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Europe INNOVA paper n° 18 High-Impact Innovation Management Consulting Services for SMEs 2012
TABLE OF CONTENTS1. Preface and Acknowledgements 42. Management Summary 6 2.1 IMP³rove as Basis for a European Model for Developing Innovation Management Capabilities 6 2.2 Further Developing the Market for High Quality Innovation Management Support Services 6 2.3 Establishing the IMP³rove - European Innovation Management Academy 73. Introduction 84. Emerging Demand in Innovation Management Consulting Services for SMEs 10 4.1 Innovation Management Consulting Services for SMEs: Still Strongly Needed 10 4.2 Addressing the SME Needs: Offerings of Innovation Management Service Providers 17 4.3 Creating Demand for Innovation Management Consulting Services 23 4.4 Success Factors for Meeting Demand 285. Meeting the Current Demand of SMEs for Innovation Management Consulting Services 30 5.1 The Dimensions of Innovation Management 30 5.2 Value-Driven Innovation Management Consulting Process 35 5.3 Access to Better Innovation Management Consulting Tools 40 5.4 Case Examples of Innovation Management Consulting Services 42 5.5 Conclusions from the Case Examples: IMP³rove Contributes to Effective and Efficient Innovation Management Consulting Support 766. Future Development towards Professionalization of Innovation Management Consulting Services for SMEs 81 6.1 Anticipating Trends for Better Innovation Management Consulting Services 81 6.2 Professionalization of Innovation Management Consulting Services 82 6.3 Outlook 847. Appendix 85 7.1 List of Contributors 85 7.2 List of Publications that Resulted from IMP³rove 87 7.3 List of IMP³rove Service Offerings 87 7.4 List of Abbreviations 101 7.5 List of Figures 102
4 High-Impact Innovation Management Consulting Services for SMEs 1. Preface and Acknowledgements “Growth champions have better functioning innova- ing. To compensate for their time and commitment tion management systems – and better managing to IMP³rove, we have listed these organisations at innovation saves costs in enterprises.” - the insight the end of this report. May this listing establish from a database on Innovation Management and them as highly professional Innovation Manage- business performance of more than 3500 SMEs ment support providers and consultants and as can be condensed to that simple statement. true promoters of IMP³rove. Despite this Innovation Management consulting for The success of IMP³rove is based on the trust that small and medium enterprises (SMEs) is still a rath- companies, mainly SMEs, have in this approach to er young discipline. The IMP³rove project, estab- Innovation Management. They are willing to allow lished by the European Commission’s Directorate a glimpse into their operations and into the chal- General (DG) Enterprise and Industry to help SMEs lenges they are facing when it comes to Innova- manage innovation with lasting results, collected tion Management. We are most grateful for their insights into this sector for more than four years. trust in IMP³rove. Without their contributions, this Starting with the IMP³rove online self-assessment IMP³rove study would not have been feasible nor on Innovation Management for SMEs, it became could it demonstrate the versatility of the IMP³rove obvious very quickly that SMEs need support. First approach. In return, we hope that with the IMP³rove of all, they need assistance in completing the support services for SMEs, we can contribute to IMP³rove assessment. After receiving the IMP³rove their superior Innovation Management perform benchmarking report, they need qualified support ance and competitiveness. providers who can help derive the right conclusions and recommendations from the IMP³rove bench- IMP³rove also benefited from many extraordinary marking report. organisations that were willing to promote and disseminate Innovation Management services. We The IMP³rove network includes more than 500 would like to thank especially the EU’s Executive trained support providers across Europe and be- Agency for Competitiveness and Innovation (EACI) yond. This is a solid basis for an overview on the in Belgium, the European Association of Develop- various types of Innovation Management sup- ment Agencies (EURADA) in Belgium, F.A.Z. Institut port service providers and how they deliver high- in Germany, innovationmanagement.se in Sweden impact support services. These organisations are, (www.innovationmanagement.se) and Innovations- to some extent, pioneers and innovators because Manager in Germany. they adopted the IMP³rove approach as part of their consulting approach. Working with them we IMP³rove benefited not only from practitioners’ in- were able to learn about the challenges and needs sights, but also, to a large extent, from the con- in Innovation Management consulting. This experi- tinued support of the European Commission’s DG ence helped us to further develop IMP³rove sup- Enterprise and Industry. Reinhard Büscher and es- port services for professionals and assist IMP³rove pecially Sven Schade have strongly supported the network partners in marketing and delivering their development of IMP³rove from a project to the own Innovation Management support services. future IMP³rove – European Innovation Manage- Thus, IMP³rove developed from an online platform ment Academy. They took the vision developed for providing an Innovation Management assessment IMP³rove and provided the basis on which to build tool to what will be the IMP³rove – European In- with creative ideas, constant promotion and un- novation Management Academy in the future. This bureaucratic solutions to overcoming constraints organisation will offer a suite of value propositions and challenges. Lisbeth Bahl Poulsen helped pro- for Innovation Management. Key customers will be vide the required marketing material to communi- the Innovation Management professionals who are cate IMP³rove results. IMP³rove was supported by active in consulting, in public agencies, in academia the European Commission across directorates. Jörg or in the area of innovation financing. Lackenbauer from the European Commission’s DG Regio significantly supported the dissemination of Without the contribution and feedback of various IMP³rove in Hungary to ensure high-value consult- members of the IMP³rove network, the insights into ing services there in the future. Innovation Management consulting services could not have reached the depth and breadth necessary IMP³rove support services strongly depend on to show the level of professionalization that has the uninterrupted software platform. Our special been reached in Innovation Management consult- thanks go to Dirk Röhrborn, Tino Schmidt and the
High-Impact Innovation Management Consulting Services for SMEs 5support team at Germany’s Communardo, who en-sured that the IMP³rove platform was available forbetter Innovation Management support.Valuable feedback and recommendations for futuresupport services in Innovation Management alsocame from the IMP³rove Advisory Board. We wouldlike to especially thank Dr. Peter Noyes at the Uni-versity of Wales in Newport in the United Kingdom.He always had the right advice when it was mosturgently needed to move to the next stage.We are also grateful to our colleagues at A.T. Kear-ney, Fraunhofer IAO and the Agency for the Promo-tion of European Research (APRE), who supportedIMP³rove in many ways. At A.T. Kearney, our specialthanks go to Olivia Nowak, who never lost her can-do spirit, even when the workload seemed unman-ageable; to Branko Zibret, Robert Kremlicka, Tomis-lav Corak, Jochen Graff, Luca Olivari and BerndSchmidt, who ensured that IMP³rove gained visibili-ty across Europe; to Patricia Sibo and her team, whoensured that the IMP³rove publications met highprofessional standards; and to Benjamin Schultejo-hann and Deborah Kanthack for supporting the var-ious work streams of the project. Such a project’ssuccess depends highly on the background support.Therefore, we would like to thank Jörg Weinmannand Tanja Maly, who ensured that the financials metthe requirements of the European Commission’s Fi-nance Department; to Frank Schröder, who helpedmarket IMP³rove insights; to Stefan Berruti, whopaved the way for IMP³rove from a legal perspec-tive; to Petra Werner, Anja Mainzer and Heidi Wag-ner, who were most flexible in providing the meetingfacilities and hosting the participants of the vari-ous IMP³rove events; and to Andreas Thomé, FrankMoczala and Andreas Lindner, who always went theextra mile when trainings and IMP³rove events hadto be prepared. At Fraunhofer IAO, special thanks goto Hans-Jörg Bullinger, Joachim Warschat, YvonneSiwczyk, Cindy Rojas, Larissa Scheifele, Claus Pe-cha and René Schneider. At APRE, special thanks goto Diassina DiMaggio, who was and still is a strongpromoter of IMP³rove and of Innovation Manage-ment, and to Christin Pfeiffer, Martina DeSole andRocio Escolano.March 2012Dr. Eva Diedrichs Dr. Sabine BrunswickerDr. Kai Engel Theo Malcotsis
6 High-Impact Innovation Management Consulting Services for SMEs 2. Management Summary Innovation in times of economic challenges means current best practices when striving for innovation taking risk in a risky environment1. With systematic and competitiveness. Innovation Management and true entrepreneurial skills these risks can be prudently managed for The IMP³rove Approach offers a holistic view on value creation. If Innovation Management is geared Innovation Management. It includes all dimen- to tangible business impact it helps companies sions of Innovation Management and addresses to grow faster than their competitors that do not all kinds of innovation not just product innovation. innovate at all or do not manage their innovation The IMP³rove Approach is applicable for all indus- projects effectively. This is proven by the IMP³rove try sectors and all types of enterprises, although it database, the various IMP³rove research results has a strong focus on SMEs. The comprehensive ap- and other (academic) research. 