Author: aii

In the face of global climate change, social inequality, and pandemic recovery, today’s top companies are breaking the barriers on what it means to innovate.  From redesigning iconic fashion brands to reflect the diversity of consumers, to creating financial products that reflect customers’ social values, and rethinking the car buying process, companies are thinking beyond the shelf lives of their own products and services and focusing on health, well-being, and a sustainable future.

Extraordinary innovation and social innovation earned top U.S. companies high ranks on the American Innovation Index™ (Aii), a research program that quantifies the innovativeness of nearly 200 companies from the customer’s point of view. Winners are selected based on the results of a national survey of over 6,000 U.S. consumers who rated companies they do business with across 20 industries on key metrics, including innovation, customer loyalty, attractiveness, and social innovation.

Aii winners were recognized at the 5th annual Aii Conference hosted by Illuminas, Fordham University’s Gabelli School of Business’ Responsible Business Coalition, and the Norwegian School of Economics.

Gina Woodall, VP of Client Services and Group Director, Illuminas, shared findings from the 2022 study which included how customers’ perception of innovation and social innovation have continued to climb since 2018. She said, “The pandemic was very challenging, and it forced a great deal of innovation across the brands we measure. Although we are still seeing an increase again this year, we do believe as things begin to settle down, we’ll start to see innovation level off. Social innovation tells a similar story. For firms that are willing to rely on innovation as a means of competing, this will provide an opportunity for them to differentiate themselves.”

At this year’s conference, representatives from some of the winning companies participated in three panels on innovation, the Voice of the Customer in meeting ESG goals, and social innovation at service organizations.

Kim Majerus, from Amazon Web Services, revealed the multinational technology company’s number one principle is customer obsession. They start with their customer and think about their challenge, opportunity, and what they are trying to solve – which is called their “working backwards process”. Highlighting the company’s innovation efforts, in the past year AWS has rolled out 3,084 services and features based on the feedback they were receiving from their customers, as well as helping them innovate within their own markets.

Ellis Jones, of  Goodyear, shared how the tire company has 4 pillars for sustainability: sustainable sourcing, responsible operations, advanced mobility, and inspiring culture. Within these four pillars, they have set their sights on three very important goals – eliminating serious injuries within the manufacturing process, developing 100% sustainable material tires by 2030, and a climate ambition to reach net-zero value chain greenhouse gas emissions by 2050. As mobility advances, Jones sheds light on the company’s future business strategy: “As our business model changes, how do we help different populations, different communities move toward this new mobility space and how is it going to impact our customers, communities, and associates?”

Katherine Hunter, of  JP Morgan, conveyed how when thinking about environmental and social challenges they have two big priorities – advance inclusive growth and support the transition to a low carbon economy. Their CSR division has several tools to make this happen, mainly using an integrated approach that includes policy, research, and employee engagement. For a systemic change, the company must rethink how they do business and ensure CSR is within all of their lines of business, products, and services to ensure an overall impact. As an example, Hunter said “in 2020 the firm announced a $30 billion racial equity commitment to help close the racial wealth gap, which comes from all lines our business.”

Meaningful innovation that incorporates a societal impact is part of what makes these companies stand apart from their competitors. The Aii proves that innovation without the intent to make a difference doesn’t build strong customer loyalty.

The conference was attended by 150 people interested in innovation.

Join us on November 14, 2023 for the 6th annual American Innovation Conference.

About the American Innovation Index™ and Social Innovation Index™
The American Innovation Awards are based on the American Innovation Index™ that rates and ranks nearly 200 U.S. companies based on perceptions of their customers in a national survey of over 6,000 consumers. The survey is administered by Illuminas, a market research firm specializing in services, technology and innovation.

Top 25 leaders on the American Innovation Index™ will receive awards at the 5^th annual American Innovation Conference hosted by the Fordham University Gabelli School of Business

Today, the top innovators from the 2022 American Innovation Index™ (Aii) were announced by the Fordham University, Gabelli School of Business’ Responsible Business Coalition and market research firm Illuminas. The Aii is the only survey in the US that measures company innovativeness based on customers’ experiences. This year, the index reveals that American business innovation climbed to a 5-year high.

The last five years have been turbulent times for America, as companies were required to re-think their business models and meet the ever-changing consumer needs and priorities. After a dramatic surge during the height of the pandemic, the Aii rose 5.6 points from 2018-2022. Companies with the biggest gains in company innovativeness over the past 5 years include:

• Ahold, +20.6 points
• United Airlines, +15.2 points
• Ross Stores, +13.7 points
• American Family Insurance, +12.0 points
• Office Depot, +11.9 points
• Macys, +11.5 points
• Aetna, +11.2 points
• Albertsons, +11.2 points
• Gap Inc., +11.1 points
• AT&T, +10.5 points
• Expedia, +10.2 points
• Delta Airlines, +10.1 points

The researchers at Fordham University and Illuminas have proven that a focus on innovation that benefits the customer directly links to higher stock returns for the companies that make this commitment. Companies with higher innovation scores on the American Innovation Index are rewarded with higher loyalty, ultimately leading to greater financial success.  Customer loyalty did not experience a dramatic jump over the past five years, but is up an average of 3.7 points, showing that innovation that benefits the customer does pay off.

“Top companies understand the effect of innovation on customer loyalty, and our research has proven it. Companies that invest in customer-focused innovation are more financially successful, but it does take time for companies to reap the rewards of higher loyalty,” said Lerzan Aksoy, Ph.D., Professor of Marketing at Fordham University’s Gabelli School of Business.

In this year’s American Innovation Index study, the top 25 Aii leaders will receive awards at the 5^th annual American Innovation Conference hosted by Fordham University on November 15, 2022, and include: Apple, Toyota, Ikea, Nike, John Deere, Louis Vuitton, Weber, Honda, Ford, GE, Samsung, Airbnb, Michael Kors, Chime, Trader Joe’s, General Motors, Stanley Black and Decker, Microsoft, Amazon, Goodyear, Polo Ralph Lauren, Spotify, Nissan, Aflac, Bridgestone Tire, and Quicken Loans.

Not all U.S. companies have been recognized for a commitment to innovation by their customers over the past 5 years.  Some have declined on the Aii, including Netflix (-2.9 points), Choice Hotels (-2.7 points), Southwest Airlines (-2.5 points) and Dish Network (-2.3 points).  Facebook, Amazon and USAA also lost at least one point.

Social Innovation

Social Innovation among American businesses has also experienced a sizable increase during the past 5 years, likely due in part to the pandemic, social justice movement, and climate crisis, as well as the rise in focus on Environmental, Social, and Corporate Governance (ESG) by American companies.  The Social Innovation Index (Sii) measures company innovation that benefits society and the environment based on the experiences of customers, and has risen 5.9 points over the past 5 years.  Companies that increased the most in Social Innovation include:

• Ahold (Grocery), +16.9 points
• American Family Insurance, +15.8 points
• United Airlines, +15.2 points
• Navient, +14.5 points
• Gap Inc., +14.2 points
• Alaska Airlines, +14.1 points
• Dunkin’, +13.4 points
• Ross Stores, +13.2 points
• McDonalds, +12.3 points

“Customers have noticed the efforts of top companies to innovate for the greater good, and our research has proven that it matters to them. They reward companies with a focus on social innovation with higher loyalty, and this in turn, is reflected in the bottom line,” said Gina Woodall, VP of Client Services and Group Director, Illuminas.

Companies ranked highest on the Sii are #1 Toyota, #2 John Deere, and #3 Ikea which are also leaders in company innovation. Other rankings include financial services companies, #4 Loan Depot and #9 SoFi, as well as automakers including #5 Nissan, #6 Ford, #7 Honda, and #8 General Motors, and #10 GE.

