As we look to 2016, we see continual advancements in mobile computing, web hosting and distributed data, wearables, security. The early-stage startup environment has never been more invigorated. SaaS companies like Slack are both enabling small business and penetrating the Enterprise like never before. Distributed computing has matured and continues to reinvent itself each year. Cyber security and threat management seem at the tip of a monumental iceberg. Employee and personal wellness are trending topics.

We feel the changing tides of innovation all around us, with every social update, every Git commit, every pedometer step, every drone flight. For startups, innovation comes quite naturally; a team has a new product or a clever new way to exploit holes in an existing market. In the Enterprise, “innovation” is the ultimate conceptual differentiator. It might be one of the most popular Enterprise buzzwords ever, albeit very nebulous. When we talk about innovation internally, or if we want to understand innovation at a pragmatic level, it is helpful to be more specific about where we see companies innovating.

Our nominations for the most innovative companies for 2016 contain models of a new standard that we call the 'New Enterprise.' At Formula Partners, we research and analyze companies who are innovating across a unique matrix of components, both internal and external, holistic and sustainable innovation across an organization, 360º innovation.

The main innovation components that we analyze are:

  • Cultural Wellness
  • Process
  • Product & Technology
  • Sales & Marketing

We have selected five companies that will lead innovation in each of these categories for 2016, with select honorable mentions that almost made our list.

1. Morning Star Tomato

Employee wellness and personnel empowerment have been a persistent narrative throughout our capitalist history. Whether through civil justice means or organic evolution, we are always looking to make life more rewarding. Connected and distributed technologies have slowly helped the millenial generation question all the existing paradigms of 'being at work.' However, long before our cadre of coffee-shop workers and Google Hangout users, many have dared to question the 9-5 status quo.

Morning Star Tomato is one such company. Founded in 1970 on the principle of self-management , Morning Star is said to lack any traditional hierarchical organization structure, with peer agreement and negotiation at the core of all important decisions. Employees are expected to apply the same system of self-reliance and accountability from their personal lives in their job.

Morning Star's Radical Approach to Management

You hire the right people, you get the right person in the job, you don't need to micro-manage them. There is no micro-managing here. It's really a breath of fresh air. [...] Politics, or the absence thereof with Morningstar, is probably the most interesting thing that people notice almost immediately.

An excerpt from the Self Management Institue best explains the concept: "Self-Management, simply stated, is an organizational model wherein the traditional functions of a manager (planning, coordinating, controlling, staffing and directing) are pushed out to all participants in the organization instead of just to a select few. Each member of the organization is personally responsible for forging their own personal relationships, planning their own work, coordinating their actions with other members, acquiring requisite resources to accomplish their mission, and for taking corrective action with respect to other members when needed."

With such an innovative business and management culture, Morning Star Tomato is a huge success story. We think that more and more companies will look to Morning Star for inspiration in 2016.

2. Github

Github has single-handedly changed the way people build and deploy software through a dedication to transparency, accountability, and automation. Most importantly, Github's principles and platform allow for unprecedented employee freedom at a software company.

At Formula Partners, we are strong believers that automation, tooling and process control are prerequisite for employee wellness. Perhaps no contemporary company illustrates this better than Github. Like Google and AWS before it, Github built products to optimize their own processes and ended up shifting the dynamics of an entire industry segment.

Inside Github "Flexible Hours"

The tools we use only make it easier to work in this fashion and to be flexible. [...] People here love what they do. Because they love what they do, they want to do the best job. We are trusted here to do our jobs. [...] They believe in us. We all believe in each other. I've never worked at a place that was even close to something like this.

Most importantly, as noted in the above video, Github's process innovation and automation directly influence employee wellness and freedom. It goes to figure that talented, motivated and trusted people build great software products when they have the right support environment. Github is now rumored to have near 10 million users and valued near $2B .

3. MakerBot

3D printing has come a long way in the last decade. Prototypes have now been seen with human tissues, fabrics, electronics, metals, and so on. Like the low-power robotics and drone communities, 3D printing is largely divided between large Enterprises and pure hobbyists. While 3D printing has yet to catch the collective mainstream imagination, we are already seeing the incredibly rich application space which seems to be limitless.

Because of the hobbyist roots of the nascent industry, we are seeing a collaborative 'sharing' environment similar to that of the open source software community. MakerBot is much the logical commercial extension of RepRap and other 3D projects.