2 IMP³rove has de- proach as well as the high quality of the IMP³rove veloped service offerings to develop the Innova- tools and their versatility resulted in the up-take of tion Management capabilities on a European scale. the IMP³rove services by policymakers, Enterprise These services will be provided in the future by Europe Network partners, financial actors, aca- the IMP³rove – European Innovation Management demia and of course private consultancies in vari- Academy in response to the demand for better In- ous European countries and beyond. The IMP³rove novation Management support and to the need for Approach is perceived as the “gold standard” in In- professionalization of these services. novation Management support. The IMP³rove Approach has become part of the first 2.1 IMP³rove as Basis for European pre-standard on Innovation Management assessment. It is also congruent with the CEN Tech- a European Model for nical Specification that is currently developed on In- Developing Innovation novation Management System. Thus IMP³rove has Management Capabilities contributed to the development of a common Euro- pean approach to Innovation Management support IMP³rove has created the basis for a European mod- and a common market for Innovation Management el to develop the Innovation Management capa- support services. bilities in Europe. The IMP³rove Approach provides a comprehensive suite of Innovation Management support services for the different actors in the in- 2.2 Further Developing the novation eco-system. It combines Innovation Man- Market for High Quality agement assessment and benchmarking for SMEs with Innovation Management consulting services, Innovation Management with training and certification in Innovation Man- Support Services agement and in Innovation Management consult- ing. Many of these services are provided in different The market for Innovation Management support European languages to facilitate access to these services for SMEs in Europe is still rather frag- services for SMEs in the various European coun- mented. Many consulting companies – often small tries. Meanwhile more than 3000 SMEs across Eu- with only one or two employees – are rendering rope and beyond have benefited from the IMP³rove their services to SMEs. Each is using their own ap- Approach. They have benchmarked their Innovation proach. Therefore, it is not surprising that this mar- Management performance and gained valuable in- ket is rather in-transparent. A consistent European sights on the strengths and weaknesses that are approach to Innovation Management consulting as presented in the detailed IMP³rove benchmarking well as clear quality criteria will increase transpar- reports. Here the SMEs see the gap between the ency for SMEs, policymakers, financial actors and Growth Champions that set the benchmark, the av- for consultants themselves. It will also contribute to erage and their own Innovation Management per- the professionalization of these services. formance. These SMEs gained additional insights in 1 Marco Annunziata, Macroeconomic Perspectives, Global Trends in Innovation,2012 2 For IMP³rove research results see list of publications in Chapter 7.2; Gavin Cameron, Innovation and Growth: A survey of the empirical evidence, Nuffield College, Oxford, OX1 1NF, UK, 1998; GE Global Innovation Barometer 2012 confirms that innovation and growth are “inextricably linked,”
High-Impact Innovation Management Consulting Services for SMEs 7Consultants that have experienced the benefits of rope – creating jobs in an emerging service sector inthe IMP³rove online assessment are now asking Europe. IMP³rove will respond to this demand andfor a European approach to Innovation Manage- take the risk of innovation itself. The innovation willment consulting. Almost 500 consultants have be the IMP³rove – European Innovation Manage-been trained in the IMP³rove Approach and are ac- ment Academy.credited as IMP³rove Guides. They have the certifi-cate to support SMEs in completing the IMP³roveAssessments. Some of them have acquired suffi- 2.3 Establishing the IMP³rove -cient practical experience with the IMP³rove Ap- European Innovationproach and proved their Innovation Managementconsulting skills. They are already on their way to Management Academyobtain their certificate as IMP³rove Expert level I.This will give them the accreditation for conduct- The increasing demand for better Innovation Man-ing the consulting workshops under the IMP³rove agement support services comes from consult-brand. They will be eligible to render Innovation ants themselves, from policymakers, financialManagement consulting services to SMEs within actors, and last but not least from SMEs. Havingpublicly funded programmes that require proven experienced the benefits of a common EuropeanInnovation Management consulting expertise. approach to Innovation Management assessmentThese first movers see the benefits of continuous and support services as provided by IMP³rove thedevelopment of their own Innovation Management request for more such services on a European scaleconsulting skills and in differentiating themselves increases.in the market. The IMP³rove – European Innovation ManagementDemand for high-quality Innovation Management Academy will build on the achievements generatedconsulting services comes mainly from intrinsic during the IMP³rove project. It will further developmotivated SMEs and from policymakers and inter- the Innovation Management support modules andmediaries. The number of intrinsic motivated SMEs products by branding them as truly European, highthat request Innovation Management consulting quality and value-adding IMP³rove offerings thussupport – and are willing to pay for it – is still rather contributing to the professionalization of the In-small. However, once they learn about the differ- novation Management consulting services and theence in quality they will ask for better Innovation European Innovation Management support market.Management support services - and acknowledgethe value that they received. Stronger promotion of The transition from IMP³rove as a successful pro-these high value-adding services to all stakehold- ject to the IMP³rove – European Innovation Man-ers will contribute in further developing the market agement Academy as a sustainable business is anfor Innovation Management consulting. innovation. The success of this innovation will be based on the willingness of SMEs, policymakers,Demand for professional Innovation Management consultants, intermediaries, financial actors andconsulting services for SMEs is still very much stim- academia to adopt the IMP³rove offerings and con-ulated by publicly funded programmes. The qual- tribute to their further and continued development.ity of these programmes can be enhanced. Not the The past success of IMP³rove as a project is encour-number of SMEs reached should be the perform aging to take the next step towards the vision ofance criterion but the impact that the Innovation leading Innovation Management support services.Management support generated. High impact sup-port modules such as Innovation Managementbenchmarking, consulting, training, coaching andmentoring for continuous improvement of the In-novation Management capabilities have to be inte-grated in the public programmes and disseminatedon a European scale.Proven tools, training and certification with Euro-pean reach are the pre-requisite for the necessaryvalue creation of the public programmes and forcompetitiveness of SMEs in Europe. They are alsoessential for developing the European market forhigh quality Innovation Management support ser-vices. These can be exported to regions outside Eu-
8 High-Impact Innovation Management Consulting Services for SMEs 3. Introduction IMP³rove – the initiative of the European Com- would require professional support for SMEs in mission, DG Enterprise and Industry – aimed at improving their Innovation Management perform improving the Innovation Management capabili- ance. Therefore, IMP³rove support services now ties and performance in Europe as a pre-requisite also include the consulting and coaching of SMEs for the competitiveness of Europe. This includes for better Innovation Management. To address the the improvement of the Innovation Management need for consistent support in Innovation Manage- of enterprises, especially small and medium sized ment, IMP³rove initiated trainings in the IMP³rove enterprises (SMEs) as well as the further develop- Approach in 2007 and in Innovation Management ment of professional support services in Innovation in general in 2008. This was the starting point of Management for these enterprises. the concept of the IMP³rove – European Innovation Management Academy. In 2010 the curriculum and In 2006 the IMP³rove project was launched with certification scheme of the IMP³rove – European the objective to provide an online self-assessment Innovation Management Academy was developed for benchmarking Innovation Management per- and implemented. This curriculum covers both In- formance. Very quickly it became obvious that novation Management and Innovation Manage- a thorough and value-adding assessment tool ment consulting topics. Figure 1: Short History of IMP³roveSHORT HISTORY OF IMP³ROVE • 2011 more than 3,000 SMEs have benefited from the IMP³rove Assessments and related services • 2011 almost 500 IMP³rove Consultants are trained in the IMP³rove Approach • 2010 IMP³rove has been adopted on all continents • 2009 he European Commission launched IMP³rove II with the aim to establish the IMP³rove – European Innovation t Management Academy and to develop a sustainability concept for IMP³rove • 2008 IMP³rove Assessment is a European pre-standard documented in the CEN Workshop Agreement CWA 15899 • 2008 IMP³rove receives the Europe INNOVA Award “Best Innovation Tool” • 2008 ore than 1,500 SMEs have successfully completed the IMP³rove Assessment and benefited from the IMP³rove m consulting workshops • 2007 the IMP³rove Assessment is available in 5 European languages • 2006 going live of the IMP³rove online platform • 2006 Initiated by the European Commission, DG Enterprise and Industry Lessons learned and insights from the develop- During the past years IMP³rove has developed ment and implementation of the various IMP³rove a comprehensive suite of Innovation Management services were published on a regular basis (see also support services for the development of highly ef- Appendix 7). All these publications are available for fective IMP³rove powered Innovation Management download at: https://www.improve-innovation.eu/ ecosystems. sme/valuable-links/publications/.
High-Impact Innovation Management Consulting Services for SMEs 9 Figure 2: Overview of IMP³rove Innovation Management Support ServicesWith the IMP³rove – European Innovation Man-agement Academy the services developed withinthe IMP³rove project will be offered on a sustain-able basis. Thus the IMP³rove - European Innova-tion Management Academy will contribute to bet-ter quality of Innovation Management consultingservices across Europe and beyond on a continuedbasis. It will increase the transparency of the qual-ity of Innovation Management support services forSMEs. It also aims at further developing the marketfor Innovation Management consulting, coachingand mentoring. Experience during the last yearsclearly show that enterprises do gain competitive-ness if they can achieve better Innovation Manage-ment results either with professional support fromoutside or with better qualified internal resources.Hence the demand for high-quality InnovationManagement consulting services is emerging bothfrom enterprises as well as from the public sector.
