Innovation Management

Brief overview

"Innovation" comes from the Latin word "innovare" and stands for to renew. From an economic point of view, innovation is something new that brings a benefit to an organization or and to society. Innovation is important because the needs of customers and companies change. New customer needs arise and others simply fall away. Even highly regulated industries such as insurance are subject to change. New customer needs and business opportunities arise every day, and we have to respond to them in order to remain successful in the future.

What has changed?

The understanding of innovation management is still strongly influenced by process-oriented approaches today. Not only the conditions, but also innovation management itself has changed significantly. It used to be based on a linear, waterfall-like innovation process - one stage after the next. This lasted one, two or three years, in some industries considerably longer. In the process, what was to come out at the end was determined at the beginning. 

What is the core issue?

Changing markets, new competition, disruption, digitalization, etc. make it necessary to develop a culture of innovation. Every company that has a successful future ahead of it will invest in innovation management. The future is coming and either a company is successful in it or not.

In addition to frequently mentioned factors such as increasing competitiveness and higher growth, there is one overriding goal: to make the company fit for the future and to operate successfully in the market with rapidly growing competition.

What is the benefit for you?

We develop answers with you and for you to the following questions: How can innovative capacity be increased? How can you generate a sustainable competitive advantage from your innovation culture? Which methods can I apply? How do I develop a culture that promotes innovation in my company and my team? Why is it so important for companies to further develop their innovation management? Today, innovation management should be an "exploratory process." In innovation management, companies should both uncover new opportunities by developing knowledge that is not yet known (exploration), but also exploit existing opportunities by using existing knowledge (exploitation). 

Innovation is not primarily about products, but about people. Products are only ever the result of innovation by people and the outcome of a holistic innovation process.

What it takes is curiosity, the right balance between autonomy and organization, and the necessary pinch of risk-taking. Literally translated, innovation means "innovation" or "renewal. In colloquial language, the term is used for new ideas or inventions and for their commercial implementation. Especially in marketing, many things are touted as innovative. A clear distinction between an idea and innovation is often ignored. An idea only becomes an innovation when it is practically implemented in new products, services or processes and successfully applied in the market.

This can be distilled to four core themes:

  • Customer focus: Aligning products with the needs of customers
  • Competence diversity: Use of all available competences in the company and in the network
  • Freedom and courage: creating a creative environment and the framework conditions
  • Alignment with "megatrends": orientation to strengths of the company, industry or market opportunity

Innovations bring real benefits that are perceived by customers. They solve real problems and satisfy needs. You can measure this simply by the extent to which customers are willing to pay for the service.

Why does who pay how much for what - and how do we solve this? This requires five elements that must be answered. Only then will they generate sales, profits and, above all, satisfied customers, and thus be considered a successful innovation:

  • Problems and needs (why is paid)
  • Target customer (who pays)
  • Customer value and service offering (what is paid for)
  • Revenue model (how much is paid and how)
  • Herstellung bzw. Leistungserbringung (wie es gelöst wird)

In the long term, growth and prosperity are only possible through new products and processes that provide additional benefits, i.e. are innovative. Developing such products and processes is one of the key challenges for companies - and a decisive competitive factor.

It is crucial for the innovative strength of an organization that managers foster the inventive and entrepreneurial spirit of their employees and encourage them to be creative and think outside the box. So innovation is not just about having the right corporate strategy, but above all about having the right culture.

In an empirical study, McKinsey identified various characteristics that particularly innovative companies have in common. The central success factor is quickly identified: people. If companies want to be innovative, they must offer their employees an environment in which they can engage and develop. They must create a culture that is both challenging and appreciative, one that motivates people to be curious, to come up with ideas and to put them into practice. First of all, this requires a fundamentally open attitude toward new approaches and ways of thinking. In practice, this means supporting new ideas with resources, even if they appear risky at first glance.

However, companies must not only focus on the creation phase of innovations, but must also deal with results in the right way. The first thing that is important for motivating employees is that commitment is rewarded regardless of what the end result is. Innovation projects fail - and quite often. Projects that do not achieve the hoped-for results should not be seen as defeats. After all, being curious and breaking new ground always means taking a risk. What is needed is a constructive approach to failures and a genuine culture of error in which failures are understood as a gain in knowledge and employees are always encouraged to take calculated risks.

The right corporate culture is crucial, but alone does not make an innovative company. The right strategy also matters. For innovative companies, growth from self-developed products is an integral part of their strategy. Successful innovators also succeed in transforming ideas into viable business models.

This brings us to the next success factor for innovation: Collaboration - both internal and external. On the one hand, companies must live a culture of togetherness and knowledge sharing. At the same time, their own innovation processes must be open to impulses from outside.

Thus, the following applies to a successful, holistic innovation process,
from idea generation through so-called incubation to the establishment of viable business models: Intuition, collaboration, framework, courage and drive in the implementation, from the idea to the product.

Thus, the following applies to a successful, holistic innovation process,
from idea generation through so-called incubation to the establishment of viable business models: Intuition, collaboration, framework, courage and drive in the implementation, from the idea to the product.

Common tools for the innovation process:

  • Roadmapping: Identify technological potentials & market trends at an early stage and communicate them successfully within the company. Added value: Integrated market / product and technology view
  • Creative ideas workshop: breaking through thought patterns - finding new ideas. Added value: Start the innovation process, generate ideas for new products and services.
  • Trend and innovation radar: Identification, monitoring and evaluation of technologies. Optimization of own value chains in the company. Added value: Identification, observation and evaluation of technologies.
  • Design thinking: Systematic approach to complex issues. User wishes and needs as well as user-oriented invention are at the center of the process.
    Added value: solving complex products & services with a customer-centric perspective