The German economies owe a large part of their success, as they say, to the technical precision that characterizes many innovations. However, these masterpieces of engineering are disadvantageous for economical reasons if, firstly, customers do not or cannot appreciate this precision, or if, secondly, this precision manifests itself in a multitude of functions that are only used by a small number of customers.
For the first case, consider, for example, the very successful Gillette wet razors. Gillette has been present in the German-speaking world since 1908 and was very successful with a razor with one blade. In 1971, Gillette introduced the razor with two blades. In 1998, Gillette introduced the razor with three blades. In 2006, the new generation of Gillette wet razors already united five blades…
As an example of the second case, Microsoft Word is often mentioned, whose range of functions far exceeds the requirements of most users. Word offers hundreds of functions, how many of them are even needed by the majority of users are questionable.
Perhaps one can achieve something more with simplification?
- Consider what would happen if you were able to save 20 percent of the functionality of one of your products, and thus were able to reduce the price by 80 percent. Here, as well, you can refer to goods or services from your immediate private environment if you do not work in a company.
- Consider which customers would be deterred by this measure, which customers could be gained? Also consider what impact this measure would have on manufacturing and product maintenance.
- Now consider what measures you would have to initiate to save exactly this 20 percent of functionality.
- Now here’s an exercise you’ll enjoy. Take a product, think of three or four improvements to this product that engineers or developers would find exciting, but that have no value to your customers.
What makes innovations successful?
At this point, we are interested in what factors contribute to the success of innovations.
From economic research
For years, economic innovation research has been concerned with the question of which factors contribute to the success of innovations. Countless studies have dealt with this topic. Van der Panne et al. (2003) have compiled and summarized them. If you now believe that a publication from 2003 can certainly no longer be called up-to-date, then that is probably correct. However, it turns out that the results of the study are firstly plausible and secondly certainly still valid today.
Generally, we have to distinguish between the technical success of an innovation and the commercial success of an innovation. Only if an innovation is successful in both dimensions will it make its contribution to the competitiveness of the innovating company. Please note here that van der Panne et al. (2003) only focus on product innovations.
The following factors are those about which there is consensus, based on empirical evidence that they contribute to innovation success.
From management practice
- Encouragement and empowerment
- Positive reinforcement, recognition
- Creative people with critical thinking
- Top management commitment
- Clear strategy
- Protected space to experiment
- Sufficient resources
- Innovation as part of the culture
- Focus on the business and the customer
If we believe that we are successfully innovating when we are still integrating an additional feature or still integrating an additional function, then this is not necessarily purposeful. With the Gillette example above, we have tried to illustrate this.
The basic idea behind frugal innovations is that more is not always better. With frugal innovations, it is also possible to reach completely new customer groups and address their economic and social needs while using fewer resources.
Here, a brief example from Navi Radjou is about big questions answered with simple innovations:
Here’s a TED talk by Navi Radjou on frugal innovation:
The potentials of frugal innovation for German companies and for the German innovation system are summarized in this paper.