How often do you hear the buzzwords change and disrupt your everyday business? These are severe factors in today’s world when looking at corporate strategy. Entire industries and their technologies are developing rapidly and have to adapt to social, cultural and economic changes to continue to exist. Above all, the global corona pandemic has shown companies how flexible their business models have to be to adapt to new user behavior as quickly as possible.
However, digitization continues to be a challenge for some companies and entire industries. Established processes, which have often proven themselves over decades, must be fundamentally rethought. To drive this entrepreneurial change, Innovation management helps to improve products, services and business models proactively, to make them sustainable and, in particular, to remain competitive. But what exactly is innovation management? What are the advantages? And how do you establish a culture of innovation in your own company?
Innovation As A Driver Of The Economy And Corporate Culture
Every company strives for lasting success, both economically and personally. However, even market leaders have sometimes overslept, rethinking their business models. A prominent example of this is Kodak. The world-famous company for photographic equipment had overslept interpreting the signs of digitization in a timely and consistent manner. The result: a slump in the stock market, the dismissal of numerous employees and the complete abandonment of the former core business with the sale of photo film production. Although there are well-known examples like this, it is surprising that many German companies are still closed to change. Why is that? As long as a company has a profitable business model, people are reluctant to venture into new products and business models.
The change or complete conversion of the corporate strategy involves many individual steps that require courage. Unfortunately, in Germany, there is still a profound fear of failure in many companies. This fear is often associated with loss among German decision-makers. This cultural mindset ensures that innovation management in Germany is still a relatively new phenomenon that is slowly but steadily gaining ground in various industries. This fear is often associated with failure among German decision-makers. This cultural mindset ensures that innovation management in Germany is still a relatively new phenomenon that is slowly but steadily gaining ground in various industries. This fear is often associated with failure among German decision-makers. This cultural mindset ensures that innovation management in Germany is still a relatively new phenomenon that is slowly but steadily gaining ground in various industries.
In addition to the economic factors, promoting innovation also positively affects employee satisfaction and retention. Employees in a sustainable company want to develop further, contribute ideas and have the freedom to act entrepreneurially. If they cannot exploit their potential or if the company structures do not offer any opportunities for professional development, a job change is an obvious choice for many—a fatal scenario gave the current shortage of skilled workers in many German industries. In innovation, large companies, in particular, have to prove themselves to new players.
For start-ups, having their innovation department usually makes little sense from a budget perspective; instead, the focus should be on building a stable core business, which must be forward-looking. On the other hand, large companies have to create internal structures linked to budget and resources to be able to implement innovation management credibly and actively. With the following tips, we show how you can establish a culture of innovation in your own company:
Creating Formats And Spaces For Innovation
Innovation management consists of three pillars—the first deals with brainstorming or generating ideas. The main goal is that thoughts and impulses for your problems and those of your target group are generated early. The existing knowledge and experience in your own company should be fully exploited. The project members need to be able to create new ideas through various formats. This also means taking them by the hand, taking individual strengths into account and rewarding creative and cross-industry ideas.
For this, it is essential to think outside the box. This also includes getting to know new tools and formats within innovation management. A “lean canvas” or rapid prototyping can help to structure an idea and check it for completeness. Even the team with new technologies that are not currently used in the respective industry, Bringing them into contact can reveal great potential. For example, virtual reality, quantum computing or autonomous driving can provide new food for thought in the financial sector. The linking of different industries and business areas to discover synergy potential should not be neglected. Constant observation of what the market offers, what trends are emerging and what can be applied to your department or company must be part of everyday innovation management.
Based on these new impulses, workshops and tools can then be offered that allow employees to search for innovative solutions. Depending on the size and complexity of the problem, the ideas can be developed by individuals or larger project teams. Large companies and corporations can think one step further and introduce one or more innovation days per year for these formats, in which all or at least a large part of the employees are involved.
If you want to ensure innovation in the long term, you should set up a permanent screening of the market and its development in the form of an “innovation radar”. This analyzes and observes new ideas and checks how close or far they are to the market and their development stage, i.e. whether they are still in research or already in product development. The radar can be a purchased or internally developed solution. In in-house development, employees not only deal with innovations selectively but permanently. In this way, you gain inspiration from outside and at the same time create a radar that is precisely tailored to your own company and its target group.
