By: Mark Borden, Bill Breen, Jeff Chu, Josh Dean, Rebecca Fannin, Amy Feldman, Charles Fishman, Paul Hochman, David Kushner, Mark Lacter, Robert Levine ,David Lidsky, Ellen McGirt, Danielle Sacks, Chuck Salter, Elizabeth Svoboda, Linda Tischler
#11 PROCTER & GAMBLE (leveraging the ideas from outside their company)
When Procter & Gamble's stock tanked by more than half in 2000, CEO A.G. Lafley knew he was facing the dilemma of giant companies everywhere: Despite pouring money into R&D, P&G couldn't create new products fast enough to keep growing. The only way out, Lafley realized, was to innovate innovation. So he launched the Connect + Develop program, which allows outside developers to get their concepts and designs into P&G's product pipeline. An applicator developed by Cardinal Health (now Catalent), for example, helped P&G launch Olay Regenerist Eye Derma-Pods, now its top-selling skin-care item. Today, 42% of P&G products have an externally sourced component. And this giant is growing: Revenues rose 8%, to $78 billion, last fiscal year, while profits climbed 14%, to $11 billion.
#10 NINTENDO (took a different approach to games than its largest rivals – Sony and Microsoft)
By now you know the story: After Sony and Microsoft kicked the Mario out of Nintendo's GameCube in the Video Game War of 2001, the cutest and smallest of the three platform makers needed a new plan. "Nintendo took a step back from the technology arms race and chose to focus on the fun of playing, rather than cold tech specs," says Reggie Fils-Aime, president of Nintendo of America. The resulting Wii system, with its intuitive motion-sensitive controller and interactive games, appealed not only to teen boys but also to their sisters, moms, and dads. In 2007, Wii outsold both the PlayStation 3 and Xbox 360. But get this: Unlike its competitors--which lose money on each console and earn it back on software -- Nintendo turns a profit on its consoles, makes more selling games, then takes in still more in licensing fees. "Not to sound too obvious," Fils-Aime says, "but it makes good business sense to make a profit on the products you sell." Wall Street thinks so too. The company's stock has more than doubled over the past year. Nintendo's upset is doing more than attracting new gamers and bruising Sony and Microsoft. Says Sega of America president Simon Jeffery: "It has opened doors of creativity throughout the video-game business."
#26 HERMAN MILLER (Extending their marketspace to dramatically change how business is done – a true discontinuity)
The first product to emerge from Herman Miller's secret R&D lab in Michigan just over a year ago has nothing to do with the company's signature Aeron chairs or modular office furniture. Convia Programmable Infrastructure transforms the way companies install electrical systems, letting you reconfigure an entire building -- lighting, outlets, even heat and A/C -- with only a two-button point-and-click wand. The result? Not just flexibility in managing space, but also up to 30% energy savings. Times are good at Herman Miller. Among the dozens of fresh developments in 2007 were a personal climate control unit adapted from automotive technology and a voice privacy system that scrambles cell-phone users' voices to the ears of random passersby. Coming soon: office furniture with built-in cordless charging technology.