10 High-Impact Innovation Management Consulting Services for SMEs 4. Emerging Demand in Innovation Management Consulting Services for SMEs Innovation Management consulting services are ment consultants in improving Innovation Manage- crucial to increase the proficiency of Innovation ment in SMEs is well understood in many SMEs in Management in SMEs. In addition, innovation in Europe. For this reason, the intrinsic demand for In- SMEs has become more complex and requires a va- novation Management consulting services is not yet riety of managerial capabilities. As discussed in self-sustainable. Nowadays, the demand is often the following chapters, there is an emerging and created by other actors in the innovation ecosys- increasing need for high-impact consulting services tem, mostly by public support. High-quality Inno- for Innovation Management in SMEs. The following vation Management support services are therefore chapter describes how this demand emerges at the needed to effectively help enterprises improve their interplay of the variety of actors involved in the in- position and stay competitive. A high proficiency on novation ecosystem. First, it highlights the fact that Innovation Management and its support is there- SMEs need a systematic approach to Innovation fore critical. Management. Many SMEs do not yet fully under- stand the importance of Innovation Management 4.1.1 THE PERFORMANCE GAP IN MATURE as a driver of long-term competitiveness; there- SMES IN EUROPE fore, the average SME needs Innovation Manage- ment support. Second, we will describe different SMEs are the backbone of the European economy mechanisms that create the demand for Innovation in terms of job creation and economic growth. Eu- Management consulting services in the innovation rope’s SMEs are exposed to a range of competi- ecosystem, such as active promotion of free ser- tive challenges, such as globalization, increased vices via innovation policies. Third, we will provide research and development (R&D) costs and con- detailed insight into the variety of services and ap- tinuously shortening development life cycles, just proaches offered by private and public consultants to name a few. SMEs in Europe do not just encom- to address the needs of SMEs for higher proficiency pass young SMEs; many European SMEs are family in Innovation Management and to increase demand owned and have been established for more than for Innovation Management consulting services. a decade. Existing trends in the Innovation Management con- sulting market also put pressure on private actors A closer look into the IMP³rove database highlights in the Innovation Management consulting market. that mature SMEs are less agile than young SMEs. To conclude, this chapter presents success factors They grow at a slower pace in terms of both income for meeting the emerging demand in Innovation and the number of employees, and they achieve Management consulting services. a lower profit margin than their younger peers. While young SMEs from the age group of two to 4.1 Innovation Management 15 years achieve an average income growth rate of 27.4%, mature SMEs that have been established Consulting Services for more than 15 years grow with an average yearly for SMEs: Still Strongly growth rate of 8.6%. In addition, they show lower Needed activity in innovation (see Figure 3). IMP³rove has provided the evidence3 that higher One might assume that these older SMEs have proficiency in Innovation Management helps SMEs achieved a level of size where, by nature, their outperform their peers in terms of profitable growth rate has slowed down. However, a closer growth. However, neither the impact of Innovation look reveals that a large share of older SMEs have Management nor the role of Innovation Manage- stayed small. 3 Insights in Innovation Management, EuropeINNOVA paper 10, 2008; IMP³rove II Innovation Management in High-Growth SMEs from the Knowledge-intensive Services (KIS): Setting the Pace for Growth in Europe, 2010; IMP³rovew II Study: Gaining Competitiveness with Innovations beyond Technology and Products: Insights from IMP³rove, 2011
High-Impact Innovation Management Consulting Services for SMEs 11 Figure 3: Average Yearly Firm Performance (Young versus Old SMEs in the Sample) Figure 4: Number of Firms per Size Class (Comparison of Young and Old SMEs in the Sample)
12 High-Impact Innovation Management Consulting Services for SMEs As shown in Figure 4, more than 50% of SMEs Figure 5 highlights the growth gap between old and that have been established for more than 15 years young SMEs in the size class of five to 20 and 21 have fewer than 100 employees. More than 20% to 100 employees. SMEs with an age of 15 years of these older SMEs employ between five and 20 or younger in the smallest size class (five to 20 people. employees) grow with an average yearly income growth rate of 30.6 %. In contrast, the older peers Mature SMEs grow much more slowly. When com- of the same size class being older than 15 years paring the income growth of different sizes and age grow with a yearly growth rate of only 8.3%. The classes, IMP³rove highlights that mature and small same situation is prevalent for size class 21 to 100 SMEs with an age older than 15 years and with employees. Young SMEs in this size class grow at fewer than 100 employees show a much slower a rate of 24.1% while older SMEs that have been growth rate than their young peers with an age of established more than 15 years ago grow only two to 15 years of the same size classes. 8.1% in income per year. Figure 5: Income Growth across Different Size Classes (Comparison of Young and Old SMEs in the Sample) One might assume that the growth gap results from income from innovation of about 42%. On average, little innovation activity in mature SMEs. IMP³rove older SMEs generate a share of innovation income of reveals that mature SMEs do innovate and manage only 27%. Indeed, old SMEs cannot keep up with the to generate income from innovation launched no innovation agility of really young and small SMEs, longer than three years ago. However, their innova- which by nature generate most of their income from tion activity is lower than that of young SMEs. This innovations. Overall, IMP³rove data indicates that suggests that mature SMEs are struggling to link older SMEs are less active in innovation and achieve innovation to value growth and capture the value a lower income share from innovation across all size from innovation activities (see Figure 6). classes. Further, they have difficulties in linking their innovation to income growth and profit growth. Comparing SMEs with five to 20 employees high- lights that young SMEs―with an age between two Indeed, profit growth is a key issue for older SMEs to 15 years―show a much higher innovation activity that have been established for more than 15 years. than older SMEs that have been established for more In particular, older SMEs that have stayed small and than 15 years. Young SMEs achieve a yearly share of employ between five and 20 people achieve little
High-Impact Innovation Management Consulting Services for SMEs 13 Figure 6: Share of Income from Innovation across Different Size Classes (Comparison of Young and Old SMEs in the Sample)growth in profits. Although they have managed to 4.1.2 LACK OF SYSTEMATIC INNOVATIONsurvive and have become profitable, their growth MANAGEMENT IN SMESrate is rather low, so they have little financial bufferto reinvest and organically grow. Innovation studies 4 performed by the IMP³rove Global Coordination Team since 2006 revealed thatAs shown in Figure 7, young and small SMEs―the proficiency in Innovation Management allows SMEstypical start-up business―are struggling to survive. to achieve sustainable performance. Growth cham-On average, small SMEs with five to 20 employees pions―those SMEs that show a higher growth rateand an age of less than 15 years show a negative in terms of income, profit and number of employ-profit growth. In contrast, larger SMEs with an age ees―rely on systematic Innovation Management atbetween two and 15 years have achieved stability strategic, operational and cultural levels. To surviveand show a yearly profit growth rate of 4.7%. In in today’s highly volatile innovation landscape, SMEscontrast, older SMEs of the same size category― need to create a continuous flow of new ideas and21 to 100 employees―grow at a rate of only 1.2%. require managerial capabilities to turn these ideas into profitable growth. The IMP³rove publication inTo conclude, there is a significant performance gap 20115 highlighted that innovation in SMEs is not justin mature SMEs, especially in those ones that have about high-tech products and new technologies; in-stayed small over time and are from the two small- novations in services and new business models areest size categories: five to 20 and 20 to 100 em- just as important. There is empirical evidence of theployees. They are not in a competitive position. One interrelation of a systematic and holistic approachof the reasons is that they lack the capability to turn towards Innovation Management and profitabletheir innovation activities into profitable growth. As growth. To turn innovation expenditures into profit-shown in the following chapters, they lack the ca- able growth, SMEs need to address all dimensionspability to manage innovation and are flying blind. of Innovation Management at strategic, operational4 IMP³rove II Innovation Management in High-Growth SMEs from the Knowledge-intensive Services (KIS): Setting the Pace for Growth in Europe, 2010; IMP³rovew II Study: Gaining Competitiveness with Innovations beyond Technology and Products: Insights from IMP³rove, 20115 IMP³rovew II Study: Gaining Competitiveness with Innovations beyond Technology and Products: Insights from IMP³rove, 2011
14 High-Impact Innovation Management Consulting Services for SMEs Figure 7: Yearly Profit Growth of Different Size Classes (Comparison of Young and old SMEs in the Sample) and cultural level including the innovation enabling their Innovation Management activities throughout factors. One of the key prerequisites for a system- the innovation value chain. Fewer than 40% of the atic Innovation Management is an innovation strat- SMEs in the IMP³rove database define project-spe- egy to guide a firm’s innovation activities. cific parameters, such as time to market or time to profit. An even smaller number of SMEs have a clear However, many of the laggards among European understanding of their performance regarding idea SMEs―those that have stayed small although management or formal processes for developing they have been established several years ago―are innovations. The lack of a systematic approach for not strategically managing their innovations. Only managing innovation is even more prevalent for a small percentage of older SMEs have developed innovations related to new business models or or- and documented innovation strategies that detail ganisational innovations. In 2011, fewer than 10% their roadmap for future growth through innova- of the SMEs had a formal process for developing tion. However, those SMEs that grow faster among process, organisational and business model innova- the laggards and achieve a higher income from in- tions. IMP³rove also highlights that SMEs regularly novation are more diligent in their innovation plan- struggle with systematically managing the front ning. Older SMEs that have been established for end of the innovation life cycle covering the genera- more than 15 years and have an innovation strat- tion and selection of new ideas. New ideas are usu- egy in place generally grow at a yearly pace of 9.5% ally generated in an unstructured manner and are in income growth. In contrast, those that are in the not guided by an overall innovation strategy. About “blind flight” and do not have an innovation strategy 70% of SMEs have not developed and documented grow only 5.8% on average. an innovation strategy (see Figure 8). IMP³rove database analyses provide further evi- 4.1.3 SHOWING SMES THE BENEFIT dence that a high percentage of SMEs really are OF SYSTEMATIC INNOVATION flying blind. They have no transparency about the MANAGEMENT AND INNOVATION impact of their Innovation Management activities MANAGEMENT CONSULTING and do not systematically engage in managing SERVICES their innovation activities. Many SMEs do not define specific performance indicators for individual inno- IMP³rove provides empirical evidence of SMEs’ vation projects and do not measure the impact of lack of a systematic approach towards Innovation