In recent years, what has also proven itself is the cooperation between large companies and start-ups. Both parties can meet, learn from and benefit from hackathons or accelerator programs. This pays off, mainly when there is a cross-industry focus. The start-ups bring fresh, creative ideas and new perspectives because they are constantly trying out new things at high speed. Crucial to the success of such collaboration with young companies is that they are given a great deal of trust and that there is enough freedom for creative growth.
In contrast, larger companies bring more capital, a large existing customer base and broader process and regulatory expertise to support their new partners. At such formats and events, they discover investment opportunities and unique solutions for their target group’s pain points. It pays to question your business model boldly, even as an established player, and confront new ideas. It offers the chance to discover real innovation potential, outmaneuver competitors, and take a leading market position in the long term, instead of letting your product overtake you. It pays to question your business model boldly, even as an established player, and confront new ideas.
It offers the chance to discover real innovation potential, outmaneuver competitors, and take a leading market position in the long term, instead of letting your product overtake you. It pays to question your business model boldly, even as an established player, and confront new ideas. It offers the chance to discover real innovation potential, outmaneuver competitors, and take a leading market position in the long term, instead of letting your product overtake you.
An Idea Does Not Mean Innovation
The crux of innovation management is the evaluation and selection of new ideas. Because not every idea has the potential to become a real innovation. Innovation means an added value for customers and the company, which is ultimately reflected positively in sales. To determine whether an idea has the potential for innovation, precise analysis and evaluation are required – the second pillar of innovation management. The collected impulses must be clustered and evaluated. To evaluate the ideas, employees and customers should be involved right from the start. The success of innovation mainly depends on the customers. These provide information about
Next, a prototype can make the innovative idea more tangible and enable initial contact with the target group. A very early prototype is particularly helpful, for example, a preliminary, incomplete drawing on paper. Because this allows the problem to be validated again from the customer’s point of view and will enable customers to design the idea themselves and think ahead instead of concentrating on individual, already mature features, this honest and extensive feedback is helpful to develop the full potential of the concept and steer it in the right direction. From the company’s point of view, the project staff must make this first direct contact because they can directly incorporate the customer’s ideas into the future design. Instead of just including the evaluations of a market research institute, customer opinions are recorded now and enrich the project with real emotions and customer-oriented solutions instead of pure data and facts on paper.
I Am Continually Thinking Ahead With Innovation
If the idea has been evaluated positively, the last step is the concrete implementation. This requires full backing from management. This means making mistakes when looking for innovations and learning from them because essential conclusions can also be drawn from every failed project. This implements an open error culture in your own company.
Employees should be encouraged to try new things and die if necessary, instead of continuing to fight resource-intensively for a particular idea to be accepted by the target group. Not every idea guarantees success; out of 10 reasonable solutions, only one might be implemented. This requires a large amount of acceptance, tolerance and trust on the company’s part. The innovation team must not be questioned after a failed idea; instead, clear goals must be defined from the start, leaving room for failure and learning experiences. A spin-off can also be used to secure these freedoms.
It is also essential that the results are made visible internally and externally. Then positive examples will also ensure that innovation culture in the company is taken seriously, is tangible and actively lived. Companies should ensure that innovation management is practised continuously and that ideas are constantly generated and further developed because digitization and the pandemic have shown us that it is no longer possible for companies to stand still and rest. To keep its finger on the pulse and to be able to offer customers modern products that meet their needs, a company must always think two steps ahead and be prepared for all eventualities.
To establish a corresponding innovation culture that helps precisely with this, the following five tips can be observed:
1) At the beginning, every company and decision-maker should be clear about the goal of innovation management. What expectations does management have? What budget and other resources such as capital, tools and networks can be made available to the team? What problems need to be solved.
2) There is no golden mean in innovation management, no “one size fits all” model. Instead, each company must find the right tools, methods, and formats based on its own goals.
3) Innovation does not happen by itself. The teams have to be supported, sometimes taken by the hand and introduced to the topics. Presenting a few initial starting points and steps provides inspiration and sparks discussion. Appropriate formats help employees promote innovative ideas and broaden their perspective beyond day-to-day business.
4) In innovation management, the target group should never be lost sight of. Accordingly, the customer perspective should always form the basis for every new product and service. Regular customer feedback must constantly flow into the product design.
5) Senior management’s genuine commitment and commitment provides the foundation for success. You have to be enthusiastic about the topic. This requires a necessary error culture and openness to new ideas, even if they challenge or cannibalize your business model.
Also Read: Digitization & Companies: The Transformation To Build An Online Business