About the American Innovation Index:

The Aii scores and ranks the innovativeness of U.S. companies based on their customers’ experiences. The 5^th annual study was conducted in July-August 2022, and covers 190 firms from 19 industries, such as airlines, hotels, banks, TV and Internet service providers, wireless phone providers, manufacturers, and retailers. The study surveyed 6,416 consumers and covered over 30,000 customer-company relationships. To date, no large scale, scientifically vetted measure of customer-perceived innovation exists in the United States. For more information about the Aii and a full list of company rankings, visit https://www.fordham.edu/gabelli-school-of-business/industry-collaborations/responsible-business-coalition/get-informed/american-innovation-index-and-social-innovation-index/

About Fordham University:

Fordham University offers exceptional education distinguished by the Jesuit tradition across nine schools. Fordham awards baccalaureate, graduate, and professional degrees to approximately 15,000 students.

About Illuminas:

Illuminas is a strategic research consultancy that has been advising Fortune 500s, mid-sized firms and non-profits on their innovation and marketing strategy for over two decades.  us.illuminas.com

The American Innovation Conference is dedicated to sharing, collaborating, and celebrating customer-focused innovation and understanding its impact on company success. Companies that are perceived to be innovative by their customers are more attractive, enjoy higher loyalty, and are ultimately more successful than companies that lag in innovativeness.

Below are links to each session of the conference. We hope you enjoy hearing more about the American Innovation Index (Aii) and the results of this year’s study, as well as how winners like Netflix, Aflac, John Deere, and Toyota approach innovation in their organizations. If you would like more information about the Aii and how your organization can be more innovative and socially innovative, reach out to Joe Taliuaga at joseph.taliuaga@us.illuminas.com or 703-757-5213 ext. 123. You can also visit www.americaninnovationindex.com for more information.

Conference Introduction:

Keynote by Mike Colarrossi, Vice President, Product Line Management, Innovation and Sustainability, Avery Dennison:

Results of the 2021 American Innovation Index by Gina Woodall, VP of Client Services and Group Director, Illuminas:

Panel – Innovation During the Pandemic featuring:
Buffy Swinehart, Senior Manager, Corporate Social Responsibility, Aflac
Myles Worthington, Head of Global Audiences, Brand & Editorial Marketing, Netflix
Brian Kiser, Automotive Training Professional, Toyota
Pam Piligian, SVP Marketing & Communications, Navy Federal Credit Union

Panel – Sustainability and Social Innovation featuring:
Ellis Jones, VP and Chief Sustainability Officer, Goodyear
Tom Gavitt, Country Innovation & Co-Creation Manager, IKEA US
Todd Florence, Corporate Communications and Marketing Communications Leader, John Deere
Carl Otto, Senior Analyst Sustainability & ESG, JetBlue

In the face of global climate change, social inequality, and the COVID-19 pandemic, today’s top companies are breaking the barriers on what it means to innovate.  From rethinking how we vacation, to making medical breakthroughs and designing entirely automated cities, companies are thinking beyond the shelf lives of their own products and services and focusing on health, well-being, and a sustainable future.

Extraordinary innovation and social innovation earned top U.S. companies high ranks on the American Innovation Index™ (Aii), a research program that quantifies the innovativeness of nearly 200 companies from the customer’s point of view. Winners are selected based on the results of a national survey of 6,000 U.S. consumers who rated companies they do business with across 20 industries on key metrics, including innovation, customer loyalty, attractiveness, and social innovation.

Aii winners were recognized at the 4th annual Aii Conference hosted by Illuminas, Fordham University’s Gabelli School of Business’ Responsible Business Coalition, and the Norwegian School of Economics.

Gina Woodall, VP of Client Services and Group Director, Illuminas, shared findings from the 2021 study which included how customers’ perception of innovation and social innovation have continued to climb, and the pandemic’s impact on innovation varies markedly by industry sector. What’s more, she said “innovation is a powerful strategy to drive growth in a crowded sector where satisfaction is just not enough.” And, “understanding why customers believe you are or are not innovative and socially innovative compared to competitors can help prioritize your investments.”

Representatives from some of the winning companies participated in two panels on innovation and social innovation at the conference.

Buffy Swineheart, from Aflac, shared how the insurance company’s famous mascot played a key role in its philanthropic efforts. Highlighting the company’s social innovation efforts, Aflac’s duck was developed into a plush toy and app as a “social robot for children with cancer, enabling children to better express their feelings to their nurses, their caregivers, and their families,” said Swineheart, adding that Time magazine ranked the toy as one of the best inventions of 2018.

Brian Kiser, of Toyota, revealed the car company’s vision for a fully automated city outside of Tokyo, Japan to study autonomous vehicles, innovative street design, smart home technology, robotics, and new mobility products.  “There will be real people living in the city full time. We will study what their needs are and how we can best address those needs with new technologies,” he said.

Few other occupations rely on the environment more than farming. Todd Florence, of John Deere, said the company recently introduced new GPS and auto-tracking technology for its tractors to precisely tread over the land once, which could save up to 700 gallons of fuel. Florence said, “In the end, it was a variety of perspectives from different stakeholders that informed how we prioritize our ESG goals.”

Meaningful innovation that incorporates a societal impact is part of what makes these companies stand apart from their competitors. The Aii proves that innovation without the intent to make a difference doesn’t build strong customer loyalty.

The conference was attended by more than 300 people interested in innovation.

Join us on November 15, 2022 for the 5th annual American Innovation Conference.

About the American Innovation Index™ and Social Innovation Index™
The American Innovation Awards are based on the American Innovation Index™ that rates and ranks nearly 200 U.S. companies based on perceptions of their customers in a national survey of over 6,000 consumers. The survey is administered by Illuminas, a market research firm specializing in services, technology and innovation.

September 21, 2021

Apple, Samsung and Weber Ranked as America’s Most Innovative Companies

With the world still reeling from the effects of the COVID-19 pandemic, American business focused on innovation and social innovation to succeed in these uncertain times.  The top innovators from the 2021 American Innovation Index™ (Aii) have been announced by Fordham University, Gabelli School of Business’ Responsible Business Coalition, along with the Norwegian School of Economics, and market research firm Illuminas  The Aii is the only survey in the US measuring company innovativeness based on customers’ experiences.

After a dramatic 5 point average increase in company innovativeness during the height of the pandemic, the index has increased another 1.2 points on average across U.S. companies in 20 industries since last year.  Following #1 Apple, #2 Samsung, and #3 Weber, are auto manufacturers, Ford and Toyota tied for 4^th place, and Ikea in 6^th place on customer-perceived innovation, which is higher than tech giants Netflix (#8), Amazon (#21), and   Microsoft (#36).

The top 20 Aii leaders will receive awards at the 4^th annual American Innovation Conference hosted by Fordham University on November 16, 2021, and include:  Apple, Samsung, Weber, Ford, Toyota, Ikea, Trader Joe’s, Honda, Netflix, SoFi, Chick-fil-A, Loan Depot, Airbnb, USAA, Aflac, Goodyear, Nike, Hyundai, John Deere and PayPal.

“The pandemic continues to challenge companies to adapt their business models at a faster rate than in normal times,” said Lerzan Aksoy, Ph.D., Professor of Marketing at Fordham University’s Gabelli School of Business.  “The American Innovation Index recognizes the companies with the highest innovation index scores based on customer ratings.  The results show that customers are noticing the speed of innovation by top companies in response to these turbulent times.”