High-Impact Innovation Management Consulting Services for SMEs 15 Figure 8: Percentage of SMEs in the Sample with no Innovation Strategy (in %; Across Different Age Classes; Status as of November 2011)Management. In addition, discussions with associ- ing services for competitiveness. The importance ofated IMP³rove consultants underscore the lack of a systematic and holistic Innovation Managementawareness towards the importance of Innovation for SMEs’ competitiveness has to be highlighted.Management in SMEs. SMEs regularly believe that Discussions with IMP³rove partners suggest thatinnovation is about the success of one individual governmental innovation programmes are neededinnovation project. The “mental model” of innova- to sufficiently convey the relevance of Innovationtion that is dominant among SMEs is that innova- Management and Innovation Management con-tion is about one successful idea that has been sold sulting. They need to address the specific needs ofto one customer. SMEs do not pay attention to the SMEs. For example, the need for Innovation Man-importance of other dimensions of Innovation Man- agement consulting in young entrepreneurial firmsagement and the impact on a sustainable business differs significantly from that of established andperformance. Associated IMP³rove consultants family-owned organisations. The number of SMEsregularly report that convincing SMEs about the has to increase that have a deep understandingimport nce of a systematic approach towards In- a about the importance of Innovation Management.novation Management is not an easy task. IMP³rove They need to experience the benefit of externalconsultants report that currently only very few consulting support for SMEs that want to build theirSMEs are preparing action plans that allocate ef- internal capabilities for managing innovations withforts towards the development of managerial ca- sustainable impact.pabilities for innovation in the areas of innovationstrategy, organisation and culture, innovation life- The impact of external support service providerscycle processes and innovation-enabling factors. unfolds after the SME has gone through a struc- tured process covering the analysis of the SME’sHowever, this lack of awareness is not the result of Innovation Management and after it has receivedinsufficient information about the importance of in- the first consulting services. IMP³rove discoverednovation at SMEs. Discussions with IMP³rove part- evidence for this need for Innovation Managementners showed that SMEs increasingly receive infor- consulting while investigating the impact of the im-mation about innovation from a variety of sources, plementation of the IMP³rove consulting workshopssuch as media and conferences. This is only slowly in the so-called IMP³rove field test in 2008 andcausing a change in SMEs. It still needs to increase 2009. First, SMEs completed the online IMP³rovethe understanding of the importance of Innovation assessment with the support of a trained IMP³roveManagement and Innovation Management consult- consultant and received the IMP³rove benchmark-
16 High-Impact Innovation Management Consulting Services for SMEs ing report. In a follow-up workshop, the IMP³rove These results underscore the value of high-quality consultant discussed strengths and weaknesses Innovation Management consulting services for with the SME manager and developed a high-level SMEs. These consulting services can significantly roadmap to improve the SME’s Innovation Manage- shape an SME’s business performance. The need ment performance. Indeed, many SMEs didn’t see for Innovation Management support regularly un- the full value of the external consultant when they folds after the SMEs have first gained experience started the journey towards a higher proficiency with consultants who take a holistic and systematic in Innovation Management. However, short-term perspective toward Innovation Management―thus feedback after the first consulting workshop uncov- creating value for the SME. ered the benefit of external support for Innovation Management. Nearly all 829 SMEs that provided Interviews of consultants associated with IMP³rove short-term feedback stated that the consultant had support the need of SMEs for professional support customized the services to their needs. in Innovation Management. A survey of IMP³rove consultants associated with IMP³rove performed In addition, only 10% indicated that they would in 20116 indicates that more than 80% of consult- not continue to work with the consultants. In other ants who participated in the survey consider Innova- words, more than 800 SMEs saw the potential for tion Management a very valuable service for SMEs. continuing the collaboration with an external ad- However, these consultants also reported that SMEs visor. Some SMEs also participated in a long-term are rarely willing to make a financial investment in evaluation of the impact of the consulting services Innovation Management consulting services. Even if after 12 months. Out of 94 SMEs that assessed their SMEs invest in support services, they tend to use only Innovation Management performance via IMP³rove a little of their own money (service fees equalling the and were supported by an IMP³rove consultant, 74% workforce costs of less than four working days). showed a highly positive response towards the im- pact of Innovation Management consulting services. 4.1.4 EXTRINSIC DEMAND FOR INNOVATION One year after the completion of the IMP³rove con- MANAGEMENT SUPPORT IN SMES sulting workshop, they stated that the recommen- dations of the IMP³rove consultant had a significant The need for Innovation Management support ser- impact on their company’s business (see Figure 9). vices is indisputable; however, there is only very Figure 9: Perception of Short-term and Long-term Impact of Innovation Management Consulting by SMEs (IMP³rove Database; Status as of October 2009) 6 IMP³rove online survey in 2011 based on 35 consultant feedbacks, performed by the IMP³rove Global Coordination Team
High-Impact Innovation Management Consulting Services for SMEs 17little intrinsic demand for Innovation Management the demand for Innovation Management supportconsulting. Public actors and public agencies try services is triggered externally. For example, servic-to stimulate demand for Innovation Management es such as an Innovation Management assessmentconsulting because they are aware of the need for to analyse the Innovation Management capabilitiesprofessional Innovation Management in SMEs. In- of SMEs are a mandatory element in the applicationdeed, publicly supported activities and public pro- process. In France, two public institutions use thegrammes in the area of SME innovation play an in- IMP³rove services in the decision processes for allo-creasing role in stimulating demand for Innovation cating grants for innovation projects to knowledgeManagement consulting. intensive SMEs in the energy sector.Discussions with IMP³rove partners highlighted that Because of the importance of public support in themany privately owned consultants see public grants area of Innovation Management consulting in SMEs,as an important trigger for winning assignments some of the IMP³rove-associated consultants take anwith SMEs. Publicly supported Innovation Manage- active part in the discussion in policymaking in thement consulting services offer SMEs the opportunity area of regional, science and technology or enterpriseto benefit from these services―usually limited to policy. Consultants from various countries suggesta small number of consulting days―without invest- an integration of Innovation Management support ining the SMEs’ own money. Thus, consulting services public support programmes, such as via innovationon Innovation Management that are publicly sup- vouchers. Such policy measures can address the needported are more regularly requested. The IMP³rove for Innovation Management support in SMEs.project revealed that there is a range of regional andnational programmes that offer free or subsidizedInnovation Management consulting services. Public 4.2 Addressing the SME Needs:actors offer these subsidized Innovation Manage- Offerings of Innovationment consulting services for at least two reasons:First, SMEs may become aware of the importance of Management ServiceInnovation Management and take action in the area Providersof Innovation Management. Second, these free con-sulting services may also present an opportunity for IMP³rove highlights a variety of consulting servicesSMEs to request follow-up consulting services. For in the area of Innovation Management that addressexample, a free-of-charge assessment and a first SMEs’ need for Innovation Management consult-follow-up consulting workshop have triggered SMEs ing. These services are offered by both private andto invest time and, depending on the design of the public organisations. Recent trends in the area ofsupport policy, also money for follow-up Innovation Innovation Management consulting services showManagement consulting services. that publicly supported organisations become more active and move from awareness-building towardSome public agencies go one step further and in- impact-oriented Innovation Management consult-clude Innovation Management support services in ing services―a trend that puts privately ownedprogrammes and public grants for research and consultancies under pressure to move further todevelopment activities or other project-specific high-value consulting services.support services that are of high value for SMEs.Many SMEs regularly seek access to financial sup- 4.2.1 THE VARIETY OF SERVICEport for individual innovation projects.7 Policymak- OFFERINGS OF INNOVATIONers combine these support programmes designed MANAGEMENT CONSULTANTSfor individual innovation projects with measuresto increase the proficiency in Innovation Manage- Organisations that provide Innovation Managementment of those SMEs applying for project-focused support services to SMEs are very diverse and of-innovation support. This ensures that public money fer a vast array of services. They vary in terms ofspent in the area of research and development is size, age and areas of expertise and in the tools andactually turned into value. Thus, in some new public methods they use. The IMP³rove network showsprogrammes in countries such as France, Hungary that trade associations, chambers of commerce,or Ireland, SMEs are required to provide evidence of regional business development agencies, researchtheir proficiency in Innovation Management before institutes, business schools and others are also ac-they receive funding for their R&D projects. Here, tive in Innovation Management support services. Topics with highest consulting demand on R&D and innovation activities by SMEs based on the results of the DIHK innovation7 report 2010
18 High-Impact Innovation Management Consulting Services for SMEs About 600 innovation support service providers are and classify as other special services in Innovation associated with IMP³rove. Services offered by these Management. Examples of these special services, organisations can be classified as follows: which were mentioned more than once in the ser- vice profile of associated IMP³rove partners, are • Innovation Management consulting servic- business modelling and business development, es, consisting of special and targeted inno- training and coaching, market research, Innovation vation support services, such as consulting Management software development and informa- for improving the SME’s innovation strategy, tion management, technology management and innovation organisation and culture and in- quality management. These lists underscore the novation life cycle management processes diversity of service offerings included in Innovation • Innovation enablers, which include offer- Management consulting. ings regarding expertise on specific top- ics that enable innovation targets to be Figure 10 provides an overview of services offered reached: project management related to by consultants that are registered on the IMP³rove innovation projects, financing, human re- platform based on their individual profiles. “Innova- sources, and risk management, intellectual tion strategy” is the most dominating service offer- property rights, knowledge management ing among the IMP³rove consultants. Out of 568 • General management consulting services, consultants, about 70% state that they offer inno- focusing on business planning, strategic vation strategy consulting services in their service planning, controlling, organisational and portfolio. 8 This suggest that consultants consider cultural issues innovation strategy an important area in which they have built expertise over time and where they see In addition, associated IMP³rove partners present a great need and opportunity for future demand additional fields of activity in their service profile (or demand creation) in Innovation Management in that complement these three groups of services SMEs. Given the results from the IMP³rove database Figure 10: Distribution of Consulting Services of IMP³rove Consultants as percentage of 568 Associated Consultants (IMP³rove Database; Status as of September 2011) 8 IMP³rove Core Team 2011; from a total number of 568 consultants registered in the IMP³rove platform