MakerBot Replicator Mini 3D MakerBot Replicator Mini 3D

In mid 2014, MakerBot released their Replicator Mini 3D printer. This can be considered the most polished and sophisticated small commercial 3D printer to date. Formula Partners is excited to see the growth of the 3D printing space in 2016. We expect to see more innovation and mainstream adoption.

4. IFTTT

Wait a second, what does a hosted automation recipe application have to do with sales & marketing innovation? IFTTT (If This, Then That) is the poor man's SalesForce. IFTTT's job is to faciliate cooperation between the many open software applications of the world. The modern marketer is presented with the challenge of aggregating and coordinating a syncopated cooperation between up to ten systems every day. Emails, social posts to four different platforms, conversation monitoring, analytics, reporting, the list goes on an on.

IFTTT IFTTT Recipes

IFTTT allows users to create and share automation and event-driven 'recipes,' connecting an incredible number of platforms together. Formula Partners has been following the growth of IFTTT very closely since its launch in 2011. They have achieved incredible breadth and market penetration in a short time. We expect this growth to continue into 2016.

5. Google

While everyone loves an underdog, sometimes the big cats continue to push the envelope. Google is working on some very exciting and cutting edge technologies for the wearables segment. While Google made waves with the release of the Google Glass prototype in 2013, their innovation in the wearables space continues far beyond the heads up display (HUD).

Everyone remembers the riveting gestural user interfaces in the movie Minority Report (2002). As we look to 2016, we see that reality now knocking on our front door, instead of sending us postcards from the distant future.

Minority Report 2002 Minority Report (2002)

Google has two initiatives in the wearable technology space that could have fascinating applications.

Project Jacquard

The first is a collaboration with Levi’s called Project Jacquard. This comes in a segment that Formula Partners has been following and speculating on for some time. We call this segment ‘Digital Fabric.’

Levi’s is working with Google to weave pressure-sensitive, conductive fabric into ordinary blends.

Google Project Jacquard Google x Levi's Project Jacquard

Google Project Jacquard Google x Levi's Project Jacquard

The possibilities of this technology are endless. Personal device control from clothing, contact sports data, health and wellness data, industry specific device control and robotics, the list can go on and on.

Project Soli

Project Soli is a ‘radar’ technology for gestural identification. Imagine pointing, clicking, swiping and controlling a device with just a hand gesture. Times are changing indeed.

Google Project Soli Google Project Soli

Google Project Soli Google Project Soli

Honorable Mentions

With so many companies doing great things for 2016, here are some of our honorable mentions:

New Belgium Brewing

New Belgium has quietly become the eight-largest brewery in the United States. What makes New Belgium so special is that their management practices are clearly 'employee first,' with trust, risk sharing and transparency a few of its guiding principles. Not only is New Belgium a wholly owned employee company (ESOP), they also practice Open Book Management, a practice that not only opens the corporate books, but also teaches employees how to analyze the books.

While New Belgium has been on a path toward a full ESOP since 2000, the final 59% of the company was sold to the employees in 2013. New Belgium is a proud example that companies can become wildly successful while innovating for the cultural wellness of its constituents.

The External Environment and Organizational Culture at New Belgium Brewery

Segment.io

For the everyday marketer and business analyst, marketing attribution and analytics is a complicated and cumbersome space. Managing user attribution events is generally a nightmare. Segment.io "is the single hub to collect, manage and route your customer analytics data."

Segment.io Segment.io Integrations

Segment.io Segment.io Dataflow

Like Apigee or Mashery serve as routing filters for API requests and related data, Segment.io can be thought of as the routing filter for all customer behavior event data.

Amazon Fulfillment

What we are seeing with Amazon's logistics and fulfillment services is nothing short of amazing. After it's acquisition of Kiva Systems (the logistics robotics company) in 2014, Amazon continues to shift the mechanics and expectations for the entire e-commerce industry.

With their best-price e-commerce marketplace strategy and Prime second-day standard shipping service, Amazon continues to send shockwaves through an industry that originally grew from brick-and-mortar retail. Amazon is single-handedly subsidizing this shift in e-commerce and logistics at the expense of all other players.

CNET News - Meet the robots that make Amazon even faster

Amazon is slowly defining the new 'standard' for e-commerce pricing and fulfillment. Perhaps only ShipWire has approached the industry with a similarly strong customer value proposition, although ShipWire caters more to the mid-level e-retailer as opposed to the end customer.