In innovation management, size doesn’t matter… or does it?

A medium-sized company employs up to 250 people and has an annual turnover of up to €50 million. It has neither the resources of large multinationals or the flexibility of its smaller peers. If you are leading innovation management in a medium company, the fact that size doesn’t’ matter is the first myth to overcome for a successful programme.

On the one hand, large-scale companies find it more difficult to make more drastic changes because they have more at stake. On the other hand, if they are willing to invest, they have the resources necessary to really encourage and implement innovation, and may also be less risk-prone.

Standing on opposite sides of the spectrum
Corporate giants such as P&G, General Electric, Nike and IBM remain some of the most innovative companies in the world, because they recognise that investing in innovation is the only way to survive. These companies can explore all branches of innovation, both incremental and disruptive, by hiring specialised people such as Chief Innovation Officers, creating devoted teams, and investing in R&D labs and partnerships with universities.

When innovations fail, they are able to absorb losses. In fact, rather than substantiating the idea that big companies are resistant to change, studies suggest that large organisations with high level of complexity and differentiation possess higher motivation to adopt innovative behaviour.

On the other end of the spectrum, small companies have fewer resources but are more agile to experiment and discuss new approaches particularly when it comes to startups.

While the more traditional businesses remain the same or grow progressively over the years, the ones that do scale (and tend to be more risk-prone) often experiment and try faster. This means they will also fail faster and often, in what Silicon Valley calls “failing forward”, leading to faster growth rate.

Where do medium enterprises fit in?
Medium enterprises fit right in the middle, between two very different realities. And so there are several barriers that these companies face on their path to good innovation management, such as:

  • Lack of budget/limited monetary resources
  • Lack of innovation infrastructure
  • Shortage of innovation specialists
  • Lack of incentives for innovation
  • Resistance to change (in top-down initiatives)
  • The high cost of new tools and processes

For these reasons, these firms are more at risk of falling behind because they are not investing enough to meet the challenges brought on by new technology. Adjustments must be made to adapt to technological change and disruption, but most companies are less able to invest and experience day-to-day struggles amid weak business growth.

But it’s not all bad news and some advantages are playing in your favour.

Learn how to leverage them and read more about the 4 myths keeping medium enterprises from innovating here

Andreia Agostinho Dias, Sales Executive
Diana Neves de Carvalho, Exago’s CEO

Hallo Innovator! Exago Smart innovation management software is now in German

Exago Smart innovation management software can now be used by German speakers in their own language. With the new version, the Exago enterprise-grade solution becomes available in nine language options, enabling over a million people worldwide to share ideas and insights and contribute to their company’s innovation and business goals.

German users in any organisation can now navigate the platform in their mother tongue. Thanks to Google Translate API integration, multinational organisations who adopt Exago in several languages simultaneously can also have immediate content translation, promoting collaboration across different countries and cultures.

Adaptable to specific innovation processes and workflows, Exago Smart was built for inclusive collaboration and to make innovation grow in large enterprises. It facilitates idea management and ensures sharper results with a patented, smart crowd selection mechanism based on prediction markets.

Besides German, Exago’s most advanced product edition is available in English, French, Spanish, Italian, Russian, Romanian, Portuguese and Brazilian Portuguese versions.

How can medium enterprises innovate successfully?

Though not always fully recognised, Small to Medium Enterprises are the root of economic growth and job and wealth creation. They play a vital role in the global economy, strongly contributing to employment rates, innovation and growth. For instance, in the European Union they represent 99.8% of all enterprises, where they generate 60% of GDP, and provide 70% of employment in the private sector.

Yet, such a fundamental role is only possible if SMEs are able to continue reinventing themselves in order to innovate actively and remain relevant.

First suggested in 1931, the theory of innovation dynamics proposed by the founding father of innovation, Joseph Schumpeter, is more fitting now than it has ever been: the generation of new ideas and ways of doing is imperative for economic growth. All organisations, no matter how small or large, are facing challenges today that were unheard of only a generation ago.

Trade liberalisation and the movement of financial capital, paralleled by the information and communication technology development, have accelerated this trend exponentially.

