Intelligent Innovation
Innovation is no longer about quality and cost. Now, it's about transforming organizations to drive growth. "There are a lot of different things that fall under the rubric of innovation," says Darmouth professor Vijay Govindarajan in a recent issue of Business Week profiling top innovators. "Innovation does not have to have anything to do with technology."
In a survey conducted with Boston Consulting Group, the magazine ranked the 25 most innovative companies. The top 3 in America are Apple, Google and Procter & Gamble. In Asia, 3M breaks the top 3. In Europe, Nokia does. 
One of the key elements in innovation is coordination, according to the survey. It's about more than transcending silos. In fact, the top innovators "reroute reporting lines and create physical spaces for collaboration," the magazine contends. They reward innovation and build innovative cultures. "You have to be willing to get down into the plumbing of the organization and align the nervous system of the company," says James P. Andrew, who leads the innovation practice at BCG.
One company that is profiled is Procter & Gamble Co. It has introduced an open-source innovation strategy it calls "connect and develop." The idea is to leverage the best thinking from all over the globe. In fact, the company has an objective of generating 50% of its new products from outside its own R&D labs. How? "Tap networks of inventors, scientists, and suppliers for new products that can be developed in-house," the pub states.
The company was forced to reinvent and redesign its R&D operation to meet these goals. "It created new job classifications, such as 70 worldwide 'technology entrepreneurs,' or TEs, who act as scouts, looking for the latest breakthroughs from places such as university labs," according to the article. "TEs also develop 'technology game boards' that map out where technology opportunities lie and help P&Gers get inside the minds of its competitors."
Larry Huston, vice-president for innovation and knowledge, is leading the connect-and-develop initiative. Managers in every business unit are now responsible for driving culture change. They communicate with Huston who is leading the company's innovation networks. "You want to have a coherent strategy across the organization," says Huston. "The ideas tend to be bigger when you have someone sitting at the center looking at the company's growth goals."