Mastercard: What the Top 5 Traits of Leading Innovative Companies Mean to Channel Partners

As part of two recent reports, Mastercard and Harvard Business Review Analytic Services (HBRAS) developed the Business Innovators Index to better understand what businesses are prioritizing and whether that aligns with customer demands and expectations. It’s a measure of innovation in that the Index reveals whether companies are leading their industry in delivering what customers want, or if they are simply going through the motions. Not surprisingly, where a company scores on the Index also potentially affects success rates throughout the channel too.

The reports,“Become 2020: Inside the Leading Innovation Mindset” and its companion piece, “The CEO’s Innovation Playbook,” deliver numerous interesting data points. The overarching conclusion is that while everyone talks about innovation and values its importance to the business, few can create cultures that foster inventive or entrepreneurial thinking in the real world.

The Business Innovators Index is a scale of 0 to 100 wherein 100 represents the peak of innovative strategy, frameworks and behaviors.  Of the companies surveyed, only 17% were identified as leaders and those scored an average of 88 on the Index. Nearly half, 41%, were identified as laggards with a mean index of 37.

The top five traits of leading innovative companies are fastest speed to market, using data as an accelerant, innovation is the top priority, employees act and thin like entrepreneurs, and the focus on customer demands is obsessive.

Mastercard’s Michael Miebach

We asked Michael Miebach, chief product and innovation officer at Mastercard, to dig deeper into the insights Mastercard gleaned from this research. The credit card giant uses insights like these to improve its own innovation efforts and to help their business customers and partners do so as well.  Here’s what he had to say.

Channel Futures: What are the takeaways from this report for channel partners who are trying to identify which companies to partner with based on their ability to innovate and lead in the industry/marketplace?

Michael Miebach: Innovation leaders promote cultures that thrive amid new ideas and provide the funding, tools and space to pursue them. For too long, innovation was seen as a proprietary effort or the purview of a specific team. We know now the best ideas don’t come from working in a silo, they’re a result of collaboration and co-creation between established companies, entrepreneurs, developers and partners.

Partnership, though, is more than just finding the right fit for your technology or channels — it’s about matching cultures, ambitions and expectations. When trying to identify which companies to partner with, keep the following five common traits in mind: speed to action, data-driven decision-making, a commitment to innovation by leadership, an entrepreneurial culture and a relentless focus on the customer.

CF: American companies and stockholders are often accused of focusing too much on the short-term. Will continued consumer demand for immediacy compound the problems/flaws with near-sightedness in making business decisions? Will long-term growth be sacrificed even more for short-term gain — or is even that concept now antiquated?

MM: The most innovative companies are customer obsessed. And long-term growth will be…

… served to those who keep the customer front and center when making business decisions.

If you’re not giving your customers the experience that they seek — the product or the right interaction in getting there — there’s another company out there who will try to deliver on that promise. Customer experience is more than a focus on “what’s next.” It’s critical that you’re close enough to the customer to understand what makes them tick, how they work, their likes, dislikes, etc. and letting that drive innovation.

CF:  Is this business state of “constant evolution” through innovation good protection against disruptors? Or, do companies tend to improve their existing products and business models too much to build defenses against disruptors with entirely new business models (the very embodiment of innovation)?

MM: Constant evolution is necessary, as technology is advancing rapidly, and consumer and socioeconomic trends are shifting. It’s about embracing new business models, as delivering the best choice for customers exactly when they need it is critical.

And there’s tremendous opportunity to learn from today’s emerging fintechs, particularly in the areas of agile business practices, digital-first business plans and leading with an entrepreneurial mindset. Maintaining a relentless focus on optimization is also critical to breaking through. Complacency is the opposite of innovation — do what you do well, even better.

CF: What point(s) in this report surprised you most?

MM: What surprised me most from the report’s findings was that in this day and age, some executives didn’t recognize that innovation in data and privacy protection should be a focus. Both the businesses and consumers surveyed prioritized innovations that lower the cost of everyday goods and services, but they diverged after that.

Businesses prioritize personalization and speed of delivery, while consumers point to innovations that protect their data and privacy. Enhancing data security is a critical component of successful innovation and feeling safe is the foundation of all of our needs. No design makes the cut if it doesn’t fulfill your consumer’s main needs.