High-Impact Innovation Management Consulting Services for SMEs 19showing less than 30% of SMEs having an Innova- 4.2.2 PRIVATELY OWNED INNOVATIONtion Strategy, there certainly is a need. In contrast, MANAGEMENT CONSULTANTSonly 20% of the IMP³rove consultants show exper- UNDER PRESSUREtise in the area of intellectual property rights. The landscape of Innovation Management sup-In addition, associated IMP³rove partners present port covers both privately owned and public ser-additional activities in their service profile that vice providers. IMP³rove shows that there are alsocomplement the above mentioned three groups of hybrid forms among Innovation Managementservices and classify as other special services in In- support organisations, such as public-privatenovation Management. partnerships and non-profit organisations. In ad- dition, intermediary organisations have becomeFigure 11 provides an overview of other services of- active in the area of Innovation Management sup-fered by Innovation Management service providers. port and consulting services. A closer look into theThey range from areas such as change manage- IMP³rove-associated network partners revealsment to corporate finance and business modelling. that private consultants are under pressure. Pub-At the same time, it highlights the fragmentation of lically supported consultants and intermediary or-Innovation Management consulting services and of ganisations are changing their services portfoliothe terminologies used to describe different service and actively entering the Innovation Managementofferings. consulting business. Figure 11: Other Fields of Activities of Associated IMP³rove Consultants (Based on 568 consultants; IMP³rove Global Coordination Team; Status as of September 2011)
20 High-Impact Innovation Management Consulting Services for SMEs As shown in Figure 12, 84% of associated IMP³rove offerings of 568 associated IMP³rove consultants, consultants classify themselves as privately owned data reveals a high similarity among both groups. consulting companies. The remaining 16% repre- This highlights that private and public support con- sent a mix of public organisations and non-profit sultants compete with similar service portfolios. support service providers, such as research organi- Assuming that many publicly supported organisa- sations, trade associations, chambers of commerce, tions offer their services at a lower price (or even technology transfer centres and universities. for free), private consultants can hardly compete on price and need to focus even more on value- A closer look reveals that the line between private creating services to win clients (see Figure 13). and public is blurry. When looking into the service Figure 12: Distribution of IMP³rove Consultants across Different Organisation Types (IMP³rove Database; Status as of September 2011) In addition, intermediaries active in the area of represent public organisations; 39% are privately technology and innovation―such as chambers owned organisations, such as private associations, of commerce, technology transfer centres, clus- private business schools and knowledge institu- ter organisations, industry associations, innova- tions; 14% are privately owned but receive public tion and regional development agencies and many funding from governmental sources. Thus, 60% of more―have moved from information services and IMP³rove intermediaries are publicly supported or- awareness-creating activities toward innovation ganisations (see Figure 14). support and consulting services for SMEs. However, these intermediaries are regularly publicly sup- Intermediaries associated with IMP³rove offer vari- ported and usually do not perceive themselves as ous support services for Innovation Management consultancies. and in related topics, such as technology transfer and networking. Out of 81 organisations that are registered as intermediaries on the IMP³rove platform, 47%
High-Impact Innovation Management Consulting Services for SMEs 21 Figure 13: Service Profile – Comparison of Private versus Public Organisations9 (IMP³rove Global Coordination Team, Status as of September 2011) Figure 14: Classification of IMP³rove Intermediaries by Type of Organisation (Status as of September 2011)9 IMP³rove Core Team 2011; Based on 568 consultants registered in the IMP³rove platform
22 High-Impact Innovation Management Consulting Services for SMEs Figure 15, 75% of the registered IMP³rove inter- in transferring technological knowledge, methods mediaries consider Innovation Management sup- of manufacturing or skill transferring to different port services as their main field of activity. In this types of organisations such as SMEs, universities field, they report a strong expertise in innovation and governmental entities with the goal of ensuring assessments, trainings and workshops in Innova- further scientific and technological developments. tion Management, as well as innovation financ- To support them in the start-up phase of their new ing. The second most important field of activity of venture, 57% of intermediaries offer services to these intermediaries is technology transfer. Here, knowledge-intensive or technology-oriented start- 67% of intermediaries report a strong expertise ups such as workshops and trainings. Figure 15: Services Offered by Intermediaries based on the IMP³rove Platform (Status as of September 2011) Figure 16: Services Offered by Intermediaries by Type of Organisation based on the IMP³rove Platform (Status as of September 2011)
High-Impact Innovation Management Consulting Services for SMEs 23As shown in Figure 16, 87% of public organisa- Surprisingly, workshops and trainings seem to playtions among the IMP³rove intermediaries offer In- a rather limited role in most countries, except fornovation Management support services. Interest- Finland, which scores highest in workshops andingly, only 63% of intermediaries that are privately trainings for knowledge-intensive service compa-owned state that they are offering support services nies and for Innovation Management workshops.in the area of Innovation Management. Publicly These workshops and trainings are powerful meanssupported intermediaries show a higher activity in of creating awareness and educating SME manag-services for entrepreneurs and start-ups: 74% of ers to understand how Innovation Management ispublicly supported intermediaries associated with influencing their business performance (see Fig-IMP³rove offer trainings and workshops for entre- ures 17, 18 & 19).preneurs, while only 41% of private intermediariesoffer start-up support. Analysing this overview of services offered by in- termediaries is often driven by public programmesThese results underscore that intermediaries have as well as by the strategic objectives that theserealized that Innovation Management consulting organisations have. Competition among variousservices are crucial for SMEs in Europe. Thus, they Innovation Management support service providershave moved away from concentrating on tradition- should yield higher service quality and thereforeal intermediary services, such as information days higher impact on the innovation performance andand networking in the area of technology transfer, competitiveness of the SMEs as the beneficiariesand take a more active position in Innovation Man- and customers for these services. It is expectedagement support. In particular, publicly funded in- that high value-adding will increase SMEs’ demandtermediaries have the opportunity to address the for these innovation support services.need for Innovation Management consulting viafree-of-charge services offerings. 4.3 Creating Demand forIMP³rove covers intermediaries from various coun- Innovation Managementtries. One might assume that, in some countries,intermediaries might have more actively shifted Consulting Servicestowards Innovation Management support serviceswhen compared to other European countries. A IMP³rove provides insights that indicate key play-large proportion of IMP³rove intermediaries can ers in the innovation ecosystem can increase thebe found in France, Spain, Finland, Germany, Italy demand for Innovation Management support. Thereand the United Kingdom. Data from the IMP³rove are very different sources: investors and customersdatabase indicate that intermediaries in Finland, of the SMEs, competitors or innovative policies forItaly and Germany are very active in Innovation Innovation Management support. Role models of anManagement support services. In these countries, industry and frontrunners in the SME’s business canthe pressure on private consultants is high. Here, also create the demand for Innovation Managementintermediaries can offer subsidized services in the consulting in order to catch up with the leaders.area of Innovation Management consulting, andthus, they can stimulate and impose the demand 4.3.1 FINANCIAL ACTORS CREATINGfor Innovation Management consulting. In addition, DEMAND TO STRENGTHEN THEIRintermediaries can leverage their existing relation- PORTFOLIOships with their SMEs and offer customized Innova-tion Management consulting services. Financial actors strive to increase the value of their investments. Innovation Management is a keyIn all countries, Innovation Management support driver for achieving this value growth. In the past,services score very high. In Finland, the focus on financial actors relied on traditional measures suchInnovation Management workshops is very high; in as cost cutting and financial engineering to achieveItaly, the network services play a major role. There, value growth. In recent years, IMP³rove has shownhowever, Innovation Management workshops are that financial actors begin to understand the val-less frequently offered by intermediaries. In the ue of Innovation Management as a growth driver.United Kingdom, the intermediaries put strong One of the key objectives of financial investors isemphasis on Innovation Management support, in- to increase the value of their investment. There-novation assessments and technology transfer. fore, Innovation Management becomes a powerfulGermany has a more equal spread across the vari- lever when managing the investment portfolio forous services. In all countries, innovation financing increasing value. Financial actors are seeking pro-offered by intermediaries ranks rather low. Spain fessional support to develop their portfolio compa-shows the highest percentage with 11%. nies. Innovation Management consultants become
24 High-Impact Innovation Management Consulting Services for SMEs Figure 17: Distribution of Services by Intermediaries by Country (IMP³rove Database; Status as of September 2011)
High-Impact Innovation Management Consulting Services for SMEs 25 Figure 18: Overview on Intermediaries’ Support Services with Explicit Focus on Innovation Management; Figures in Percent of Intermediaries Offering this Service (IMP³rove Database; Status as of September 2011)important partners in the various phases of the for high-impact Innovation Management consultinginvestment cycle. During due diligence, a consult- services. Access to qualified Innovation Manage-ant can use the IMP³rove assessment to assess ment consultants helps investors reduce their in-the potential for value creation from better Inno- vestment risk.vation Management. Once the company has beenintegrated into the investor’s portfolio, the Innova- IMP³rove has provided some case examples oftion Management consultant can help exploit the the value of Innovation Management consultantsvalue potential. It is an extrinsic demand at SMEs for portfolio and fund management. In one case,
