Chapter 3

• invention of a new product, process, or service is regarded as the starting point. It usually requires investment in production preparation and market development

• Lyons defines innovation as “what defines who wins and who loses.” For him, the successful commercialization of innovations is the main focus

• novelty, an innovation can be understood to be “qualitatively novel products or processes that differ ‘noticeably’ from a comparative state—however this is to be determined”

• Process innovations . A good is produced more cheaply, qualitatively better, more environmentally friendly, safer, or faster. The innovations start with the work, they are task-oriented, and eliminate existing process weaknesses. Process innovations are internally (sometimes also inter-company) oriented and aim at increasing efficiency.

• Product innovations. fulfill completely different purposes, or at least to serve existing purposes differently. Product innovations typically take some time to become established on the market. Effectiveness is the goal.

• Service innovations are often also referred to as product-service systems, because they are where product and process innovations coincide. This is due to their immateriality (because services are intangible); heterogeneity (because of direct customer involvement in their creation); inseparability (from the process of providing the service); and transience (because they cannot be stored or transported).

• Market innovations relate to new sales or procurement markets. The aim is to open up new customer or supplier potential, which can increase turnover, lower purchase prices, or improve the quality of services

• Structural innovations are renewals in the corporate structure. This may involve work structures such as new work schedules, workplace models, or new personnel development procedures. Objectives are the increase of employee qualification and/or motivation, or the rationalization of operational processes. Sales, marketing, organizational, or logistical structures—such as franchise systems—are also conceivable

• Cultural innovations mean improvements in the social sphere, including among individuals themselves. Within companies, for example, this can mean a change in cooperation between employers and trade union representatives

• Content dimension (What is new?)

• Intensity dimension (How new is new?)

• Subjective dimension (New for whom?)

• Actor dimension (New by whom?)

• Process dimension (Where does the innovation begin, where does it end?)

• Normative dimension (New = successful)

• Willingness to learn, curiosity, and flexibility: The joy of lifelong learning requires that employees develop improvements for what exists now.

• Sensitivity: When employees perceive trends, customer needs, or even internal problems, they also recognize opportunities for change.

• Confidence: Standing up for one’s own ideas requires strength generated by selfconfidence.

• Decision-making ability: In order for innovations to emerge, one's own decisions are just as relevant as the path through superiors.

• A sense of purpose and loyalty to goals: For innovations to become reality, hard work is usually necessary. This is supported by clear objectives and adherence to targets.

• Enthusiasm: Resistance and difficult phases often occur in innovation projects. The ability to be enthusiastic helps to carry one through tougher times.

• Communication skills: If one’s own ideas are well communicated, others are more quickly convinced and can be more involved

• Risk reduction

• Simplicity: The decision phases are linked to clearly defined criteria and pre-estimated services, on the basis of which the gatekeepers from management make decisions on further action and investments. They prioritize ideas and allocate resources between ideas and across development projects.

• Transparency: Everyone can see that investments in good ideas and projects with good progress are made on the basis of defined criteria, and by whom the decisions are made.

• Support: There is a set of methods, tools, and templates for each work and decision phase. In addition to scoring approaches, portfolio management also integrates, for example, NPV (net present value), IRR (internal rate of return), and PI (productivity index).

• Experience: The procedure is tested and has been used for approximately 25 years; company results prove the success.

• In the event of a major risk, the entire process with all five work and decision phases are implemented.

• If only a moderate risk exists, work phases 1 and 2 as well as 4 and 5 are combined and the number of decisions is reduced to two.

• For small projects, it is sufficient to combine work phases 1 and 2 as well as 3, 4, and 5 and to provide for only one decision.

• A clear procedure with stop-and-go criteria

• The innovation rate can be significantly increased by dividing the process into cloud and building block phases.

• The phase objectives of the process should be defined for all results, especially with regard to the business decision to start the next project phase. Iterations must always be possible in the running project.

• Changing target conditions during a project originate from weak market clarifications at the beginning. This should be prevented.

• A stop-and-go policy should be avoided—consistency and continuity are important. • Product development runs parallel to production process development (simultane-

  ous engineering), but the cloud and building block phases must not be carried out in parallel.

• The support of management is always necessary as an important power promoter. Together with a technical and process promoter, as well as interdisciplinary cooper-

  ation from project staff, projects are ultimately successful.

• Participatory observation: Field researchers achieve the closest possible contact with the object of study by immersing themselves in the field of study through their own participation. In this way, they also receive information about actions that the object of study performs, for example, unconsciously.

• In-depth interviews

• Artifact studies: Observing how people use objects also leads to information about the meaning of the objects. In addition, social relationships with people become apparent.

• Video: Video recordings can be covert or overt. They provide before-and-after perspectives on events, and they enable a later presentation of the approach.

• Sorting of cards: The respondents receive different cards that are to be sorted or classified in relation to a question. The results are photographed and a statement is added. From this, the priorities or clusters of meaning can be determined.

the design of a new product is user-centered; the user is consistently at the center of attention. Empathic design involves both an observation process and the development of emotional ties.

• User impulses: Testing what makes people want to use a product and whether they do so in the anticipated ways.

• Interactions with the user context: Determining how the product fits into the user's unique context.

• Unplanned product change by the user: Checking whether the user might change the product in an unplanned way in order to optimize its use.

• Intangible product characteristics: Analyzing whether there are immaterial attributes for the product, which have an influence on the overall perception.

• Unarticulated customer needs: Ensuring that any problems that may arise while using the product are easily circumvented. This can happen unconsciously without the user’s awareness.

Innovation is about something new. In the entrepreneurial context, it is mainly product/service and process innovations, but there is also talk of market, structural, and cultural innovations.

Due to these dimensions, the concept of innovation involves:

• Intensity dimension (new in fact and new in degree)

• Actor dimension (new by whom?)

• Process dimension (where does it begin and end?)

• Normative dimension (new means successful)

In innovation management, the focus is on the design of innovation processes. Here, a distinction is made between idea generation, acceptance, and realization, whereby different models describe different sub-phases.

The stage-gate model provides for a change of work and decision phases. In the agile-stage-gate hybrid model, the requirements of digitization were taken into account by incorporating feedback loops and the interaction of the project team with users and customers. The division into cloud and building block phases takes into account the different circumstances of the two phases.

If the opportunity arises, a protection strategy should be developed. A distinction can be made between a legal and a factual protection strategy, but the two protection strategies should complement each other.

Since customer needs are increasingly becoming the focus of companies, ethnographic research and empathic design have proven to be beneficial instruments. Ethnographic research assumes that “everything is context.” Empathic design means a user-centered development of the design of a new product. BMW has used this successfully on several occasions.