“The same is true when we look at the Social Innovation Index™ (Sii).  Customers have noticed the efforts of top companies to innovate for the benefit of society and the environment in light of the pandemic and the climate crisis,” said Gina Woodall, VP of Client Services and Group Director, Illuminas.  Companies ranked highest on the Sii are #1 Loan Depot, #2 SoFi, and #3 Ford which are also leaders in company innovation.  Other notable companies in the top 20 on the Sii are #6 JetBlue, #10 HealthNet, and #16 Goodyear.

 

About the American Innovation Index:
The Aii scores and ranks the innovativeness of U.S. companies based on their customers’ experiences. The 4th annual study was conducted in July-August 2021, and covers 175 firms from 20 industries, such as airlines, hotels, banks, TV and Internet service providers, wireless phone providers, manufacturers, and retailers. The study surveyed 6,279 consumers and covered over 28,000 customer-company relationships. To date, no large scale, scientifically vetted measure of customer-perceived innovation exists in the United States.

For more information about the Aii and a full list of company rankings, visit www.americaninnovationindex.com

https://www.fordham.edu/gabelli-school-of-business/responsible-business-coalition/american-innovation-index-and-social-innovation-index/

About Fordham University:
Fordham University offers exceptional education distinguished by the Jesuit tradition across nine schools. Fordham awards baccalaureate, graduate, and professional degrees to approximately 15,000 students.

About Illuminas:
Illuminas is a strategic research consultancy that has been advising Fortune 500s, mid-sized firms and non-profits on their innovation and marketing strategy for over two decades. us.illuminas.com

About the Norwegian School of Economics:
NHH Norwegian School of Economics, one of the leading business schools in Europe, launched the Norwegian Innovation Index in 2016 and partnered with Fordham University’s Gabelli School of Business and Illuminas to replicate the methodology in the US.

November 16,2020

“Innovation stimulates our imagination of what is possible and what we want our world to be,” reflected Donna Rapaccioli, dean of the Gabelli School of Business at Fordham University, as she kicked off the third annual American Innovation Conference (AIC). Hosted virtually for the first time, the AIC celebrates customer-focused innovation and leaves participants with fresh ideas to integrate into their workplace.

The conference featured speakers representing America’s most innovative companies, including Adobe, General Motors, Goodyear, IKEA, JetBlue, John Deere, Sherwin-Williams, Stanley Black & Decker, Toyota, and Trader Joes.

The conference took place on November 16th and was hosted by the Gabelli School of Business, Fordham University, in partnership with Illuminas and the Norwegian School of Economics. The conference focused on what it means from a customer point of view to be “innovative” in delivering products and services, and “socially innovative” in benefiting society and the environment.

Sheri Feinzig, partner at IBM’s global business services talent and transformation practice, anchored the conference with a keynote speech about diversity.  She explained diversity “is more than bringing together people with different experiences; the exposure to diversity changes the way we think. When we encounter people we expect to be different, we are better at solving problems.” Feinzig left her audience with tangible ideas for improving workplace diversity at every stage of the talent life cycle to increase innovation. “Diversity is hard,” she acknowledged. “It’s an uncomfortable truth that humans like to be around people who look and think like us. But it doesn’t evoke that deep thinking that is needed for innovation.”

“All it takes to innovate is for one person to identify an opportunity and make it happen.”

Lerzan Aksoy, Fordham University

As diversity drives innovation, innovation drives organizational success. A panel comprised of an executive from John Deere, one of the 20 highest-rank companies on the American Innovation Index and other subject matter experts from exemplar companies delved into the role that innovativeness plays in talent recruitment, work culture, and employee engagement. Carol Costello’s position as research and design brand strategist at Spotify is tied to Spotify’s engineering teams, and not its marketing unit. Costello pointed out that the arrangement itself is innovative, allowing her to focus on the company’s core functions, while other areas handle external optics.

A second panel focused on the challenges of the COVID-19 pandemic and the last year. Stephen Revnew, SVP of innovation at Sherwin-Williams, shared how the pandemic pushed his organization to create new options for customers to order color samples online before making a purchase.

Selwyn Crittendon, business development and innovation manager at IKEA U.S., explained steps the company took to establish a logistical framework to avoid sending returned items to the landfill.

Gina Woodall, VP of Client Services and Group Director, Illuminas, provided the latest findings from the American Innovation Index™ Study as well.  In 2020, both customer innovation and social innovation jumped five percentage points compared to a year ago.  According to Gina, “it’s been a challenging year for companies, but they adapted their business models to succeed. Times of crisis can spur innovation and move companies forward.”

The conference was attended by more than 500 people interested in innovation, the largest audience on record.

Join us on November 16, 2021 for the 4th annual American Innovation Conference.

About the American Innovation Index™ and Social Innovation Index™

The American Innovation Awards are based on the American Innovation Index™ that rated and ranked nearly 200 U.S. companies based on perceptions of their customers in a national survey of over 5,000 consumers. The survey is administered by Illuminas, a market research firm specializing in services, technology and innovation, and is co-sponsored by Fordham’s Gabelli School of Business and Norwegian School of Economics.

USAA took the No. 1 spot among auto, property and casualty insurance providers in the third annual American Innovation Index™, which measures how customers experience innovation in doing business with their insurance providers. USAA also ranked at the top on customer perceptions of being socially innovative.

The American Innovation Index™ is a project of Fordham University’s Gabelli School of Business, New York; the Norwegian School of Economics, Bergen, Norway; and market research firm Illuminas, Austin, TX.  The index score is based on the customer perceptions of companies as being innovative, creative, pioneering and transformational.

Following San Antonio, Texas based USAA, the top 5 auto, property and casualty insurance providers (from highest to lowest) included:

• Geico
• American Family Insurance
• Allstate, and
• Progressive Insurance

The study also had customers evaluate institutions on the Social Innovation Index™, which includes perceptions of the company caring for and innovating for the greater good of society and the environment.  The top 5 ranked institutions, starting with the highest, consisted of USAA, Geico, American Family Insurance, Liberty Mutual, and Allstate.

“Our research shows that brands are viewed as more innovative when customers notice changes in the products and services, the ease and speed of service delivery, customer care and physical and digital presence,” Charles Colby, Strategic Advisor and Methodologist at Illuminas and the chief methodologist for the study.

The scores are based on the experiences of consumers interacting with auto, property and casualty insurance providers over a 12-month period.  In the auto, property and casualty sector, ease of business, responsive customer service, and unique discounts and deals are top factors driving customer perceptions of innovativeness. Customers pinpoint efficiency, original ways of submitting claims, and being kept up to date as innovative developments in the industry.

Social innovation consists of perceptions of a company being a leader in and placing a priority on benefiting society and the environment. In the auto, property and casualty industry, customers focus on solutions that promote environmental sustainability, as well as incentives for behaviors that promote green energy. At the national level, customers notice efforts in the industry to go paperless, as well as rewarding good driving behaviors, driving energy efficient vehicles, and giving discounts to customers who are in school and in good academic standing.

One specific area that may stand out to customers and led to rating USAA high in innovation is the implementation of “USAA Labs.” Through USAA Labs, members get a first look of newly launched innovations. It gives members a chance to enroll in some of these pilot programs. For instance, USAA partnered with Google Cloud Work to simplify the claims experience. Together, both companies developed machine learning models that will allow nearly real time damage estimates from digital images. In the auto sector, USAA partnered with CarAdvise®, an online marketplace for vehicle maintenance and repairs. With over 20,000 locations nationwide, customers can choose where they want their vehicle serviced and reduce human interaction and enable social distancing due to Covid-19.

