The American Innovation Index

Customers Identify the Most Innovative Auto, Property, Casualty Insurance Providers

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 Rockbridge Associates Inc., Great Falls, Va.  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, Principal at Rockbridge Associates 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, President of Rockbridge. “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.

Innovation Leads to Company Success in the Pandemic

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, Rockbridge Associates conducted the 3rd 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 Rockbridge can help your business measure customer innovation and identify opportunities to improve your innovativeness, reach out to Joe Taliuaga, Director of Client Development, jtaliuaga@rockresearch.com.


[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 Rises to the Top

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 Rockbridge Associates Inc., Great Falls, Va.  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, Principal at Rockbridge Associates 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 Rockbridge 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, President of Rockbridge Associates, “companies can excel in satisfaction, but if they do not deliver an innovative customer experience, they face obsolescence,” said Gina Woodall, president of Rockbridge. “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.

Customers Identify the Most Innovative Financial Institutions

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 Rockbridge Associates Inc., Great Falls, Va.  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, Principal at Rockbridge Associates 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 Rockbridge 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, President of Rockbridge. “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.

Meeting Customer Needs in a Rapidly Changing World:

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, President of Rockbridge Associates, Inc. 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

Innovation Explodes in 2020

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 Rockbridge Associates, Inc., 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 5th 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 3rd 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, President of Rockbridge.  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 3rd 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 Rockbridge Associates to replicate the methodology in the US.

About Rockbridge Associates, Inc.:

Rockbridge Associates, Inc. is an outcome-based market research firm 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

American Innovation Index to be featured

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.  Rockbridge’s Chief Strategy Officer, Tim Keiningham, 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 Rockbridge Associates, 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.

MOST INNOVATIVE COMPANIES SHARE THE KEY TO THEIR SUCCESS

“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 Rockbridge Associates 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.

From left to right: Tor Andreassen, Norwegian School of Economics | Tracy Flanagan, Trader Joes | Ylana Ebba, Trader Joes | Maria Møllerskov Jonzo, IKEA | Mark Maybury, Stanley Black & Decker | Buffy Swinehart, Aflac | Lerzan Aksoy, Fordham University | Darcy Brito, Aflac | Dennis Williams, Chick-fil-A | Brian Kiser, Toyota | Charles Colby, Rockbridge Associates | Mark Moran, John Deere | Tim Keiningham, Rockbridge Associates

“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, founder and chief methodologist of Rockbridge Associates, Inc., 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 Rockbridge Associates, Inc., 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.

Consumers Pick America’s Most Innovative Companies

July 31, 2019 – Fordham University’s Gabelli School of Business, along with the Norwegian School of Economics, and market research firm Rockbridge Associates, Inc., 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 2nd 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, President of Rockbridge Associates, Inc.  “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 Rockbridge to replicate their methodology in the US.

About Rockbridge Associates, Inc.:

Rockbridge Associates, Inc. is an outcome-based market research firm 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

Rockbridge Keynoted the R&D Conference

The American Innovation Index™ was the featured topic of the keynote address at the R&D 100 Conference in Orlando on November 15thThe keynote was delivered by two team members of Rockbridge Associates, Inc. who were instrumental in developing and launching the American Innovation Index™, Charles Colby, Chief Methodologist and Founder, and Gina Woodall, President. 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 Rockbridge 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/

Award-Winning Aii Presentation

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 Rockbridge Associates, Inc., 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.

Why Innovation Matters

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.

What is Social Innovation?

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.

What is Innovation?

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.

The Foundation of Aii

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.