street Journal. Take a look at the Innovation Top Ten:
- Capital One
- Johnson & Johnson
How did they calculate a single number for “innovation”? They used four criteria and, honestly, only the fourth one sounds like creativity to me:
- They create systems for continuous improvement
- They exploit their successes
- They stop doing things that no longer provide value
- They create a “different tomorrow” that makes today’s products obsolete.
To measure these four criteria, The Drucker Institute used 11 indicators, including these:
- Number of patent and trademark applications
- How the stock market reacted to approved patent applications (in other words, did it create value for the company, as perceived by investors?)
- Patent abandonment–does a company stop working on a patent once they realize it doesn’t create value for them?
- How well a company “manages innovation across its supply chain” (I’d like to see the details for how they calculate this one)
- R&D spending and hiring, specifically in cutting-edge fields like robotics and AI
- Sales or releases of patents
- Market’s valuation of the company’s patents
- How many business magazines rate the company as “innovative”
- How consumers rate a company’s innovation
It’s interesting to see that the most innovative company–Amazon–scored almost twice as high as the tenth, Intel. That puts Amazon way up the stratosphere! (Microsoft was a close second.)
Creativity researchers have known for a long time how hard it is to measure creativity. There’s no readily accepted measure and almost any number you come up with, someone can think of a problem with it. I’ve often been critical of using patents, for example, as a measure of organizational innovation. But whether or not this measure is actually about “creativity” or simply about “good business practices,” it’s fascinating list of the things successful companies do.