Day 0 – Innovation needs support

… and you too. 

Generally, we often suffer from the fact that important and good ideas get lost in our everyday lives. This is applicable in our personal lives as well as in business. In the rhythm of our everyday life with its demands, there is often no time, and above all no attention, for the different, for the unusual, for the confusing, for the wild, for change or even for the innovative.

Today is day zero. The day before everything starts. The goal today is to prevent the exercises and the activities of this program that are meant to inspire you from being forgotten in your everyday life as well.   

Exercise

  1. Look around in your community for a mentor for the 8 days of this program. Perhaps look around for someone you consider innovative. Look for an open-minded mentor in your professional, educational or private environment. Being open to innovation should be an important trait of your mentor, because you want to experience support, not have to convince your mentor yourself. 
  2. Ask your chosen mentor to check in with you on a regular basis (perhaps even daily) about your experiences and activities. From then on always take this opportunity to tell your mentor about your experiences, your insights, or your ideas.

Remark

You do not only need a mentor for support.

We all know that we always need reminders, too. Especially when our days are full and eventful anyway. A good reminder can be a notebook that you can use for the documentation of your exercises. Scribble, sketch, and write down so you can remember your ideas and inspirations later on.

The notebook should become your daily companion. Put it next to your bed. If you have an inspiration at night, it will be ready so that you don’t forget it again!


Why is innovation actually so important?

A look at the reality of successful companies shows that they are able to offer their customers new, better and/or cheaper goods and services than their competitors. The competitiveness of companies thus has a relative dimension, which is expressed in comparison to their competitors. However, competitiveness also has an absolute dimension, which can be seen in the existence of demand for the new goods or services.

In the recent past, the role of innovation for the successful management of companies has gained additional importance. The growing importance of innovation can be illustrated by four external developments that affect corporate innovation processes (Gerybadze 2004; Wheelwright, Clark, 1992):

  1. First, new knowledge is continuously generated on the scientific and technological aspects, creating new opportunities for entrepreneurial innovation processes.
  2. On the demand side, there is an increasing change in customer needs and requirements, which manifests itself in the demand for better and more differentiated problem solutions. This is generally accompanied by a corresponding willingness to pay by the customers. 
  3. Growing competitive intensity and increasing globalization mean that companies will have to differentiate themselves through innovations in the medium term.
  4. The shortening of product life cycles is putting additional pressure on companies’ innovation activities.

In terms of society as a whole, innovations are always important when problems arise that cannot be solved with our old behaviour, i.e. when we are confronted with situations that require something new. Examples would be the spread of the coronavirus, environmental pollution, and economic inequality.

Let us first focus here on the corporate level. With successful innovation activities, companies aim to improve their national or international competitiveness against the backdrop of these developments. Indeed, a number of positive effects result for companies from successful innovation activities:

  1. First of all, successful innovators achieve higher profits in the long term than their non-innovative competitors. The positive earnings situation is also less dependent on seasonal, sectoral or economic fluctuations (Geroski et al. 2003).
  2. Innovative companies tend to have a stronger international orientation and thus higher exports than non-innovative companies (Bleany and Wakelin 2002). The successful introduction of new products and services and the ongoing optimization of production processes through process innovations are therefore essential for corporate success in an economy that is becoming increasingly internationalized. 
  3. Moreover, compared to non-innovative companies, those with successful innovation activities are found to have higher survival rates (Cefis and Marsili 2006).
  4. Innovation activities also affect the credit ratings of companies. Moreover, innovative firms have on average better credit ratings and higher market capitalization compared to similar non-innovative firms (Hall, 2000 and Czarnitzki and Kraft, 2004, respectively).
  5. Successfully innovating companies thus also improve the image that customers, shareholders and stakeholders have of the company (Kunz, Schmitt and Meyer 2011).

These measurable benefits are the result of innovations providing different mechanisms to unlock strategic advantages; these are briefly outlined in the next figure.

Figure
MechanismStrategic advantageExample
Novelty of the product (good or service)Competitors are unable to launch similar products on the marketIntroduction of the world’s first … Walkman, dishwasher, telephone, …
New production processProduction is faster, cheaper, more flexible, safer than the competitorPilkingtons flat-glass, Bessmer bulb for steel production, online bookstores, …
ComplexityCompetitors are not able to master the complexity of the challengesRolls-Royce aircraft engines – only few competitors can master the complexity (construction and materials) of modern aircraft engines
Property rightsRights protect innovator from imitation, imitation only after license paymentSuccessful drugs like Zantac, Prozac, Viagra, …
Expansion of the competition parametersShift in competitive parameters from price to price and quality, further to price, quality and choiceJapanese car manufacturers systematically focusing on quality and choice without compromising on price competition
TimingFirst mover advantage – Being first to market with a product can mean substantial market shareAmazon.com, Pampers, …
TimingFast follower – second mover advantage, can learn from the mistakes of the first moverPalm Pilot – Apple was not successful with the Newton. Boeing had more success with the 707 as a second mover than the first mover de Havilland had with the Comet 
Robustes DesignVariations of existing and generations of new products can be developed based on this robust designBoeing 737. Although the platform is over 30 years old, it is still being adapted for different applications. Intel and AMD with different variants of their microprocessor families
Reconfiguration of parts or of an entire production processRethinking how parts of the process work togetherZara, Benetton in clothing, Dell in computers, Toyota in supply chain management, …
Transferring ideas, concepts and technologies to new domainsUsing existing expertise in new markets / application areasFischer uses skills acquired in ski manufacturing in the construction of aircraft parts by FACC

Source of the table: Tidd et al. (2018), although the examples are taken from the large enterprise sector for the sake of better clarity.