Fast take: Qualcomm, which has come up with advances ranging from satellite monitors to Eudora email software, maintains a productive balance between its nerdy technical side and bottom-line business acumen. So it is that what began in 1998 as a solution to an internal manufacturing problem has morphed into a marquee product. At the time, the company couldn't keep up with demand for its mobile equipment because writing custom software took so long. Its solution: a sort of operating system for wireless handsets. That software, called BREW, is becoming the standard for wireless-phone multimedia applications.
How it works
The idea grew out of a series of intense whiteboard meetings, says Peggy Johnson, president of the company's Internet-services division. "We have these wild staff meetings where, for a while, it's just pure chaos," Johnson says. "But you can only let the chaos go on for so long. Eventually, you have to have a moderator -- in this case me -- stand up and impose order."
Challenge
BREW soon may face the same challenges as Microsoft's Windows: new rivals and flat sales. Nokia has produced competing mobile software. And mature markets will only slowly trade up to phones that handle BREW-enabled applications. -- RU
The Innovation Scorecard team started with a universe of 119 telecom and networking-equipment companies with market capitalization of more than $100 million each. We screened out companies with revenue declines and compounded annual shareholder returns of -10% or lower over five years. Then we screened for past performance: income and revenue per employee, five-year revenue growth and total shareholder return, and number of product awards. To gauge future potential, we looked at estimated five-year earnings-per-share growth, patents granted, R&D investment, R&D investment as a percentage of sales, and share price attributable to growth.
Of 29 finalists, 18 participated in an online survey and interviews that explored innovation capacity -- the processes, tools, and culture created to support innovation. To determine the rankings, we weighted past performance scores at 30%, future potential at 30%, and innovation capacity at 40%.
These companies didn't make the top five, yet they offer distinctive approaches to innovation.
Adtran Fast follower. This router maker invests little to nothing in market research, instead focusing development efforts on lower-cost alternatives to the inventions of rivals. In hiring, it targets skills that suit the fast-follower strategy.
Motorola Trend seeker. Its management board dedicates several meetings each year to investigating potential disruptive technologies.
NetGear Partnership. This equipment supplier stays three months ahead of competitors by churning out products created by a large network of partner companies, which keep intellectual property rights.
Research in Motion Customer insight. The BlackBerry folks absorb market trends from carriers, end users, third-party research, and a customer advisory group. Software in its beta versions captures how products are actually used.
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