Forbes – The World’s Most Innovative Companies 2014
– 13 points –
– 9 points –
– 11 points –
– 9 points –
– 42 (out of 60) –
- Global, e.g. North America, Europe and Asia (5 points)
- Regional, e.g. Europe or North America (3 points)
- Large national market: e.g. US, China, Japan, Germany, France, UK, Italy, Brazil (2 points)
- Mid-sized or small market, e.g. Switzerland, Netherlands, Argentina, Singapore (1 point)
Ranking will be recognized by key stakeholders:
- Opinion Leaders (Politicians, Professors; NGO’s) (2 points)
- Business Advisory Board, C-Level Executives (CEO, CCO, CFO, CMO) (2 points)
- High Potentials & Top Talents (employer market, students) (2 points)
- Financial Market (2 points)
- General Public (2 points)
Aggregated points: 13 (of max. 15)
- Ranking owner has limited credibility and reputation. (1 point)
- Ranking owner has fair credibility and reputation. (3 points)
- Ranking owner has excellent credibility and reputation. (5 points)
What is the ranking owner’s intention to produce and disseminate the ranking?
- Ranking is predominantly a tool to raise awareness for the owner with the possible intention to sell consultancy services. (1 point)
- Ranking is partly a tool to raise awareness for the owner with the possible intention to sell consultancy services. (3 points)
- Ranking is predominantly a tool to surface and share important insights on the subject surveyed. (5 points)
Is/Are the media outlet(s) where the ranking is published of high credibility and reputation?
- Media outlet(s) has/have limited credibility and reputation. (1 point)
- Media outlet(s) has/have fair credibility and reputation. (3 points)
- Media outlet(s) has/have excellent credibility and reputation. (5 points)
Aggregated points: 11 (of max. 15)
- limited orientation only (1 point)
- fair orientation provided (3 points)
- very good orientation (5 points)
Is the Ranking published in the same format on a regular basis, e.g. annually, which allows to track developments and comparisons over time?
- ranking is published for the first time (1 point)
- ranking is published for the second time in the same format (3 points)
- ranking is published for more than 3 times on a regular basis in the same format (5 points)
Do the ranking results provide added value and further insights on how companies are evaluated in in their industry, e.g. detailed ratings in various sub-dimensions of the overall result?
- limited added value only (1 point)
- fair amount of added value (3 points)
- high amount of added value (5 points)
Aggregated points: 9 (of max. 15)
- Ranking is based on a jury’s opinion only. (1 point)
- Ranking is based on a small survey or only on a limited group of stakeholders. (3 points)
- Ranking is based on a robust and representative survey. (5 points)
Coment: Ranking is based on a survey among investors, but the number of respondents is not revealed.
Is the ranking methodology easy to understand and reasonable – even for non-statisticians?
- Methodology not easy to understand and not reasonable. (1 point)
- Methodology fairly good to understand and reasonable. (3 points)
- Methodology very easy to understand and reasonable. (5 points)
Is the ranking methodology easy to access and transparent?
- Methodology not easy to find and not sufficiently transparent. (1 point)
- Methodology fairly good to find and of medium transparency. (3 points)
- Methodology very easy to find and of high transparency. (5 points)
Aggregated points: 9 (of max. 15)
- Product / Service Brands
- Company Brands
- Corporate Reputation and Company Esteem
- Social Responsibility, CSR & Sustainability, Ethical Business Practices
- Innovation & Technology
- Employer Attractiveness & Diversity
- Nations & Destinations
- University & Other Institutions
- Social Media
- Personal Branding & CEOs
- Name of Ranking: Forbes - The World's Most Innovative Companies 2014
- Ranking managed/produced by institute/organization: The Innovators DNA
- Ranking published by media outlet: Forbes
- Date of recent publication: August 20, 2014
- Date of previous publication: August 14, 2013
According to Forbes, the method relies on investors’ ability to identify firms they expect to be innovative now and in the future. Companies are ranked by their “Innovation Premium”: the difference between their market capitalization and a net present value of cash flows from existing businesses (based on a proprietary formula from Credit Suisse HOLT). The difference between them is the bonus given by equity investors on the educated hunch that the company will continue to come up with profitable new growth. To be included, firms need seven years of public financial data and $10 billion in market cap. Only industries that are known to invest in innovation are included, excluding those that have no measurable investment in R&D, so banks don’t make it to the list. Nor do energy and mining firms, whose market value is tied more to commodity prices than it is to innovation.
Looking at this year’s Top 100, it is worth mentioning that Salesforce defended their No. 1 positioning from last year. But even more interesting is the fact that five pharma companies – albeit mid-sized organizations, and none of the “Big Pharma” giants – have made it into the top 11. Also remarkable: Thirteen out of the top 20 companies are based in the US, whereas no Swiss or German company made it into the top 50!
Biggest caveats of this ranking: The total number of respondents remains intransparent. Also, Forbes admits “that our picks do not correlate with subsequent investor returns. To the extent that today’s share price embeds high-growth expectations, one might even anticipate returns to investors to be low, as these expectations may be difficult to meet.”
Apart from the flaws mentioned above, the “World’s Most Innovative Companies” is a valuable benchmark to see where R&D-oriented companies (bigger than $10 billion in market cap) stand, as compared to peers and across industries. To see the full article, please click here.