USAA also continues to be involved in local communities by adopting business practices that preserve the environment. “USAA increased their recycling and going fully paperless efforts aggressively in the past couple of years. In their San Antonio headquarters alone, USAA saves millions of gallons of water a year through recycling efforts, thus, conserving adequate water supply to the community, reducing pollution, and conserving fuel resources,” said Charles Colby.  USAA also invests in programs that encourage educators to continue developing their professional development, provides local families and individuals basic needs resulting from hunger and homelessness, and has a strong presence in natural disaster response.

In general, the auto, property and casualty insurance industry performs slightly higher than other sectors on their innovation index, according to the study. Out of 173 companies, the American Innovation Index™ Scores range from 84.2 (by top-ranked Ikea) to 51.4, with the median score being 68.2. USAA (76.7), Geico (71.9), American Family Insurance (70.0), and Allstate (69.0) are the companies in the industry that landed above the median.

Ikea took the No. 1 spot overall in the survey this year, proving the most innovative companies are not always tech firms. Apple (No. 2), Trader Joe’s (No. 3), John Deere (No. 4), and Weber (No. 5), a manufacturer of grilling equipment, complete the top 5 customer-perceived most innovative companies. Major tech brands such as Twitter (No. 71) and Facebook (No. 137) lag behind.

“This year, the American Innovation Index™ observed an across the board increase in innovation scores by companies, a phenomenon driven by their response to the unprecedented challenges caused by the pandemic, economy and social movements.  While most companies were seen as more innovative than in the past, the ones that leap to the top of their industry will experience the most positive growth and financial performance,” said Lerzan Aksoy, professor of marketing at Fordham University’s Gabelli School of Business. “The American Innovation Index™ is unique because it recognizes the companies with the highest innovation index scores based on customer ratings.”

“Companies can excel in satisfaction, but if they do not deliver an innovative customer experience, they face extinction in challenging times as we experienced in 2020,” said Gina Woodall, VP of Client Services and Group Director, Illuminas. “Your industry does not matter. For example, among supermarkets, Trader Joe’s is an innovation leader while other supermarkets rank near the bottom.”

The American Innovation Index™ study was conducted in July 2020 and covers 173 firms from 20 industries. The researchers surveyed 5,012 consumers and covered more than 23,000 customer-company relationships.

The economic and social disruption caused by the Covid-19 pandemic was unprecedented in modern times impacting every business and the customers they serve.  The pandemic immediately affected consumers’ everyday lives, including how they shopped for and purchased products and services, ultimately having a negative impact on the economy. It is estimated the pandemic cost 400 million full-time jobs globally in the second quarter of 2020[1], and in the U.S., the GDP dropped by 32.9%, the biggest decline since the records began in 1947[2].

Since consumers were forced to change their buying patterns, companies had two options: succumb or innovate. Many companies stepped up to the challenge and quickly put strategies in place to adapt their product or service offerings given the circumstances. Other companies had a difficult time adjusting to the new needs of their customers in a pandemic and suffered for it. In early 2020, Illuminas conducted the 3^rd annual American Innovation Index (Aii) survey, which scores and ranks the innovativeness of U.S. companies based on their customers’ experiences.  As part of this year’s initiative, the survey measured companies’ response to the Covid-19 pandemic including how well they met their customers’ expectations in being innovative and responsive to their needs during this time.

The most innovative companies during the pandemic come from a variety of industries, including auto/property insurance, automotive, supermarkets, quick serve restaurants and health insurance.  USAA took the top spot as the company with the most innovative response followed by American Family Insurance, Ford, Chick-fil-a, and Kaiser Permanente. In contrast, companies in the airline, telecommunication, and lending industries fell short of customers’ expectations in their Covid-19 response. Companies that won on innovation during the pandemic shared a common theme—they acted fast to address their customers’ needs.  USAA offered unprecedented financial assistance quickly to members facing financial burden, Chick-fil-a restructured its drive through and immediately redesigned its app to make mobile ordering and curbside pick-up seamless, Ford redesigned its assembly line to produce PPE and ventilators using auto materials, and Kaiser Permanente jumped to the forefront in Covid-19 research, immediately employed mitigation strategies at its centers, and used its industry leading digital technologies to manage patient communications.

The pandemic shook the world, but some businesses were able to respond better than others.  Companies that had fostered a culture of innovation in their businesses were able to tap into it when the most extraordinary event of our times occurred. They came out on top in the eyes of their customers, while others fell behind.  A focus on innovation that is recognized by your customers can propel your business forward in the future as the next challenge occurs.

If you would like to learn more about how Illuminas can help your business measure customer innovation and identify opportunities to improve your innovativeness, reach out to Joe Taliuaga, Senior Director of Sales and Marketing, joseph.taliuaga@us.illuminas.com.

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[1] https://www.cnbc.com/2020/06/30/coronavirus-expected-to-cost-400-million-jobs-in-the-second-quarter.html

[2] https://www.weforum.org/agenda/2020/07/covid-19-coronavirus-usa-united-states-econamy-gdp-decline/

Airbnb took the No. 1 spot among lodging companies in the third annual American Innovation Index™, which measures company innovativeness based on customers’ perceptions and experiences.  Hyatt Hotels ranked at the top on the Social Innovation Index™, which gauges innovation that benefits society and the environment.

The American Innovation Index™ (www.americaninnovationindex.com) is a project of Fordham University’s Gabelli School of Business, New York; the Norwegian School of Economics, Bergen, Norway; and market research firm Illuminas, Austin, TX.  The index score is based on the customer perceptions of companies as being innovative, creative, pioneering and transformational.  For the lodging sector, the scores are based on the experiences of consumers who interacted with a brand in the past 12 months.

The top 5 lodging companies on the American Innovation Index™ (from highest to lowest) included:

• Airbnb
• Hyatt
• Marriott
• Hilton, and
• Best Western

For the Social Innovation Index, the top 5 ranked institutions, starting with the highest, consisted of Hyatt, Airbnb, Marriott, Best Western, and IHG.

“Our research shows that brands are viewed as more innovative when customers notice changes in the products and services, the ease and speed of service delivery, customer care and physical and digital presence,” Charles Colby, Strategic Advisor and Methodologist at Illuminas and the chief methodologist for the study.

The study showed that in the lodging sector, several factors drive customer perceptions of innovation, including ease of booking through technological developments and exclusive loyalty programs. Customers also notice positive changes in the perks and discounts available across the industry, as well as the high level of customer care through all communication channels.

Social innovation consists of perceptions of a company being a leader in and placing a priority on benefiting society and the environment. In the lodging industry, customers focus on how companies help them save money and make efforts to keep their locations clean, litter-free, and safe. Customers also notice when lodging companies care about the environment, and how their new location openings promote economic growth within the local community.

Airbnb is unique because it is an innovative disruptor in the industry, changing the way guests find places to stay away from home. One area that may lead to customers rating Airbnb high in innovation is its simple and novel booking procedure. Airbnb’s Instant Book allows people to make reservations as they would in a hotel and does not require approval from the host before they can be booked. Guests can mix and match their travel dates, and check-in plans with the host. Airbnb also offers the ability to customize the booking based on the purpose of the trip, whether it is a business trip or family vacation.

On the social innovation front, Airbnb promotes the fact that it prioritizes the safety of their guests and hosts.  For example, Airbnb partnered with the American Red Cross to provide general safety resources. Airbnb also promotes environmental well-being by hosting events that promote home sustainability. Earlier this year, Airbnb hosted a “Meet the Experts” event for hosts on Airbnb to find out more about sustainability and energy saving.

