Can we pick the stars, or what?
COMMENTARY | Previous award winners continue to outperform the Dow to outperform Dow
For the last five years, the Chicago Innovation Awards have been recognizing companies and organizations in the Chicago area that have shown a true commitment to innovation. In a way, the awards -- created by the Chicago Sun-Times and Kuczmarski & Associates -- have become an early indicator of trends and successful ventures. Past honorees have ranged from large public multinationals to small privately held companies and non-profit organizations. Our 50 previous honorees, and the hundreds of nominees, have demonstrated that innovation knows no boundaries.
Companies that truly embrace innovation see many benefits -- from higher customer satisfaction to bottom line growth. Of the 50 honorees, 20 are publicly traded. In order to tangibly measure innovation's benefits, last year we created a virtual mutual fund based upon these companies, and once again the results are remarkable.
If an investor had invested in the S&P 500 each year, he would have generated a return of 31 percent over the last five years. If however he had placed $1,000 in each of the publicly traded winners a month before the awards every year from 2002 to 2006, then today he would be generating a return of 62 percent.
The innovation awards mutual fund continues to outperform the Dow over the last five years.
Some of the honorees that have experienced particularly exceptional growth are Aon, Motorola, Wilson (Amer Sports), Abbott Labs, Middleby and the Chicago Mercantile Exchange and the Chicago Board of Trade. Each of these companies has enjoyed a stock price appreciation of more than 50 percent since they first won.
The success of these innovation awards honorees is not limited to stock price growth. Sometimes they get acquired for a high premium too. Among the winners is Archipelago. Since it received the award in 2004 for the first fully open and electronic U.S. stock exchange, Archipelago has been acquired by the New York Stock Exchange, which in the process turned itself from a member-owned club to a for-profit company with $12 billion in market capital.
And Archipelago is not the only one. 2006 winner Feedburner recently was acquired by Google for about $100 million. Feedburner's immensely successful feed-management technology allowed online publishers to measure their audiences and sell ads in ways never before possible.
These companies have one main thing in common: They realize that investment in innovation is necessary to be successful in the 21st century. However, investment in innovation does not guarantee results, and only a small handful of those "great" ideas end up a success. Innovation involves calculated risk, and previous innovation winners continue to benefit from this risk. Innovation must be grown and embedded in a company's culture, and successful companies realize this.
It's always a pleasure to look back at the remarkable success enjoyed by our former Chicago Innovation Awards winners. I have no doubt this year's honorees will continue to set an even higher bar. To find out more information about the awards and how you can nominate a product or a service, go to www.chicagoinnovationawards.com
Thomas D. Kuczmarski is president of Chicago based innovation and new products consulting firm, Kuczmarski & Associates. Reach him at tkuczmarski@kuczmarski.com.