This means that companies must decide wisely, fast and continuously how to invest and use an array of new methods and technologies while fighting to compete on a global stage.

According to Schumpeter, the only way to respond to this growing competitive business environment is to develop an economy based on innovations, knowledge and educated people. And nowhere is this fight to succeed more marked than in medium-sized companies.

Why then do medium enterprises still fail to innovate? We’ll see that next.

Andreia Agostinho Dias, Sales Executive
Diana Neves de Carvalho, Exago’s CEO

Learn more about the The 4 myths keeping medium enterprises from innovating here

Sí, Exago Start innovation software is now available in Spanish

Very recently launched in English, the Exago Start innovation software can now be used by Spanish speakers in their language. Built to empower teams to innovate, the new edition easily brings everyone on board your innovation programme, in a record time, to get them to contribute to business evolution goals.

With ready-to-go and field-tested configurations, this collaborative innovation software ensures fast engagement and results, offering guidance in every phase of your initiative.

You can try it for yourself for free, no strings attached, with a 30-day Free Trial!

The 5 steps for strategic cost-cutting in your innovation agenda

In times of uncertainty, when business models are challenged, managers and financial directors are bound to cut costs to make organisations more agile, robust and adaptable to change. Leaders with a clear vision then tend to use cost-cutting and improvement to align costs with business strategy, to lower costs, focus on the aspects of the business that are controllable and free up resources to fund transformation and future growth.

However, aggressive cost-cutting tactics will not salvage companies under pressure. The change must go deeper, reaching a strategic and cultural level. This means that a company’s most valuable assets – people and their talents – must be mobilised to innovate and to find new ways of working that do not require high investments in new product research and development. Together you can save substantial amounts of time and money.

We show you how to add strategic cost-cutting and improvement to your innovation agenda, and how the development of an innovation culture is a powerful tool to align people’s focus, change behaviours, save costs and deliver continuous and effective results. To make it work, we guide you through the following five steps:

 

1. Define your strategic cost-cutting goals, which can be incorporated in your innovation agenda.

You need to have a clear view of your company’s strategy and map out good and bad costs for programme intervention, at macro and micro levels. On the one hand, bad costs should be seen as those that do not align with the growth strategy. On the other hand, good costs are those that support business capabilities to achieve growth and may be worthy of more investment.

2. Guarantee C-Suite engagement from the beginning and have a clear direction for your cost strategy.

You should deliver cost optimisation with the support of the CEO and top managers, defining areas of improvement from the beginning, as well as how to address each of these areas.

3. Invest more in bottom-up approaches, engaging and having your people contributing.

Simply externalising tasks and reducing headcount are often ways to overshadow a complex problem. You need to call on people’s knowledge and experience to help you separate the wheat from the chaff and find concrete and innovative solutions.

4. Be resilient in creating a cost-conscious culture for continuous optimisation of resource use.

Over time, as you seek new ways to rationalise and optimise costs, a new culture of strategic cost-cutting will be embedded.

5. Explain to your workforce your shared mission and remove fears,

ensuring that both needs and strategy are consistently understood across the organisation. Your employees must feel they have a role to play and can have an active voice in the decision-making process, being welcomed into the discussion about the best ways to reach the proposed goals.

 

A well-structured innovation management programme for strategic cost-cutting and improvement can be particularly useful to get employees identifying ground-level enhancements, with several additional advantages:

  • allowing you to develop a cost-conscious culture
  • easily uncover bad costs and inefficiencies
  • assure more dialogue and engagement
  • build up an ongoing, resilient process

Strategic cost-cutting is never blind cutting. It is, in fact, a method to accelerate the discovery of new and more effective ways of doing business, at a lower cost, challenging you to look at the larger picture, to seek the root cause of the problem. It should be seen as a way of questioning how we do things, even why we do them, exploring new innovative routes and building the foundations of tomorrow’s growth.

Andreia Agostinho Dias, Sales Executive
Diana Neves de Carvalho, Exago’s CEO

Get to know the Five Steps to Introduce Cost-cutting in your Innovation Agenda here