The lodging industry in general performs lower than other industry industries on their innovation index, according to the study. Out of 173 companies, the American Innovation Index Scores range from 84.2 (Ikea) to 51.4, for a median of 68.2. The majority of lodging companies Illuminas captured have scores below the median. Only Airbnb, Hyatt, and Marriott landed above the median (75.6, 68.8, and 68.7 respectively).

Ikea took the No. 1 spot overall, proving the most innovative companies are not always in technology. Apple (No. 2), Trader Joe’s (No. 3), John Deere (No. 4), and Weber (No. 5), a manufacturer of grilling equipment, complete the top 5 customer-perceived most innovative companies. Major tech brands such as Twitter (No. 71) and Facebook (No. 137) lag behind.

“The American Innovation Index™ is unique because it recognizes the companies with the highest innovation index scores based on customer ratings,” said Lerzan Aksoy, professor of marketing at Fordham University’s Gabelli School of Business. Professor Aksoy further observed, “this year, the American Innovation Index™ observed an across the board increase in innovation scores by companies, a phenomenon driven by their response to the unprecedented challenges caused by the pandemic, economy and social movements.  While most companies were seen as more innovative than in the past, the ones that leap to the top of their industry will experience the most positive growth and financial performance.”

According to Gina Woodall, VP of Client Services and Group Director, Illuminas, “companies can excel in satisfaction, but if they do not deliver an innovative customer experience, they face obsolescence,” said Gina Woodall, VP of Client Services and Group Director, Illuminas. “Your industry does not matter. For example, among supermarkets, Trader Joe’s is an innovation leader while other supermarkets rank near the bottom.”

The American Innovation Index™ study was conducted in July 2020 and covers 173 firms from 20 industries. The researchers surveyed 5,012 consumers and covered more than 23,000 customer-company relationships.

JPMorgan Chase Bank took the No. 1 spot among banks and credit unions in the third annual American Innovation Index™, which measures how customers experience innovation in doing business with their financial institutions.  Chase also ranked at the top on customer perceptions of being socially innovative.

The American Innovation Index™ (www.americaninnovationindex.com) is a project of Fordham University’s Gabelli School of Business, New York; the Norwegian School of Economics, Bergen, Norway; and market research firm Illuminas, Austin, TX.  The index score is based on the customer perceptions of companies as being innovative, creative, pioneering and transformational.

Following New York based Chase Bank, the top 5 financial institutions (from highest to lowest) included:

• Capital One
• TD Bank
• Citizens Bank, and
• Citi

The study also had customers evaluate institutions on the Social Innovation Index™, which includes perceptions of the company caring for and innovating for the greater good of society and the environment.  The top 5 ranked institutions, starting with the highest, consisted of Chase Bank, Citizens Bank, Fifth Third Bank, TD Bank, and Wells Fargo.

“Our research shows that brands are viewed as more innovative when customers notice changes in the products and services, the ease and speed of service delivery, customer care and physical and digital presence,” Charles Colby, Strategic Advisor and Methodologist at Illuminas and the chief methodologist for the study.

The scores are based on the experiences of consumers interacting with financial institutions over a 12-month period.  In the banking sector, the study found that several factors drive customer perceptions of innovation, including products that help streamline accounts and responsive customer service across multiple channels. Customers also notice positive changes in security and privacy with real-time alerts and loyalty programs that reward consumers in original ways.

Social innovation consists of perceptions of a company being a leader in and placing a priority on benefiting society and the environment. In the banking industry, these perceptions are reinforced when customers are aware of novel products and services that lead to social benefits. Customers are aware of nationwide efforts institutions make to adapt their business practices to help society and the environment, but also credit local community involvement and creating economic opportunities for people in those communities.

Areas that may lead to customers rating Chase Bank high in innovation are its product line and strategic partnerships. In the last year, Chase launched Secure Banking, a low-cost checking account that makes a traditional banking relationship accessible to a larger share of the population. More recently, Chase Bank secured a partnership with Sensibill, a receipt capture and management solution. As a result, by logging into the Chase Mobile Banking app, customers gain greater functionality including the ability to manage home office expenses, submit proof of purchase for insurance claims, track spending at a detailed level.

Chase bank also continues to invest back into local communities. Late last year, the bank opened its first community-inspired branch model where they collaborate with local community organizations to offer free skills training, small business pop-ups, and fintech innovation to Harlem residents.  “By connecting neighbors with local businesses, Chase promotes local communities’ well-being and economic growth,” said Charles Colby.

The banking industry in general performs lower than other sectors on their innovation index, according to the study. Out of 173 companies, the American Innovation Index™ Scores range from 84.2 (by top-ranked Ikea) to 51.4, with the median score being 68.2. The majority of banking companies Illuminas captured have scores below the median. Only Chase Bank and Capital One landed above the median (70.3 and 69.2 respectively).

Ikea took the No. 1 spot overall in the survey this year, proving the most innovative companies are not always tech firms. Apple (No. 2), Trader Joe’s (No. 3), John Deere (No. 4), and Weber (No. 5), a manufacturer of grilling equipment, complete the top 5 customer-perceived most innovative companies. Major tech brands such as Twitter (No. 71) and Facebook (No. 137) lag behind.

“This year, the American Innovation Index™ observed an across the board increase in innovation scores by companies, a phenomenon driven by their response responding to the unprecedented challenges caused by the pandemic, economy and social movements.  While most companies were seen as more innovative than in the past, the ones that leap to the top of their industry will experience the most positive growth and financial performance,” said Lerzan Aksoy, professor of marketing at Fordham University’s Gabelli School of Business. “The American Innovation Index™ is unique because it recognizes the companies with the highest innovation index scores based on customer ratings.”

“Companies can excel in satisfaction, but if they do not deliver an innovative customer experience, they face extinction in challenging times as we experienced in 2020,” said Gina Woodall, VP of Client Services and Group Director, Illuminas. “Your industry does not matter. For example, among supermarkets, Trader Joe’s is an innovation leader while other supermarkets rank near the bottom.”

The American Innovation Index™ study was conducted in July 2020 and covers 173 firms from 20 industries. The researchers surveyed 5,012 consumers and covered more than 23,000 customer-company relationships.

The Year 2020 has had a dramatic effect on consumer lifestyles that will fundamentally transform the manner in which firms must deliver their services. Consumers are increasingly being forced to use and are being educated in the use of digital technologies in every aspect of life. Examples include the use of mobile apps for financial services, online ordering of products, and telemedicine. As the world emerges from the COVID-19 pandemic, companies must ask the questions of “what is the new normal?” and “what do customers expect from us?”

Check out this presentation shared at the Insights Symposium by Gina Woodall, VP of Client Services and Group Director, Illuminas and Lerzan Aksoy, Associate Dean of Undergraduate Studies and Strategic Initiatives and Professor of Marketing at Fordham University’s Gabelli School of Business in New York City to learn:

• Winners and Losers: which companies are successfully navigating the new normal and which ones aren’t based on the latest data from the American Innovation Index™ that ranks 174 U.S. companies across 20 industries on company innovativeness based on the experiences of their customers?
• Changing Business Models for the Future: What are the consumer mindsets that exist across industries and what are their expectations in the future for service delivery?
• How a channel segmentation can guide strategy in the new normal

August 4, 2020 – In a world shaken by the COVID-19 pandemic and the social justice movement, business innovation and social innovation have emerged as important priorities for American business.  Against this backdrop, Fordham University’s Gabelli School of Business, along with the Norwegian School of Economics, and market research firm Illuminas, announced the top innovators from the American Innovation Index™ (Aii), the only survey in the US measuring company innovativeness based on customers’ experiences.

