Finding smarter ways to bridge the innovation gap

Companies need to learn how to leverage innovation to out-innovate their competitors

Prof Oliver Gassmann: “Too often, SMEs try to reinvent the wheel. They also tend to rely on their own resources instead of opening up innovation to external partners, and this is especially relevant in times of scarce resources.”
Business _ Innovation
Oliver Gassmann
InterTradeIreland
University College Cork
Mon, Sep 16, 2013, 01:00
First published:
Mon, Sep 16, 2013, 01:00

Innovation is an essential element for business development and success, but many innovations fail. The key reasons for such failures, according to Prof Oliver Gassmann – a world leader in the area of open innovation – include overengineering, poor timing and inadequate business models.
By learning to avoid such failures, companies can learn how to successfully leverage innovation which will enable them to out-innovate their competitors, he says.

Key factors
The key success factors for innovation on the other hand include an open culture, adequate processes and instruments and a clear focus, according to Prof Gassmann. Excellence is achieved by not only addressing new products based on new technologies, but also by business model innovation.
“Companies also have to rethink and revolutionise their industry and market by creative imitation as 90 per cent of all business model revolutions are in fact recombinations of existing ideas, concepts and technologies,” he remarks.
Prof Gassmann delivered the InterTradeIreland 2013 innovation lecture at UCD and UCC earlier this month on the topic of “Secrets of Innovation and the €100 Million Question”.
Professor of technology and innovation management at the University of St Gallen, Switzerland, since 2002, Gassmann has for the last 10 years also consulted with several Dax (German Stock Index) companies on their growth and innovation strategies.
He has published over 300 publications and several books on innovation, including Profiting from Innovation in China in December 2012. In 2009, he was identified as one of the top 50 ranking researchers by the International Association for Management Technology.
Having conducted extensive research into the success factors of innovation, Prof Gassmann believes that companies can benefit from learning the dos and don’ts of innovation.
One common downfall is overengineering, ie the designing of a product to be more complicated than is necessary for its application, eg a family car that can drive at 300kmh. This is a common issue for university start-ups and spin-offs, he explains.
Another reason for the failure of an innovation is the development of “Me Too” products, for example radio-frequency identification (RFID) technology over the last decade. Technical weakness, the wrong timing, inadequate distribution channels and bad communication about the product are other common causes of failure.
He comments: “You can avoid all of these mistakes by forecasting how much the world will have changed three years from now when your innovation is on the market. Typically 80 per cent of factors in innovation are manageable factors within the company and only 20 per cent are external, eg environmental issues, regulations and price deterioration.”

‘Fuzzy front end’
One of the vital stages of development in any product, according to Prof Gassmann, is the “fuzzy front end” at the start of innovation where you do not really know where you need to go or understand what your customer needs.
He points to the example of BMW, who say you should not have to ask your customers what they want, you should understand your customers better than they understand themselves and give them something they do not expect to get so they are very satisfied with it.
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