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Innovation in the company

That is innovation:
An innovation is a new type of solution that is accepted by the target group. This target group, also known as the “market”, is usually the company’s customers, but can also be employees (internal target group). A novel solution is still innovation if it is not successful on the market. Inventions and good ideas are therefore not innovation. Transferring an existing solution to a new market can also be described as an innovation if it is successful in the market. Ultimately, it is always an innovation when a problem is solved for someone that was previously unsolved. Whether the person was aware of the problem or not is irrelevant.

Why innovation is so important
Companies can set themselves apart and differentiate themselves from their competitors through innovation. They can offer solutions that others cannot. This allows you to charge prices that others cannot. Innovation is therefore an important tool for escaping the tough price war between many products that appear identical. Also known as the commodity trap. As the number of competitors grows, innovation becomes all the more important. For many companies, innovation is also important in order to maintain a positive image and attract competent employees in the face of a shortage of skilled workers.

This is how innovation works:
Successful innovation begins with a recognized customer problem (phase 1). A team of highly self-motivated volunteers takes on the topic (phase 2). After a clear understanding of the problem, the market, the technical framework conditions and the wider environment (phase 3), existing solution modules are collected and, if necessary, new ideas are developed (phase 4). The team bundles the large number of ideas into a few promising concepts, creates prototypes and examines the economic viability of the concepts. Assumptions are continuously validated on the market and in the target group before the best concepts are proposed for implementation in the company management (phase 5). The company management decides on the implementation of the best concepts and initiates the implementation phase in which the innovation is introduced to the market and, if necessary, further developed and scaled (phase 6).

There are these 4 types of innovation:
Innovations are differentiated according to what is really new.

Technology innovation. In technology innovation, these are new materials and functionalities that make the previously impossible possible, such as touchscreens, fast-charging batteries or shatterproof glass. Technology innovations are not sold as complete products, but are only part of the respective products.

Product innovation. The product innovation is a new bundle of functionalities that did not previously exist in this combination. Examples include the smartphone, the first fully automatic coffee machine and video streaming platforms. Product innovations do not have to contain new technological solutions, but can be pure recombinations of existing technologies. Product innovations are rare and costly, but hold great business potential.

Service innovation & process innovation: If several parties interact in a new way, this is referred to as service or process innovation. Service innovation is when the customer is involved in these processes. Examples include online payment methods, self-payment insurance and video consultations with doctors. If the customer is not actively involved, it is called process innovation. Examples include automated production processes, digital travel expense reports and sensor-supported machine maintenance.

Business model innovation: If money is earned in a different way, this is referred to as business model innovation. Examples include private car sharing, the sale of compressed air instead of compressors and employee training courses financed by advertising. Business model innovation has only recently been practiced in a structured manner. The topic is therefore in its infancy on the one hand, but also holds great business potential on the other.

That is disruptive innovation:
When an innovation shakes up and disrupts previously established markets and business relationships, this is known as disruptive innovation. The disruption is caused by customers suddenly changing their purchasing and usage behavior and abandoning established providers in favor of other offerings. Examples include AirBnB, Uber and PayPal. A technology can never be disruptive; only the acceptance of a new solution by customers on the market can be disruptive. Business models that generate high margins over a long period of time despite declining customer satisfaction are particularly susceptible to disruption.

Innovative ability

This is how you create a culture of innovation:
Culture is what people do when no one is watching. Culture is therefore directly linked to actions and habits. Like any culture, a culture of innovation is only created by replacing old habits with new ones. A culture of innovation means that innovations that are successful on the market are created out of habit. This culture can only be created by the individual going through the following steps in the ADKAR model:

  1. Awareness: An understanding that innovation is important for the company
  2. Desire: The need to contribute to innovations yourself
  3. Knowledge: Knowing how innovation is created
  4. Ability: The ability to take practical action
  5. Reinforcement: An environment that positively reinforces the new habit

This is how you measure innovation capability:
The easiest way to measure innovative capability is to measure target achievement. This requires a clear definition of the goals a company wants to achieve with innovation. This can be, for example, the share of new products in total sales or the customer’s perception of being the most innovative company in the industry. Without defined innovation targets, the ability to innovate can only be measured using standard characteristics. For example, via the nine fields of action in the innovation system. It measures how well the company is positioned with regard to the following fields of action: innovation culture, innovation project management, innovation strategy, market, expertise, technology, innovative products & services, innovation process and structure & network.

That means thinking innovatively:
Innovative thinkers come up with new solutions that promise success on the market. Three dimensions need to be considered for an innovation to be successful on the market.

  1. Need in the target group: For a successful innovation, there must be an unsolved problem or a need in the market. The target group does not necessarily have to be aware of the need.
  2. Technical feasibility of the solution: A solution idea that is technically feasible in the foreseeable future is also crucial. This also includes the ability to find or devise technically feasible solutions
  3. Profitability for the company: Only what is permanently profitable for a company can be offered on the market in the long term and thus be a market success. Financing, price, market entry and the competitive situation play a decisive role

Thinking innovatively therefore means considering the three dimensions of need, feasibility and cost-effectiveness.