The survey found that company innovativeness has increased a record 5 points on average across U.S. companies in 19 industries since last year.  Following #1 Ikea, #2 Apple, and #3 Trader Joe’s, are long-time manufacturers, John Deere at #4 and Weber in 5^th place on customer-perceived innovation, which is higher than tech giants Netflix (#8),  Microsoft (#9), and Amazon (#10).

The top 20 Aii leaders will receive awards at the 3^rd annual American Innovation Conference hosted by Fordham University on November 16, 2020, and include:  Ikea, Apple, Trader Joe’s, John Deere, Weber, Toyota, Ford, Netflix, Microsoft, Amazon, Nissan, Samsung, Sherwin Williams, General Motors, USAA, Stanley Black and Decker, General Electric (GE), Adobe, Airbnb, Dunkin’ Donuts, and Charles Schwab.

“The pandemic has challenged companies to adapt their business models at a faster rate than in normal times,” said Lerzan Aksoy, Ph.D., Professor of Marketing at Fordham University’s Gabelli School of Business.  “The American Innovation Index recognizes the companies with the highest innovation index scores based on customer ratings.  The results show that customers are noticing the speed of innovation by top companies in response to these turbulent times.”

“The same is true when we look at the Social Innovation Index™ (Sii).  Customers have noticed the efforts of top companies to innovate for the benefit of society in light of the pandemic, social justice movement, and tougher economic times,” said Gina Woodall, VP of Client Services and Group Director, Illuminas.  Companies ranked highest on the Sii, #1 Ikea, #2 Toyota, and #3 John Deere, are also leaders in business innovation overall.  Other notable companies in the top 20 on the Sii are #8 Bridgestone Tire, #12 JetBlue, #13 JP Morgan, and #15 Costco.

About the American Innovation Index:

The Aii scores and ranks the innovativeness of U.S. companies based on their customers’ experiences. The 3^rd annual study was conducted in July 2020, and covers 173 firms from 19 industries, such as airlines, hotels, car rental companies, banks, TV and Internet service providers, wireless phone providers, manufacturers, and retailers. The study surveyed 4,951 consumers and covered over 23,000 customer-company relationships. To date, no large scale, scientifically vetted measure of customer-perceived innovation exists in the United States.

For more information about the Aii and a full list of company rankings, visit www.americaninnovationindex.com

About Fordham University:

Fordham University offers exceptional education distinguished by the Jesuit tradition across nine schools. Fordham awards baccalaureate, graduate, and professional degrees to approximately 15,000 students.

About the Norwegian School of Economics:

NHH Norwegian School of Economics, one of the leading business schools in Europe, launched the Norwegian Innovation Index in 2016 and partnered with Fordham University’s Gabelli School of Business and Illuminas to replicate the methodology in the US.

About Illuminas:

Illuminas is a strategic research consultancy that has been advising  Fortune 500s, mid-sized firms and non-profits on their innovation and marketing strategy for over two decades.  us.illuminas.com

The American Innovation Index (Aii) is a multi-year research initiative that scores and ranks U.S. companies on their innovativeness and social innovativeness based on customers’ experiences.  Tim Keiningham, Strategic Consultant at Illuminas, and Professor Lerzan Aksoy of Fordham University will present the results of our research into the relationship between commercial innovation, social innovation and a company’s market performance at the AMA Winter Academic Conference in San Diego.  The research results prove that a company’s innovativeness and social innovativeness in the eyes of its customers link to financial performance.  Companies who invest in customer-perceived innovation see the benefit in their bottom-line.

Aii is a joint partnership between Illuminas, Fordham University’s Gabelli School of Business, and Norwegian School of Economics (NHH). The most recent wave of the study was conducted in May 2019, and covered 174 firms from 21 industries, such as airlines, hotels, car rental companies, banks, TV and Internet service providers, wireless phone providers, manufacturers, retailers and utilities. The study surveyed 8,863 consumers and covered over 38,000 customer-company relationships. To date, no large scale, scientifically vetted measure of customer-perceived innovation exists in the United States.

“It is heartening and extraordinary that innovation is not the province of a particular industry and proves that innovation that enriches the lives of individuals, and that seeks to make the world a better place is possible for all firms,” according to Fordham Professor Lerzan Aksoy, emcee of the 2nd annual American Innovation Conference. The conference featured speakers representing America’s most innovative companies, including Aflac, IKEA, John Deere, Stanley Black & Decker and Toyota, and gave awards to a roster of innovation winners that also included Amazon, Chick-fil-A, Ford, and Trader Joes.

The conference took place October 3rd in New York City, and was hosted by the Gabelli School of Business, Fordham University, in partnership with Illuminas and the Norwegian School of Economics. The conference focused on what it means from a customer point of view to be “innovative” in delivering products and services, and “socially innovative” in benefiting society and the environment.

Attendees heard from Tor Andreassen, Professor of Innovation, Director of Center for Service Innovation, Norwegian School of Economics, who spoke on the topic “When Quality is Not Enough.”  He talked about a tech-driven world shaken up by disruptors and drove home the lesson that financially sustainable companies use innovation to stimulate active and positive emotions in customer relationships.

“You need to innovate to survive. Nations cannot innovate. Firms, people and institutions can.” – Tor Andreassen, NHH

Later in the conference, companies rated highly on the 2019 American Innovation Index™ were celebrated, and speakers from these organizations spoke about how they approach and view innovation.

Maria Møllerskov Jonzo, a customer experience and insights leader at IKEA spoke about her company’s commitment to its customers as the driver of its innovation practices.  In part, customer feedback of its products and service using tools like design thinking spark ideas to innovate, such as city center locations near customers.

Two iconic brands, John Deere and Stanley Black & Decker, are viewed as both innovative and socially innovative by their customers. These companies cited a commitment to continuous innovation with a social purpose as a central theme in their organizations that drives their success. While Stanley Black & Decker is well known for brands like Craftsman tools, it is on the forefront of innovation in creating products like electronic tags that identify newborns and their mothers to ensure they don’t become separated. Mark Maybury, CTO at Stanley Black & Decker, says the secret to innovation is to observe carefully, listen deeply, think outside the box, and experiment with purpose.

Charles Colby, Strategic Advisor and Methodologist of Illuminas, talked about the methodology behind the American Innovation Index. According to Charles, “Innovation only matters if it is noticed by your most important stakeholders, customers.  That’s what this project is about, quantifying what customers  notice when they do business with your brand.”

The conference was attended by 250 people interested in innovation, including business executives, students, faculty and NGOs.

Join us on October 22, 2020 for the 3rd annual American Innovation Conference keynoted by Jerry White who shares in the 1997 Nobel Prize for Peace awarded to the International Campaign to Ban Landmines.

About the American Innovation Index™ and Social Innovation Index™

The American Innovation Awards are based on the American Innovation Index™ that rated and ranked 174 U.S. companies based on perceptions of their customers in a national survey of over 8,000 consumers. The survey is administered by Illuminas, a market research firm specializing in services, technology and innovation, and is co-sponsored by Fordham’s Gabelli School of Business and Norwegian School of Economics.

July 31, 2019 – Fordham University’s Gabelli School of Business, along with the Norwegian School of Economics, and market research firm Illuminas, announced the top innovators from the American Innovation Index™ (Aii), the only survey in the US measuring company innovativeness based on customers’ experiences.  The study also tracks customer perceptions of social innovativeness to give a complete picture of how companies impact customers and society.  The Gabelli School will recognize the top companies with an innovation award to be presented at the 2^nd annual American Innovation Conference to be held in October in New York.

