Today's markets are often extremely competitive, which means companies are increasingly called on to innovate. But what does an SME need to keep pace with the times? From test-and-learn strategies to traditional innovation management, our expert tips will help you find the right approach for your SME.
A lot of start-ups have innovation already bred into their DNA. They have been living in a test-and-learn culture from the very start: an idea is hatched, then developed and tested on the market, and if successful, it is pursued further.
Start-ups such as Winterthur-based company KINASTIC AG, which developed an app to improve employee health, show us how it’s done. They continue to develop their product and incorporate customer feedback directly into the development process. “This is a great opportunity for SMEs to learn about the agile way that start-ups work and how to institute a similar corporate culture,” explains Claudia Bienentreu, Head of Open Innovation at AXA.
SMEs are the backbone of the Swiss economy and in many industries they are already the market leaders. This is why it is so important to learn about innovation. The key word that SMEs hear bandied about whenever this topic pops up is “innovation management.” But what does it actually involve? And is this the right approach for your company? We’ll shed some light on the subject for you.
Innovation management involves any and all measures used to promote innovation at companies. This includes the planning, organization, management and control of the entire innovation process: from ideas through to implementation.
The goal of innovation management is to increase the value of a company. This can be achieved, for example, by launching a new product, optimizing existing services or improving internal processes.
No business is going to turn down continuous value enhancement. “But very few start-ups or SMEs have their own innovation team or innovation officer – nor do they need one,” states Claudia Bienentreu. Keep reading to find out why.
Swiss SMEs do not necessarily need traditional innovation management because they are by nature highly innovative, notes Claudia Bienentreu, “Most SMEs and start-ups have innovation automatically integrated into their product or process development.” This is because “Many small companies have to continually develop their solutions and products just to remain competitive.”
Even if SMEs can already bring the basic requirements for innovation to the table, there is enormous potential for them to better manage innovation within their own company. SMEs that take advantage of this opportunity are able to accelerate their growth or tap new customer segments. But let's take a look at how you can drive innovation in your business.
“Start small,” advises Claudia Bienentreu. “As an SME, i's worthwhile, for instance, to first identify an area you would like to move into and then gather ideas on how to do it.” The direct dialog that comes from workshops or discussions with employees, customers or partners provides valuable insights, and such events can be organized quickly and without much effort. Often you will discover options that can easily be implemented to improve a product or to further develop processes. And what if you find that some bigger changes are needed? “Then it may be worth taking a chance on investing in, say, a new product line or trying out new distribution methods.” Innovation is also about having the courage to try new things.
First, however, you should make space for innovation to grow in your SME. The following five components are especially important:
Just as running a company has its challenges, so too does innovation management. Often great ideas come to nothing because the processes involved are too clunky or there just weren’t enough resources. “To avoid this, you need to establish clear processes and responsibilities. And the timeline and budget also have to be clearly defined so that your team has not only the roadmap, but also the resources it needs for innovation,” says Claudia Bienentreu.
Another pitfall to watch out for is clinging to unsuitable ideas. To prevent this, you need to have a constant flow of new inspiration and the courage to toss out ideas that are not so feasible. But the focus should always remain on the target group, she says: “You must know the exact needs of your customers and actively include them in the innovation process.”
And lastly, SMEs also need to understand they don’t have to master every challenge alone. “SMEs should absolutely take advantage of offers from government agencies or other organizations that are specifically aimed at supporting innovation in SMEs and which provide the corresponding financing for these opportunities.” Claudia Bienentreu also recommends creating synergies by teaming up with universities or start-ups. “We do this at AXA too. One example is the successful collaboration between AXA and KINASTIC AG, which helps our customers promote employee health.”
And remember: Every company has what it takes to be innovative.