That is error culture:
The way in which errors are viewed in a company and how errors are reacted to is called error culture. We speak of an error culture that promotes innovation when it is customary to regard errors as unavoidable in principle and only harmful to a limited extent, so that the fear of errors does not lead to an inability to act because any risk should be excluded. This habit includes looking at our own mistakes as well as the mistakes of colleagues and customers. Instead, mistakes are seen as an opportunity to learn through trial and error and to gain new insights on the way to successful innovations. Especially in unfamiliar territory, trial and error can lead to insights more quickly than risk-avoiding, holistic planning.

This increases the ability to innovate:
In principle, the ability to innovate is increased by changing behaviors and habits that stand in the way of innovation goals. These hurdles can be found in the nine modes of action of the innovation field. Depending on the company’s objectives and starting position, it is more important, for example, to get a grip on innovation project management, implement a clear innovation strategy or work on the structure and network.

Innovation management

That is innovation management:
Ensuring that innovation is carried out successfully and efficiently at an organizational level and that countermeasures are taken where necessary is known as innovation management. This includes looking at the innovation portfolio as well as reporting to company management, effective target setting and support for individual innovation projects.

That’s what an innovation manager does:
Innovation managers organize the innovation activities in the company and support the innovation goals. A common misconception is that innovation managers develop and implement innovations. Typically, however, this is not the task of the innovation manager. Innovation is created by the specialists in the company, not by the innovation manager. Just as quality is created by the specialists and not by the quality manager.

This is a search field:
A search field describes an industry, a trend, a topic, a target group, a technology or a region in which a company would like to produce innovations in the future. Search field because innovation is often associated with exploration, where customer problems, ideas and innovations can be “found”. Nevertheless, innovation involves a great deal of work that goes far beyond searching, finding and inspiration.

This is a field of innovation:
An innovation field is a large, unsolved customer problem. Unlike in the search field, you no longer need to search in the innovation field. The clear understanding that the customer has a problem that is worth solving allows the structured processing of the future innovation to begin. Typically, an innovation field supports a company over many years and can produce a large number of innovations.

Innovation methods

That is idea management:
Idea management refers to the collection, application and processing of ideas within the company in order to create optimizations or innovations. Idea management has evolved from the company suggestion scheme, where suggestions for improvement are often implemented directly and make work easier for employees. Idea management has not proven itself for the development of innovations.

That is open innovation:
Incorporating ideas for solutions from many sides into the innovation process is known as open innovation. Ideas and contributions come from customers, partner companies, employees from all areas, professional idea developers or the interested public, for example.

That is design thinking:
Design thinking refers to the process of placing the user at the center of innovation development, recognizing their needs and developing, testing and refining solutions in iterative steps. Design thinking consists of a growing number of individual methods, principles and concepts. The active marketing work of international universities and the Design Thinking consultancies founded as a result has led to a high degree of dissemination of Design Thinking. This sometimes gives the impression that design thinking is synonymous with innovation development, although in fact it only covers a small section of the innovation process.

That is TRIZ:
TRIZ is a comprehensive methodology for structured invention and technical problem solving. The Russian acronym TRIZ stands for Theory of Inventive Problem Solving and is mainly used in technology and product innovation. Contrary to popular belief, TRIZ contains hardly any creativity techniques but mainly analytical tools that have been developed from the evaluation of hundreds of thousands of patents. The best-known TRIZ tool is the contradiction matrix, which can be used as a solution template for any technical challenge.

That is co-creation:
The joint development of results within a group of people is called co-creation. Co-creation workshops often focus on developing ideas or solving recognized problems. While open innovation focuses on the participation of otherwise uninvolved groups of people, co-creation is particularly concerned with the simultaneity of work in a workshop format. This contrasts with a division of labor, in which work steps are carried out one after the other or in parallel, but spatially separated and without direct feedback from different people.

FAQ at a glance

About the innovation consultancy TOM SPIKE

Established companies have the day-to-day business well under control. The innovation consultancy TOM SPIKE supports companies that want to create unique, new products and offers and have not done so for many years or are not satisfied with the results.

Innovation efforts often take one to four years throughout the company. Despite enormous efforts, market success is often moderate. This is an important reason why attempts at innovation often lead to frustration and disappointment. Those who know that innovation is a craft and use the right tools effectively save themselves the frustration. TOM SPIKE supports companies that are not in the mood for frustration when it comes to innovation.

Innovation is a craft

Innovation workshops are a great way to create targeted successes to enable and legitimize innovation and create breakthrough results that can never be achieved through individual work and task ping-pong. With the right participants, established workshop formats reliably deliver convincing results.

Of course, innovation workshops are not a panacea for innovation success. Only market success turns an idea into an innovation. And market success requires a lot of work in all areas of the company and on the market. The following questions can be solved particularly well in the workshop format:

  • What does the customer of tomorrow want?
  • What challenge do I really need to work on?
  • What innovation strategy do we want to pursue as a company?
  • How can this customer request be solved technically?

Are you looking for fresh, groundbreaking products, new business models or innovative services? With TOM SPIKE’s innovation workshops, you create targeted ideas, innovation and market success through a unique, structured approach. Don’t wait any longer for an inspiration – book our service packages and benefit from the experience of our innovation consultants.

Our next events

16Apr8:309:00Live webinar: Customer interviews20 minutes for inspiring product innovations through customer interviews

17Sep(Sep 17)9:0020(Sep 20)15:00Master Class: Technology innovationCreating uncompromising solutions, world firsts and patents: Patent-ready ideas, complex problem solving and ingeniously simple development of the next generation of technology.