Conducted in May 2019, the survey found Apple was rated the most innovative company in America by its customers for the second year in a row.  Innovation leadership is not confined to tech firms.  Automakers Honda and Toyota claimed the #2 and #4 spots respectively, while Ford and GM make the top 20.  Weber, the 126 year-old manufacturer of grilling equipment, ranked #3 on customer-perceived innovation.   Retailers Amazon and Ikea made the list of top 10 for the second year, ranking #5 and #6 respectively.  The nation’s largest credit union, Navy Federal, made the top 10 and was rated higher in innovation by its customers than all leading banks.

The top 20 leaders on the American Innovation Index™ will receive awards, and include:  Apple, Honda, Weber, Toyota, Amazon, Ikea, Google, Netflix, Navy Federal Credit Union, Samsung, Ford, GM, John Deere, Airbnb, Trader Joe’s, Chick-fil-A, Stanley Black and Decker, Aflac, Microsoft, and Southwest Airlines.

“In a competitive consumer market, innovation propels companies to the top of their industry and drives their growth and financial performance,” said Lerzan Aksoy, Ph.D., professor of marketing at Fordham University’s Gabelli School of Business.  “The American Innovation Index recognizes the companies with the highest innovation index scores based on consumer ratings. These companies have been able to mobilize resources in a manner that makes customers notice they are creative, pioneering and shapers in their industry.”

The Aii scores and ranks the innovativeness of U.S. companies based on their customers’ perceptions. The Aii covers 174 firms from 21 industries, such as airlines, hotels, car rental companies, banks, TV and Internet service providers, wireless phone providers, manufacturers, retailers and utilities. The study surveyed 8,863 consumers and covered over 38,000 customer-company relationships.

The American Innovation Index identifies certain innovation leaders that challenge traditional consumer manufacturing and services companies. Besides the obvious example of Amazon, which is rated higher on innovation than all other retailers, Netflix ranks #8 in customer innovation ratings, exceeding all the traditional cable companies, while Airbnb ranks #14 and exceeds all hotel chains.

“Companies can provide the highest levels of satisfaction, but if they do not deliver an innovative customer experience, they face becoming obsolete,” said Gina Woodall, VP of Client Services and Group Director, Illuminas  “We have found that your industry does not determine how innovative customers think your company is.  For example, in the airline industry, Southwest is an innovation leader ranking 20 out of 174 companies, while United is near the bottom ranking 169.”

The Social Innovation Index

The survey also measures social innovation through the Social Innovation Index™ (Sii), which is the degree to which customers of companies perceive them to innovate in ways that benefit society and the environment. Three of the top 10 most innovative companies on the American Innovation Index™ are also in the top 10 on social innovation according to customers, including Honda, Toyota and Navy Federal Credit Union. 

The top 20 companies on the Social Innovation Index™ will also receive awards from Fordham, including: Honda, Toyota, John Deere, Ford, Navy Federal, General Motors, Aflac, Chick-fil-a, Trader Joe’s, General Electric, USAA, Stanley Black and Decker, Weber, Ikea, Nissan, Google, Hyundai, Apple, Whirlpool and LG.

Another key finding from the Aii is that tech-driven firms that are rated high in customer innovation are not always leaders in social innovation.  Example: Netflix ranks in the top 10 on the American Innovation Index for customer innovation, but its ranking on the Social Innovation Index is 76.

Why Does Innovation Matter?

The American Innovation Index™ methodology is based on years of research by the Norwegian School of Economics that found that consumers are sensitive to company efforts to innovate, including in their products, value delivery, customer treatment and interaction space.  These innovation efforts, when moved “downstream” where they affect the customer experience, trigger positive emotional responses that translate into greater customer loyalty and attractiveness toward the brand.  Many studies attempt to rank companies on innovation through external indicators such as patents, R&D spending, productivity, and experts, but only the American Innovation Index™ captures innovation through what customers actually experience.  To date, no large scale, scientifically vetted measure of customer-perceived innovation exists in the United States. The Aii was created to address this gap in the body of knowledge.

Customers not only expect companies to innovate to meet their needs, but to innovate for a greater good.  The Social Innovation Index™ also correlates with customer loyalty and with perceptions of brand attractiveness.  The research to date reveals that the most successful companies achieve high customer scores on both customer experienced innovation and social innovation.

For more information about the Aii, visit www.Americaninnovationindex.com

About Fordham University:

Founded in 1841, Fordham is the Jesuit University of New York, offering exceptional education distinguished by the Jesuit tradition across nine schools. Fordham awards baccalaureate, graduate, and professional degrees to approximately 15,000 students from Fordham College at Rose Hill, Fordham College at Lincoln Center, the Gabelli School of Business (undergraduate and graduate), the School of Professional and Continuing Studies, the Graduate Schools of Arts and Sciences, Education, Religion and Religious Education, and Social Service, and the School of Law. The University has residential campuses in the Bronx and Manhattan, a campus in West Harrison, N.Y., the Louis Calder Center Biological Field Station in Armonk, N.Y., and the London Centre in the United Kingdom.

About the Norwegian School of Economics:

NHH Norwegian School of Economics is one of the leading business schools in Europe.  They launched the Norwegian Innovation Index in 2016 and partnered with Fordham’s Gabelli School of Business and Illuminas to replicate their methodology in the US.

About Illuminas:

Illuminas is a strategic research sonsultancy that has been advising  Fortune 500s, mid-sized firms and non-profits on their innovation and marketing strategy for over two decades.  www.Rockresearch.com

The American Innovation Index™ was the featured topic of the keynote address at the R&D 100 Conference in Orlando on November 15^th. The keynote was delivered by two team members of Illuminas who were instrumental in developing and launching the American Innovation Index™, Charles Colby, Strategic Advisor and Methodologist, and Gina Woodall, VP of Client Services and Group Director. The R&D 100 Conference, now in its fifth year, brings together leaders from the R&D community to exchange ideas in innovation, technology transfer and R&D strategies that will transform the future of R&D across industries. The Illuminas speakers presented the findings of the American Innovation Index™, an ambitious research program that quantifies and ranks customer-perceived innovation and social innovation from the customer point of view for nearly 200 companies in the U.S. The study is conducted in partnership with the Gabelli School of Business at Fordham University and the Norwegian School of Economics.

According to Charles Colby, the creator of the U.S. index, “Our talk with the innovation community [focused] on a winning KPI, customer perceived innovation. It is more important than satisfaction or net promoter scores because it strongly links to customer loyalty and differentiates industry leaders.” Gina Woodall added, “We also [discussed] the Social Innovation Index™. When viewed along with business innovation, it separates disruptors from the truly transformative firms.”

The conference spanned multiple disciplines so anyone interested in innovation was welcome to attend. The conference also featured awards for innovation leaders recognized by R&D Magazine.

For more information, visit:  https://www.rd100conference.com/

We are proud to announce that the Aii team has received the Best Practitioner Award at the Frontiers in Service conference for their presentation of The American Innovation Index™ (Aii).

The American Innovation Index (Aii) is an ambitious project to rate and rank U.S. companies across a variety of sectors based on their level of innovativeness, as viewed through the eyes of their customers. The study examines how consumers experience innovation from the leading companies they do business with, including how the companies interact with customers and their perceived social innovativeness. Innovativeness is an important feature for companies to address in their strategy because it correlates with loyalty, differentiates them from competition and drives growth.  Indeed, a company may actually invest too much in ensuring high satisfaction and not enough in new and innovative ways of meeting customer needs. Social innovation is also an area of emerging importance in a business environment where consumers (particularly Millennials) expect companies to broaden their focus to solve social and environmental problems.