26 High-Impact Innovation Management Consulting Services for SMEs Figure 19: Overview on Intermediaries’ Support Services without Explicit Focus on Innovation Management; Figures in Percent of Intermediaries Offering this Service (IMP³rove Database; Status as of September 2011) a German financial actor applied IMP³rove to sup- gic partners for innovative value propositions was port the management of its mutual investment defined as an important measure to create value. fund. With the support of an accredited IMP³rove Concrete action plans were developed in partner- consultant and expert in Innovation Management, ship with the IMP³rove consultant in order to grow strengths and weaknesses of the SME’s Innovation the firm of the investment fund. In this case, the Management were revealed. For example, results investment fund created the demand for external showed that the SME lacked the capability to in- Innovation Management consulting services for the novate and would need a solid stream of innovation SME. Another case example where financial inves- that must come from both external and internal tors were involved is presented in Chapter 5. resources. Leveraging the capabilities of strate-
High-Impact Innovation Management Consulting Services for SMEs 27For financial actors IMP³rove offers support in rently looking for new solutions. During the com-identifying innovative SMEs and in improving the pletion of the IMP³rove assessment, the customerInnovation Management capabilities of the SMEs. also learned about the supplier’s Innovation Man-These SMEs might apply for loans or financial in- agement processes, and where they could providevestment. They might be already in the portfolio of new ideas in the idea management process of theirthe financial actor or become part of the portfolio. suppliers, deepening the supplier/customer rela-For financial actors it is of value to know whether tionship. The role of the Innovation Managementthe SME qualifies as innovative company for which consultant in a supplier IMP³rove assessment is toguarantee programmes are available to reduce the facilitate the process, manage expectations and toinvestment risk for the financial investor. ensure a constructive discussion on innovation top- ics where both parties will benefit from.Financial actors can also directly manage theirportfolio via the IMP³rove platform and also invite For supplier-driven Innovation Managementan IMP³rove trained consultant to perform an as- IMP³rove offers support to enterprises who wish tosisted IMP³rove Assessment with one of their port- evaluate their supplier base in terms of Innovationfolio companies and provide Innovation Manage- Management capabilities. This supplier Innovationment consulting services to the portfolio company. Management assessment can be performed for ex- isting suppliers or for potential suppliers.4.3.2 SME CUSTOMERS CREATING DEMAND TO IMPLEMENT 4.3.3 POLICYMAKERS STIMULATING INNOVATION IN THE VALUE CHAIN DEMAND BY INCREASING THE PROFICIENCY OF INNOVATIONIn many industries, SMEs are not directly exposed MANAGEMENT CONSULTINGto the end consumer but are positioned at the frontend of the value chain. Often, the SMEs’ custom- As pointed out above, policymakers play a crucialers are large clients. In the past, these large firms role in stimulating the demand for Innovation Man-were perceived as the dominant force in innovation. agement consulting and support services. Recently,Today, we see a shift toward the locus of innovation public programmes pay more attention to mana-along the value chain. When innovating, large firms gerial aspects of innovation. For example, theyreduce their own innovation efforts and purposely include Innovation Management in the applicationinvolve other actors up and down the value chain. process for research and development grants toThey move from “build to print” to “collaborate to ensure that project-related funding is allocated toinnovate.” As a result, the nature of existing and SMEs with a high proficiency in Innovation Manage-new supplier relationships has changed. In the past, ment. IMP³rove has highlighted that the impactrelationships were characterized by transactions; and success of such public support programmestoday, relationships are more about innovation. Be- also hinges on the mechanism to select the rightcause innovation is more risky and uncertain, man- external consultant and support service provider.agerial capabilities of innovation are important. As In addition, the qualifications of the support ser-a natural step, SMEs’ customers pay more attention vice providers that are entitled to act as Innovationto the Innovation Management capabilities and re- Management consultants influence the impact ofquest SMEs to be proficient in managing innovation the public programme.at strategic, operational and cultural level. As partof their supplier and partner management, they ask The implementation of Innovation Managementfor transparency of the SME’s Innovation Manage- processes in SMEs requires that the right approach-ment performance and continuous improvement of es be carried out by Innovation Management con-the SME’s Innovation Management. External and sultants who have both the expertise and the rightin-house Innovation Management support and con- tools. The consulting service providers need to be atsulting plays an important role in providing trans- least T-shaped. Specialized knowledge in a specificparency and helping the SMEs continuously im- area of Innovation Management, such as innova-prove their Innovation Management performance. tion financing or other innovation enabling factors, is not enough. General knowledge in all dimensionsThe IMP³rove assessment has been successfully of Innovation Management – ranging from strat-applied in evaluating suppliers’ Innovation Man- egy, organisation and culture, innovation lifecycleagement. Both, the SME supplier and the customer processes and enabling factors to innovation re-gained new insights on the strategic focus in In- sults – is required and should complement theirnovation Management as well as in operational ac- specialized expertise. In addition, consultants whotivities. In one case example the customer better work with SMEs must be proficient in designing andunderstood the areas where their supplier is cur- delivering consulting services in an impact-oriented
28 High-Impact Innovation Management Consulting Services for SMEs manner. Solving problems in Innovation Manage- to work with an external Innovation Management ment is not a trivial task and requires capabilities consultant may also result from good practice ex- in systematic problem-solving, in consultant rela- amples in a related industry. Indeed, manufactur- tionship management and the ability to customize ing firms can be inspired to take action in Innova- Innovation Management support services toward tion Management by firms in the services sector. the SME’s needs. Policymakers that develop the IMP³rove offers the opportunity for such cross-in- capabilities of Innovation Management support dustry benchmarking, which can trigger a change service providers and ensure continuous quality in the SME’s Innovation Management. In addition, management can achieve a higher acceptance of Innovation Management consultants often have ex- their programmes, higher impact and higher satis- perience in various industries and thus can provide faction from SMEs. Satisfaction and positive expe- insights into the leading practices of front-runners rience with an Innovation Management consultant from various sectors. can further stimulate real demand for Innovation Management support services by SMEs. IMP³rove offers those who take the role of front- runners, such as cluster managers or trade asso- For policymakers IMP³rove offers both support in ciations support in designing the best way to effec- the design of effective innovation support pro- tively involve SMEs in their activities to stimulate grammes and a proven approach as basis for their innovation and competitiveness. IMP³rove Contests voucher schemes stimulating innovation and com- and Awards are an effective approach to mobilize petitiveness of SMEs. With international and na- many SMEs and give them a platform to present tional benchmarking of Innovation Management, their Innovation Management capabilities. professional support for developing the Innova- tion Management capabilities of SMEs to increase their competitiveness and thus contribute to social 4.4 Success Factors for value IMP³rove increases the effectiveness of these Meeting Demand voucher programmes. Innovation Management consultants demonstrat- 4.3.4 ROLE MODELS, FRONT-RUNNERS ing good practices are well prepared and informed AND COMPETITORS TRIGGER SMES about the clients’ context. They provide SMEs with TO TAKE ACTION a good understanding about Innovation Manage- ment before starting to assess their performance. Financial actors, customers and policymakers are Examples of success factors are: not the only players that trigger SMEs to take a se- rious step towards improving their Innovation Man- • Face-to-face interaction agement and working with Innovation Management • Customization of support services consultants. Role models and front-runners both • Long-term relationship building in the own industry and in related industries also • The consultant’s capability in complex prob- prompt SMEs to take action. If competitors outper- lem solving and value delivery form their own firm and have significantly improved their business performance, SMEs are usually curi- Personal interaction and face-to-face service de- ous to learn how they keep up with the competi- livery were key success factors for consultants tion. Champions within their own industry―those working with IMP³rove. Consulting services should with the highest profitable growth from Innovation be offered through face-to-face meetings. As the Management―represent an important role model case examples in the following chapters highlight, for the SMEs’ managerial practices of innovation. personal discussions create interest at the SME IMP³rove showed that if SMEs identify that there to gain more value from improvement measures. is a significant gap between their own firm’s Inno- Face-to-face interaction builds trust, which is a key vation Management performance and the perform prerequisite for high-impact Innovation Manage- ance of the top firms in their industry, then SMEs ment consulting. start thinking about concrete actions more serious- ly. In addition, transparency about the performance Successful consultants are aware of the relevance gap can stimulate the demand for external sup- of customized consulting services. With customized port from an Innovation Management consultant. approaches, IMP³rove consultants prepare for the External experts create an objective view of SMEs’ discussion with the SME, taking into account the Innovation Management performance and play an relation between the different dimensions in In- important role in helping SMEs catch up with the novation Management, and address potential root competition. Besides role models and front-runners causes. In turn, they take the opportunity to start in their own competitive environment, the trigger developing potential improvement measures with
High-Impact Innovation Management Consulting Services for SMEs 29the client by preparing a customized action planwith clearly defined targets and key performanceindicators (KPIs). In doing so, consulting companiesare forced to adapt themselves to the SMEs’ needs.This requires diverse Innovation Management toolsand techniques to give SMEs a visible competitiveedge. The consulting process must be efficient andcustomized to be in line with the SME’s ambition,time, budget and other resources, without neglect-ing follow-up activities with clients.Long-term relationships and regular follow-upmeetings have proven their value; Innovation Man-agement consulting services should focus on value-creation for the SME. This type of practice shouldbe more widely spread among Innovation Man-agement consultants for meeting SMEs’ expecta-tions of high-value consulting services. Successfulconsultants propose a compelling consulting valueproposition and implement it in an impact-orientedmanner.
