BRAIN-Teaser: Successful innovation
Innovation has always been a key factor for entrepreneurial success, but in today’s market environment its importance has greatly increased. Even those who do not deal with the Kondratiew cycles will notice that we are in a phase of economic upheaval. The growing dynamics we are confronted with, requires upmost attention to the issue.
From empirical evidence, we like to introduce you 12 factors for improving the innovation performance of your enterprise. To reflect about the relevance and status of the single factors in your organization is certainly a well invested time.
1) Focus on customer benefit:
The most important landmark of a business is the benefit it provides to its customers. It’s the only raison d’être of a company. The customer benefit of an innovation endeavor must constantly be checked: What is the outstanding advantage we offer our customers with the new product or service?
2) Engage the team:
An innovation counts only when the idea or invention is successfully established in the market. It is therefore advisable to involve the implementing team at an early stage and ensure a critical mass for rapid implementation.
3) Pursue the right goals:
Proof of the innovation success is first and foremost the adoption rate. Aim for a significant market position – at least “Top 3” in the relevant market. Profit should be secondary in the start up phase.
4) Separate the old from the new:
New endeavors can cannibalize old products or services and also compete for the attention of the squad which is often rooted in the old. Do your organization, your team and “your” innovation a favor and set up an independent unit for the new initiative with a fully responsible management team.
5) Measure also positive deviations:
Factors that were not “on the radar” are often decisive for the success of an innovation. Ensure that both negative and positive deviations are captured in Controlling. The analysis of positive deviances can provide important indications on strengths.
6) Allow mistakes:
Whenever something new is tried, “mistakes” happen in some form or another. The success rate for market launches of new offerings is below 10%. Employees appointed to innovation should be evaluated and rewarded accordingly.
7) Test and improve quickly:
In the sense of “design thinking”, ideas should be realized, tested on the customer, improved and introduced quickly (or be stopped at an early stage). The “Minimal Viable Product” (MVP) approach leads swiftly to a prototype with the minimal performance characteristics to be presented to the customer.
8) Focus on a few good ideas:
Concentration of forces is crucial for success. In addition to financial resources, what is particularly needed are the best people and the highest management attention. The required capacities are limited and quickly exhausted in every company.
9) Review business model:
A good product or service is important, but it must lead to sustainable financial success. Don’t just think about the “classic” sale of your offering. Other business models could sometimes be much more promising.
10) Openness towards partners:
Whether in the development, marketing or delivery of services – the involvement of third parties can offer new insights and access to other resources or markets. It may even be possible to offer an entire eco-system.
11) Secure the so-called “second wave”:
Good products or services are quickly copied. Aim from the very beginning for a staggered extension of the range of services. This gives you a competitive edge and keeps your offering in the spotlight.
12) Consistent implementation:
Can be taken for granted, but this is exactly where many innovation projects fail. Ensure the highest management attention on important innovations and assign them to your best employees.
Successful innovation remains one of the great challenges. However, we are convinced that by taking these factors into account, the probability of success and the motivation of those involved can be significantly increased.
We hope to have provided you with fruitful ideas and look forward to any feedback on our management letter.
Zurich, July 24, 2018
Ivan Beldi, lic. oec. HSG
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