In the financial services sector at least, there’s no obvious link between innovation and financial performance, according to a new survey of journalists released by GfK Roper Public Affairs & Media and global public relations firm Manning Selvage & Lee. The study, which asked 151 journalists questions about financial services industry leaders in performance and innovation, was part of Roper’s annual Media Perspectives of Financial Journalists survey.
According to the survey, Goldman Sachs is the clear leader in expected financial performance. When asked what financial services company is most likely to produce the greatest returns to its shareholders in the next five years, 13 percent of those polled named Goldman Sachs; nine percent named Citibank/Citigroup, and six percent said Fidelity Investments. Further down on the list were Bank of America (5 percent), Charles Schwab (4 percent) and Wells Fargo (3 percent).
But when asked to name financial services firms most likely to create the next major innovation in the industry, the answers were quite different, almost in reverse order: Fidelity Investments topped the list at 13 percent of respondents; Charles Schwab at 10 percent, and Citibank/Citicorp at 6 percent. Goldman, the firm with the best perceived financial performance, was at the bottom of the top five (3 percent).
“These results indicate that journalists covering financial services do not see a direct correlation between innovation and performance,” says Peter Harris, director of MS&L’s corporate practice in New York. “They also suggest that the pay-out for innovation may not be immediate financial gain, but rather a longer-term investment for the future of the firm.”
According to those polled, the companies expected to create the next major innovation will do so based on a history of creating new products (17 percent), a strong, assertive, flexible management style (15 percent), and a culture of being forward-thinking and taking risks (13 percent). Other top answers included being client-centric and responsive to clients’ needs (6 percent) and financial stability providing the ability to invest in new innovations (also 6 percent).
Strong performers are those that are well managed and have aggressive management (12 percent), have a high growth rate or a history of fast growth (12 percent) and a high return on capital (9 percent).
According to Manning, a review of the journalists’ responses suggest that strong financial performers focus on the company—its growth and global scope—while innovative companies focus on the customer.