The presentation introduces the project and describes insights from the 2018 baseline Aii (expected to be released in the second quarter). The Aii is conducted by Illuminas, a market research firm that specializes in services and technology, in partnership with the Social Innovation Collaboratory at Fordham University and the Center for Innovation at the Norwegian School of Economics (NHH). The study is based on the methodology of the Norwegian Innovation Index (NII), with the inclusion of additional metrics to capture social innovation. NHH is recruiting partners around the world to conduct local innovation index tracking studies, so that ultimately comparisons can be made across markets.

This project is unique in its scope. Most innovation listings of companies in the U.S. rely on financial metrics or “upstream” features such as R&D and technology investments. Using the NII methodology, the Aii relies on “downstream” results, that is, what customers actually experience from service providers when they do business after innovation investments have had an impact.  In addition, many innovation indexes rank countries instead of companies, usually based on macroeconomic measures. The true measure of innovativeness of a country is how its consumers perceive the companies they rely on for services and products.

You can view the award-winning presentation here.

The American Innovation Index™ (Aii) team has been talking a lot about the subject of company innovativeness, referencing our learning from benchmarks of 163 U.S. companies. But what is innovation, and why does it matter? In the Aii, “innovation” refers to the degree to which customers of a company find it to be creative, a pioneer in its category, and a market changer. You cannot automatically assume these are good things. The Devil’s advocate would say that innovation is superficial. After all, wouldn’t a consumer care more about desirable products, good service and great value, than about whether a company is creative, changes things around, and shakes up the market?

Fortunately, the Aii captures a lot more data than just measures of innovativeness, allowing us to delve into the correlates and consequences of innovation. Besides two key innovation indexes, general innovation and social innovation, we also quantify customer loyalty, the attractiveness of a company to do business with, the emotions customers experience dealing with a company, and their observations about change (good or bad) observed in the past year. These all fit into a framework developed by our colleagues at the Norwegian School of Economics who demonstrated that change triggers emotions of arousal and pleasure, which drive the perception a company as being innovative, which in turn makes the company more attractive and worthy of loyalty.

Let’s explore the question of why innovation matters with a deep dive into our rich company database. We identified the 10 companies with the highest level of customer loyalty, based on a scientific index that consists of willingness to recommend, say positive things and continue to do business with a company. The list includes a wide range of industries, with the top 3 including Toyota, USAA, and Southwest Airlines. Now, let’s take a look at the American Innovation Index™ rankings of these companies – it turns out that 5 of the 10 companies with the highest loyalty rank in the top 10 for innovativeness (and all but one is in the top 20). Similarly, 5 of these high loyalty companies are among the top 10 on the Social Innovation Index™. The two measures of innovativeness do not always overlap, therefore, 7 out of 10 of the companies with the highest loyalty meet the cut on one or both innovation indexes.

To further explore the relationship, we examined the bottom 10 out of 163 on loyalty. Rather than call them out by name, we can mention that 6 are TV/ISP providers, 2 are airlines, one is a hotel chain and one is a supermarket chain. In this case, 7 of the companies with the lowest loyalty are among the bottom 10 on general innovativeness, and 8 are among the bottom 10 in social innovativeness.

There is clearly a strong relationship between innovativeness, as experienced by customers, and overall loyalty. Loyalty is key to ensuring customers continue to do business with a company, allocate more share of wallet, and provide positive word of mouth. When companies are stagnant in how they do business, customers become disenchanted or bored, and gravitate to more exciting competitors, companies that are creative, innovative, and transformational. In some cases, entire sectors have problems with innovativeness that affects their loyalty. For example, traditional “cable companies” rank at the bottom, and are ripe for disruption by companies like Netflix (#5 on innovativeness, #12 on loyalty). The industry in which a company operates does not have to determine its potential to innovate. For example, the list of the 20 most innovative companies includes two airlines – Southwest (#8) and JetBlue (#13) – but the bottom 20 also includes two airlines. The implication for companies is to examine their innovativeness from the customer perspective, ensuring “upstream” initiatives affect the customer experience, and that customers continually notice change in offerings, delivery, customer care and appearance in the physical and digital space. These changes will pay off in the form of greater loyalty.

At its most basic level, social innovations are novel solutions to societal and environmental problems. They are designed to support social progress and are often aimed at addressing chronic systemic issues. One distinguishing characteristic of social innovations is that the value derived accrues primarily to society as a whole rather than to specific individuals or organizations.

Social innovation has taken on greater prominence with the introduction and promotion of the United Nations Sustainable Development Goals, which were specifically designed to “end poverty, protect the planet, and ensure prosperity for all.” Recognizing the critical role that companies must play in achieving these goals, the UN created Principles for Responsible Management Education (PRME) to “jump-start business action and responsible management everywhere on the new Sustainable Development Goals.”

The investment community has also placed greater emphasis on social innovation. To provide insight for socially conscious investors, several prominent environmental, social and governance (ESG) indices have been created (e.g. Bloomberg, Thomson Reuters). Moreover, this information has been used to create a wide variety of social impact investment funds. To quote The Wall Street Journal, however, “The evidence is clear that investors undervalue socially responsible firms.”

Innovation primarily impacts firm financial performance to the degree that it is observable by consumers, recognized as providing a superior value, and therefore results in increased loyalty. The American Social Innovation Index™ (by the American Innovation Index™) is the only scientifically vetted, national measure of customers’ perceptions of social innovation in the US. It measures the degree to which companies’ social innovation efforts have impacted customers’ perceptions of these firms in solving societal and environmental problems. As such, it serves as a benchmark for companies to assess both their social innovation performance and their success at tying their social innovation efforts back to their firms in consumers’ minds. It also provides insight for socially conscious investors to identify and gauge investment opportunities. And perhaps most importantly, it serves as a benchmark to assess the degree to which firms have embraced the Sustainable Development Goals endorsed by the UN Principles for Responsible Management.

How is innovation defined in the American Innovation Index™?

Today’s marketplace is continually transformed by technology and disruptive competition, making innovation a key driver of sustainability and growth.  The Aii defines innovation as constructive change that is observable by customers.  Customers view a company as innovative if their experiences suggest it is creative, pioneering and changing its industry (rather than reacting to change).  Companies may work diligently to become innovative, investing in R&D, building an innovation culture, and making tangible changes in processes and products, but these “up-stream” efforts are meaningless unless they have an impact “down-stream” at the point where customers interact and buy.  The Aii quantifies innovativeness at the company level for 200 leading American companies across 20 sectors.  Company ratings are based on what their own customers have experienced in the past year.

Why innovation matters…

The traditional paradigm for business success is to satisfy customer needs by offering attractive products, good value, and a satisfactory experience, but in reality, this is not enough.  Research shows that customer satisfaction has diminishing returns, while satisfaction fails to differentiate companies in mature markets where all competitors perform well.  Companies that deliver more innovation down-stream to their customers will achieve greater retention and growth than companies that merely satisfy needs but fail to change.

Customer-focused innovation and social innovation…

One type of innovation the Aii captures is customer-focused, consisting of new and better ways of meeting customer needs.  The other type of innovation the Aii captures is social innovation, which consists of delivering offerings and devising creative solutions to benefit society and the environment.  The two constructs are interconnected – an innovative company can be a disruptor that leaves a wake of social harm, or it can be socially transformative, using innovation to simultaneously improve the lives of customers and make the world better.  Customer-focused and social innovation, each measured by their own index, offer multiple ways for companies to differentiate themselves.

Before now, no large scale, scientifically vetted measure of customer-perceived innovation existed in the United States.  The American Innovation Index™ (Aii) was established in 2018 to address this glaring need in the US market and is the first national ranking of important industries and companies’ innovative abilities where the customers determine the level of innovativeness.  To learn more about the philosophy behind the Aii and details on its development see the whitepaper below.