Unlocking innovation in unstable times: the power of benchmarking
The COVID-19 pandemic and geopolitical crises have disrupted various aspects of life and business. Executives believe the crisis will fundamentally change the way they do business and create new growth opportunities. However, most executives feel unprepared to address these changes. Many companies are deprioritizing innovation in a crisis, focusing to maintain core business continuity. To emerge as innovation leaders, companies should prioritize the discovery of changing customer needs, evolving business models, and choosing the right initiatives. They should also set new aspirations, accelerate, and scale innovation efforts, extend their reach through partnerships, and mobilize talent and resources1.
According to the Innovation Indicator 2023 by Roland Berger and BDI, Germany's innovation capability ranks 10th globally, behind Switzerland, Singapore, and Denmark2. Germany excels in new production technologies but lags in digital connectivity and hardware. Furthermore, Germany falls behind in R&D investment compared to other industrial nations. While the research and development budgets of the top 500 companies worldwide increased by 14% in 2022, reaching a total of 889 billion euros, German firms only accounted for 68 billion euros, representing an 11% growth. In contrast, companies based in the United States invested 475 billion euros, marking a 16% increase from the previous year3.
Amidst the fear of a worldwide recession, companies often overlook nurturing their own innovation capabilities. However, investing in innovation, especially during times of crisis has over the last years been a proven way to unlock long-term competitiveness and is proven to be a strategically important answer to external trends. During the last economic downturn in 2008, unicorns like WhatsApp and Uber emerged as industry giants. Adapting to the shifting market and demand situation ensures the survival of businesses, emphasizing the need for thinking and acting beyond conventional routines4.
But how exactly do the most successful companies organize and prioritize their innovation efforts in these times? What can one learn from the best in terms of innovation during a crisis?
Benchmarking studies may offer a valuable avenue for companies to discover how industry leaders are effectively managing innovation, validate their own approaches, and gain insights into best practices and strategies for maximizing innovation potential.
Why is now the perfect time for your company to participate in benchmarking?
Benchmarking, a continuous process utilized by competitors and industry leaders, serves to measure processes, services, and products. It goes beyond simply comparing similar products offered by competitors or non-competitor businesses. Instead, it offers valuable solutions that can address the shortcomings within a business. The practice of benchmarking is carried out for various reasons, including the ability to learn from others' experiences during a crisis. By examining mistakes made by other companies during crisis periods, businesses can avoid repeating them and transform challenges into opportunities. Documenting the execution process, decision-making, and crisis team meetings, along with evaluating the implementation of the crisis management plan, helps businesses identify disruptions and enhance their practices for future resilience5. This integration of benchmarking and crisis management enables companies to proactively learn, improve, and stay ahead in challenging times.
What is our approach to conducting benchmarking studies?
As specialists in Technology and Innovation Management, we have comprehensive experience in conducting benchmarking studies. During those studies, we aim to identify the key success factors by collaborating with an industrial consortium consisting of diverse companies. Through this research, we delve into organizational and methodological aspects to create a shared environment conducive to driving innovation forward.
The benchmarking study follows a systematic methodology consisting of five key steps, ensuring a thorough benchmarking of successful company practices in the field:
Kick-off Meeting: The benchmarking study begins with a kick-off meeting, where all relevant stakeholders gather to define the specific topics of interest in technology and innovation management. During this meeting, we identify the key areas and aspects that will be explored throughout the study. Based on these areas, we design a questionnaire that will be distributed to up to 5,000 companies.
Screening Phase: In this phase, we undertake a rigorous screening process to identify companies that exemplify successful technology and innovation management. Through extensive research and analysis, we shortlist organizations that demonstrate exceptional performance in driving innovation and achieving market success. These companies serve as the benchmark against which other participants will be evaluated.
Review Meeting: Following the screening phase, we hold a review meeting with the industry consortium which is the key driver of the project. During this meeting, we discuss and analyze the results obtained from the benchmarking process. This collaborative session allows knowledge sharing, practical insights, and the identification of common patterns and best practices in technology and innovation management.
Visiting Successful Companies: After identifying the most successful companies through the benchmarking process, we arrange visits to these organizations. This on-site experience provides a unique opportunity to gain firsthand insights into their strategies, processes, and culture. By immersing ourselves in their environment, we aim to learn from the best and extract valuable lessons applicable to other companies seeking to enhance their technology and innovation management practices.
Final Conference: The benchmarking study concludes with a final conference, where we present the findings, key learnings, and success factors identified throughout the study. This conference serves as a platform for knowledge dissemination, enabling participants to gain a comprehensive understanding of the critical factors that contribute to successful technology and innovation management.
By following this robust methodology, we ensure an insightful benchmarking study that uncovers the key success factors in technology and innovation management. Through collaboration, site visits, and knowledge sharing, we aim to provide valuable insights and guidance to organizations striving to transform innovative ideas into successful market innovations.
Success factors in Technology and Innovation Management from our past studies:
Clear and long-term innovation strategy is crucial to increase the likelihood of turning innovative ideas into successful market innovations. This strategy should align with market trends, technological advancements, regulatory requirements, and customer demands. It serves as a roadmap for generating competitive advantages and driving growth.
Balance between core business functions and parallel structures dedicated to fostering disruptive innovations. This allows them to navigate established processes and regulations that may impede new ideas.
Prioritization of early experimentation over prolonged analysis. Instead of getting caught up in endless data gathering, they create early experiences, build prototypes, and validate business models with real customers. This agile approach proves valuable in a rapidly evolving market.
Digitalization of technology and innovation management. Although promises of automated trend analysis, regulatory alert systems, and structured knowledge repositories abound, many fall short of delivering on their potential. As the landscape evolves, it's essential to reevaluate these digitalization efforts and ensure they provide actionable insights and condensed knowledge.
Innovation culture is a differentiating factor for successful companies. Establishing clear signals within the organization enables employees to live and experience the culture of innovation. This can be achieved through initiatives like granting employees the freedom to pursue innovations independently, allocating specific budgets for radical innovation, and fostering collaboration across generations.
Finding a balance in innovation controlling. Successful companies combine qualitative criteria like team dynamics, competence, idea logic, market understanding, and customer insights in the early stages. As product development progresses, they introduce quantitative criteria, using clear KPIs to measure speed and efficiency.
While the success factors described have proven effective in the past, their continued relevance in today's dynamic and agile world should be critically examined. Companies must continually reassess and adapt their approaches to innovation management to stay ahead of the curve and ensure sustained success, and our benchmarking Studies support them in this important process.
In essence, participating in benchmarking now allows companies to tap into the transformative power of innovation amidst a global macro-economic crisis, and to build resilience for long-term company success in the face of market and political uncertainty. By benchmarking against the best, you can position your company for success in today's dynamic business environment and gain a competitive edge that will propel your growth in the future.
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