30 High-Impact Innovation Management Consulting Services for SMEs 5. Meeting the Current Demand of SMEs for Innovation Management Consulting Services SMEs are often reluctant to hire Innovation Man- consulting is the effective support for further de- agement consultants. There is insecurity about veloping all or selected dimensions of Innovation what Innovation Management actually is, what im- Management for sustainable and profitable SME pact it has on the company’s business performance growth. These dimensions of Innovation Manage- and how it can be improved. Then there is the ques- ment include: tion of what impact and benefit an Innovation Man- agement consultant might have for helping improve • Innovation strategy performance. The following chapters describe the • Innovation organisation and culture dimensions of Innovation Management and explain • Innovation lifecycle processes how an experienced, professional Innovation Man- • Innovation enabling factors agement consultant can effectively support SMEs. • Innovation results Case examples illustrate the impact of high-value Innovation Management consulting. In the A.T. Kearney House of Innovation, these di- mensions are integrated in a systematic manner. The A.T. Kearney House of Innovation is holistic in 5.1 The Dimensions of the sense that it covers all aspects of Innovation Management and all elements are interlinked. It Innovation Management clearly focuses on generating value and asks for Innovation Management consulting is far more than performance indicators that monitor the contribu- supporting SMEs in applying for public grants or in tion to the company’s value. transferring technology. Innovation Management Figure 20: A.T. Kearney House of Innovation
High-Impact Innovation Management Consulting Services for SMEs 315.1.1 SETTING THE DIRECTION WITH should help the SME management develop possi- INNOVATION STRATEGY ble scenarios and clear plans for their future. This helps the SME managers understand the potentialThe innovation strategy is based on the company’s developments in their markets, in their industry andvision, formulating what its overall aim is as an in- of their competitors. Trends are one of the drivingnovative player in its markets. In SMEs, this vision forces for scenarios. For example, a consultant mayis often in the mind of the company’s owner or CEO ask what kind of impact the ageing society, the un-but is rarely put into writing and communicated to employment of young employees or the significantall employees. However, those visions create the increase of cars manufactured in China might havemomentum and feed the persistency within SMEs on the SME’s business.to continuously innovate. The vision of Bill Gates –a computer in every household – was the basis of Based on these scenarios, the search fields and theirMicrosoft’s success when it was an SME. specific focus have to be developed. If the SME is an automotive supplier, the search field e-mobility mightThe innovation strategy must be derived from be a key for future success. Then the next questionthe company’s overall vision. The following steps is: What is the specific focus within e-mobility thatmust be taken for successful development and the SME should focus on? Knowing the specific focusimplementation: then helps assess the SME’s internal capabilities for developing innovations in this defined search field asConsultants supporting the SME in developing the well as the current project pipeline.innovation strategy need to help the SME under-stand the benefits of such an effort. Consultants, In the last step, the consultant helps describe thetogether with the SME’s management, need to as- SME’s innovation strategy and document it, clearlysess the SME’s current situation in terms of compet- defining the objectives of the innovation strategyitive position and competitive pressure. This might and the roadmap for achieving these objectives.result from low-cost competitors or from changes Part of these objectives is the improvement of thein technology or legal requirements. Equally as SME’s business performance. Here, the consultantimportant as the external view of the current situ- can demonstrate his or her quality of service andation is the internal view. Consultants should ask qualification when he or she helps the SME man-the SME’s management for their level of ambition agement define the new business targets and howto leverage Innovation Management. Some SMEs to reach them. Within IMP³rove consulting, the con-have constraints regarding budgets to invest in In- sultant has to prove the business case for develop-novation Management. Others do not want to take ing the SME’s innovation strategy. Ideally, the con-too much risk with too many radical innovations sultant also explains how this innovation strategybecause they lack the capabilities to successfully affects the organisation and each employee.master all these innovation projects. This leads the consulting services to the next di-When the level of ambition in relation to the cur- mension of the A.T. Kearney House of Innovation:rent SME’s situation is defined, then the consultant the innovation-oriented organisation and culture. Figure 21: Innovation Strategy Development Process
32 High-Impact Innovation Management Consulting Services for SMEs 5.1.2 DRIVING THE INNOVATION STRATEGY one who made the mistake and the willingness and WITH AN INNOVATION-ORIENTED leadership to take risks and reward those who took ORGANISATION AND CULTURE those risks. Consultants who help SMEs develop the innovation organisation and culture need to The defined innovation strategy must be brought to prove the benefit of such activities. For example, life by the SME’s entire organisation. Within lead- idea generation and idea management will become ing innovative companies, innovation is not the task more effective and efficient when employees know of the boss or of the R&D department but involves what the search fields are into which their ideas each and every employee. At the same time, Inno- need to fit. Employee motivation increases when vation Management must focus on value creation. employees see that their ideas are translated into innovation projects. This also has an impact on the SMEs that initiate innovation and perceive value overall performance of the entire innovation life growth as a nice side effect are usually at the be- cycle management. ginning of their journey to developing a strong in- novation organisation and culture. Each employee 5.1.3 TIME-TO-PROFIT: DEFINING THE needs to understand how he or she can contribute INNOVATION PROCESS (LIFE-CYCLE to the defined innovation strategy and how it is re- MANAGEMENT) lated to his or her job. If ideas from employees are hardly ever used for innovations, there might be The innovation strategy defines the areas that need a mismatch between the SME’s innovation strategy new ideas, which will be transformed into innova- and the employees’ perception of the strategic di- tion projects that will result in new products, ser- rection of the company. An Innovation Management vices or business models. For any SME, it is critical consultant can help close this gap. to keep the time to profit―the period between the first idea and break even – as short as possible. Establishing a high-performance innovation or- ganisation and culture requires an environment of Many SMEs can improve the effectiveness and ef- trust that new ideas are welcome, an atmosphere ficiency of their innovation lifecycle processes with of learning from mistakes rather than blaming the professional support. The innovation strategy pro- Figure 22: Patterns in Innovation Culture
High-Impact Innovation Management Consulting Services for SMEs 33 Figure 23: Innovation Life-Cycle Managementvides clear criteria for selecting the right ideas to be lectual capital management to performance man-further developed. A systematic innovation pipeline agement, human resource management, designmanagement ensures that the innovation projects and project management and financing. For theare in line with the growth targets and the compet- individual Innovation Management consultants, it isitive pressure as well as with available resources almost impossible to maintain a high level of pro-and capabilities to execute the innovation projects. ficiency in all these areas. Connecting with otherConsultants will also support the SMEs in defining experts to serve the SME client in the best possi-clear targets for their innovation projects in terms ble manner is not yet very common, but it createsof time, budget and expected quality. innovative approaches in the knowledge-intensive services (KIS) sector, such as consulting.The entire innovation lifecycle requires a balancebetween investment and return on investment by IT and knowledge management ensure that thereducing the time to market and the time to profit. SME and its employees have access to the knowl-If the SME can manage the first phases of the in- edge that it has already created. Even in smallnovation project effectively and efficiently, then the companies, knowledge often resides only in heads,SME will still have enough resources and time to computers or drawers – where it cannot be sharedsuccessfully introduce the innovation in the mar- in a systematic manner. IT should facilitate easy ac-ket, while less well-managed SMEs have already cess to the knowledge and intellectual capital forexhausted their resources and often fail to reach those who need it, while at the same time protect ittheir growth targets. The Innovation Management against unauthorized access. Innovative companiesconsultant will explain this mechanism within the have processes in place that continuously updateInnovation Management lifecycle and will help the the knowledge. Here, the added value of an Innova-SME leverage it. tion Management consultant is to leverage the IT and knowledge or intellectual capital management5.1.4 INNOVATION-ENABLING FACTORS approaches that are already in place and define the THAT SUPPORT THE SUCCESS OF required changes and – most importantly – their INNOVATION MANAGEMENT impact on the SME’s overall business performance.The factors that enable innovation reach from in- Knowledge or intellectual capital management willformation technology (IT) and knowledge or intel- also provide transparency on the SME’s perform
