Innovation: Everyone wants it, but what really matters?

Everyone’s talking about them: innovations. In corporate tenders, in company presentations, and even in the battle for top talent. That’s why any company that wants to be considered cutting-edge is only too happy to call itself innovative. Any product manager who wants to make a name for themselves must come up with innovations. But how do you do that? And just how innovative does it really have to be?

In this article, we’d like to show what makes innovation tick and how it can be successfully implemented within corporations.

Characteristics of innovations

Innovation is defined as novel, advanced solutions to a specific problem, which can take the form of products and services as well as processes and procedures. The key point here is that a solution labeled as innovative does not necessarily have to be new: according to Professor Fichter of the Borderstep Institute for Innovation and Sustainability, it is sufficient if it is perceived as fundamentally new.

But how do you ensure that innovations are perceived as fundamentally new?

Disruptive vs. incremental innovations

Disruptive innovations are considered the pinnacle of innovation. They shake up the market dramatically, disrupt the existing balance of power, and require a completely new way of thinking. 3D printing, for example, is rapidly changing the way products are designed and manufactured. But if you take a closer look, you’ll come to the same conclusion here: It’s not always the very first players in the market who achieve resounding success with an idea, a technology, or a process. The key factors driving disruption are often:

• A novel combination of existing elements: Netflix has combined the concept of the traditional video rental store with online streaming. In addition, affordable prices, HD quality, and the new ability to watch TV shows anytime, anywhere have all contributed to this disruptive innovation.
• A shift in the area of application: With the MP3 player, it wasn’t the format itself that was perceived as disruptive, but rather its integration into a small piece of hardware, the MP3 player itself: it’s small, handy, and portable.
• An extremely high standard of quality: When the first generation of the iPhone was launched, no compromises were made on quality in terms of user guidance, user experience, scalability, performance, etc. Instead, the scope was narrowed to get the product to market faster. For example, there was neither a copy/paste feature nor the ability for users to install software themselves.

Incremental innovations are the stepchildren of innovation, since they are “merely” changes or modifications to existing products, services, or technologies. In other words: Incremental innovations involve optimizations, after all, the goal isn’t just to change something, but above all to improve it. Optimization can take many forms: cutting costs, boosting quality, adding new features, and eliminating unnecessary baggage. Numerous examples demonstrate that this strategy is extremely successful for companies.

• Digitizing existing processes: We designed a digital customer center for Sparkassen DirektVersicherung. All processes were already in place, the only difference: greater autonomy for customers and a focus on the core business thanks to the digital customer center.
• Developing new services: Provinzial Rheinland has developed a new service called “MeinZuhause und ich,” a platform for connecting customers with tradespeople. The focus is on user satisfaction, which is essential to the financial success of any service.
• Improving internal processes: By implementing a business management system, we were able to facilitate internal collaboration for one of our clients and streamline processes and feedback cycles.

How can innovation succeed?

Whether disruptive or incremental, successful innovations have one thing in common: They aren’t developed behind closed doors as an end in themselves for the company, but are validated early on and regularly with current or potential users.

Whether it happens in a trendy lab or in a standard conference room doesn’t really matter. It’s about taking action. In some cases, new, fresh surroundings can help you work on a problem with a fresh perspective. When it comes to improvements or enhancements to an existing product, it may be easier within large corporations to implement these internally and gain supporters. At its core, however, the right approach and an open mindset are what matter, not the environment. This holds true for both incremental and disruptive innovation.

• Identify and understand the problem.
  Innovation workshops, just like product development, are driven by ideas. However, users aren’t satisfied with ideas; they want solutions to specific problems. So: Do your research, talk to people, and gather input.
• Good enough for now
  Things are always getting better. Perfection costs not only money, but above all time. And time is scarce, especially when it comes to innovation. That’s why you should validate your hypotheses sooner rather than later and learn from the process. By the way, a “no” from a potential user is just as valuable as a “yes.”
• Cross-functional collaboration:
  Cross-functional teams help identify challenges early on and foster problem-solving thinking from diverse perspectives.
• Staying the course and showing
  perseverance Product development isn’t just a matter of good ideas: it’s also incredibly demanding. A lack of perseverance, poor stakeholder management, insufficient communication, and significant headwinds are just a few of the factors that cause some projects to fail.

There are other organizational and structural factors that foster innovation:

• Quick, well-defined decisions
  Innovation is all about speed. Most industries are highly competitive, so developing certain product features is a race against time. That’s why it’s important to make decisions quickly and define in advance who makes which decisions and within what timeframe.
• Creating
  freedom to act: Giving employees the freedom to act is crucial to a project’s success, as restrictive guidelines can lead to frustration and demotivation.
• Technical independence:
  Interfaces with an outdated IT landscape can slow down projects. Technical independence can help bring the product to market faster.

Conclusion: Customer focus is fundamental to innovation

Even if innovations are perceived as fundamentally new, this doesn’t mean that companies have to focus on disruptive innovations. Our experience shows that if you can create added value for users, you’ll be successful. Small amounts of added value can be just as satisfying as large ones, for both the user and the company.