34 High-Impact Innovation Management Consulting Services for SMEs ance. These performance measurements will be Design management is a powerful means for differ- based on clearly defined KPIs. They will measure entiating innovative products, services, processes the following: or business models. It is more than just a modern product design. The Innovation Management con- • Financial performance, such as profitability sultant can enrich the innovation strategy and the (for example, price versus cost in product SME’s brand by considering design management development, gross margin of product and aspects. A special support service can be part of cost savings in production), growth (such as the design as well as an appealing look of a new market share development of own product offering. or service versus competitive offerings, rev- enue growth and international coverage of By introducing superior project management skills, the new offering) and cost control (such as the Innovation Management consultant can sig- actual versus planned programme cost) nificantly increase the innovation results. Defin- • Customer focus, such as percent of annual ing time, budget and quality targets for each in- sales from new products, customer satis- novation project will help translate the innovation faction and complaint resolution strategy and growth targets into actions. Thus, the • Organisation performance, such as time organisation will be further aligned with the inno- to market, schedule compliance, first-time vation targets. A company should not consider it product quality and effectiveness (for ex- a failure if an innovation project is stopped when ample, the number of design iterations) the expected business target will not be met. Rath- • Innovation and learning, such as new er, such a case should be seen as an opportunity product innovation (for example, rate of to learn for the next innovation project. Innova- new product introductions compared to tion Management consultants assess the project competitor), service, process or business management performance of their clients and help model, technology leadership (such as them improve it. number of patents, number of new tech- nologies applied), innovation capabilities Many support providers are available to help SMEs (such as skill set enhancement) and cor- find the most suitable public funds for financing porate learning their innovation projects. These funds have the highest impact if they are spent on SMEs that al- HR management is a powerful tool for influencing ready have an Innovation Management system in Innovation Management performance. It ensures place that is linked to the SME’s business perform that the company recruits the right people with the ance. It is not sufficient that SMEs that have re- right skills. Further aspects include the compensa- ceived support from public funds grow in revenues tion scheme: whether employees are compensated and number of employees but not in profit. If they for new ideas or rather for preserving the current do not generate profit from their innovation, SMEs status. The Innovation Management consultant’s will never become independent from public support. task here is to show the impact of including Innova- tion Management issues in the overall HR manage- 5.1.5 FOCUS ON INNOVATION RESULTS ment. This will start with the integration of crea- tive and entrepreneurial skills’ assessment in the Innovation Management consultants’ most promi- recruiting process. nent task is to help SMEs focus on tangible Innova- tion Management results. This is essential during The consultant will also address the focus of the the phase of consulting support as well as after- incentive system on innovation. The compensa- ward, when the SME has implemented measures tion and incentive systems can stimulate – or to improve their Innovation Management perform stifle – an SME’s passion for innovation. Although ance. Tangible results include both qualitative and the focus is often only on financial compensation, quantitative outcomes. Improving an SMEs innova- leading companies are responding more and more tion culture with more management focus on Inno- to the individual preferences of their employees. vation Management as a qualitative improvement As opposed to a one-time bonus, what is often tool should lead to increased sales and profits from more rewarding to an employee is access to a lab innovations and ideally in an increasing number of or a test stand or more flexible time that can be employees. spent developing a new idea. The Innovation Man- agement consultant can support the translation Innovation Management consultants, together with of the innovation strategy into HR strategies and, the SME’s management, define the achievable re- at the same time, further develop the innovation sults right from the beginning. They take into ac- culture. count the company’s level of ambition in relation to
High-Impact Innovation Management Consulting Services for SMEs 35the competitive pressure, the company’s capabilities either directly or via intermediaries such as finan-and its resources. This will help create transparency, cial actors. As the case examples show, most SMEsmanage expectations and maintain focus on those were not seeking Innovation Management consult-measures that have highest impact. The following ing support. They either asked for general consult-section describes key success factors for a high- ing services or were introduced to these services viavalue Innovation Management consulting process. a publicly funded programme. Once an SME shows interest in consulting services, a clearly structured proposal should be presented to describe the steps,5.2 Value-Driven Innovation the expected results, the deliverables and the effort required from the company. Management Consulting Process The execution of the consulting project itself has three basic steps that follow the IMP³rove Innova-Value creation in Innovation Management consult- tion Management consulting process:ing has to take place in each step of the consult-ing approach for SMEs. Value from an SME’s point • Data collection and analyses providing theof view is created if the support services lead to SME with insights and transparency on itsincreased competitiveness and sustainable compa- main issuesny growth. If supported by public programmemes • Problem-solving and definition of meas-a public interest might be if jobs or other types of ures giving the SME a plan for overcomingsocietal value are created for example innovation identified weaknesses in their Innovationnetworks strengthened. Ideally, value for both the Managemententerprise and the policymaker is created. Recently, • Implementing measures to enable SME em-focus on results is increasing in the public sector. In ployees to adopt the changes and continu-the following section, the focus of the Innovation ously improve their Innovation ManagementManagement consultants’ support will be on theresults expected by the SMEs. The phase of follow-up and client relationship maintenance in the IMP³rove Innovation Manage-The three main steps of a value-creation Innovation ment consulting process supports the SME in em-Management consulting process should be: bedding the systematic Innovation Management in their organisation. At the same time, the Innovation • Client acquisition and proposal development Management consultant will inform the SME about • Execution of consulting process trends and new approaches. He or she will invite • Follow-up evaluation process the SME to a recurring IMP³rove assessment for further developing their Innovation ManagementThese three steps of the IMP³rove consulting pro- performance.cess include sub-steps that have clearly definedtargets and deliverables. During the first phase, the 5.2.1 CLIENT ACQUISITION ANDInnovation Management consultant will approach PROPOSAL DEVELOPMENTcompanies that are interested in further developingtheir competitiveness based on better Innovation To effectively acquire clients, consultants must firstManagement. He or she can approach the SMEs clearly identify the most promising target groups. Figure 24: IMP³rove Innovation Management Consulting Process
36 High-Impact Innovation Management Consulting Services for SMEs As experience from IMP³rove shows, clients for In- commercialize new products, services or business novation Management consulting services are not models resulting from these innovation projects only SMEs but also intermediaries, policymakers might not be fully developed because there might and financial actors. They all have very different ex- be a disconnect with the SME’s innovation strate- pectations regarding the consulting support. gy. The SME might not have access to the markets where there is a demand for this innovation, or the Small enterprises as the direct beneficiaries of the SME might face internal cultural barriers. A solution Innovation Management consulting services often here might be to first assess and improve the com- expect support free of charge. The notion that value pany’s Innovation Management capabilities before from consulting services should be compensated in the innovation project is launched. the same manner as maintenance services for the equipment is not very widespread. Intermediaries often aim to increase their reputa- tion as innovation support service providers. How- Innovation Management consultants report that ever, their targets are, in some cases, quantitative SMEs are reluctant to pay for professional Innova- ones. Reaching hundreds of SMEs per year with tion Management consulting services. Only if the a rather small team is not compatible with effec- consultant offers public funding for his own Inno- tive Innovation Management consulting support. vation Management consulting service is the SME This usually requires individual consulting over willing to accept these services. This embeds the a number of days and often weeks, and it requires risk that the SME will not fully adopt the advice and in-depth insights into the SME’s challenges. Offer- the support provided by the Innovation Manage- ing the SMEs insights into where these challenges ment consultant. It will create the question: How to are is only the first step. Giving them support for increase the impact of public funding? We have also improving their business performance in the long observed that consultants’ services mainly consist term requires different skills. of supporting SMEs in applying for public funding. If this is marketed under the label of Innovation In some cases, intermediaries compete with the Management consulting, then it is a misleading and private Innovation Management consulting market. only too narrow definition of Innovation Manage- They directly support SMEs in developing Innova- ment support services. The case examples provided tion Management capabilities. Being publicly fund- by IMP³rove consultants illustrate that professional ed, they are creating the expectations that these consulting services go far beyond support in apply- services should be rendered free of charge for the ing for public funding. They include the definition enterprises that benefit from the services. Experi- and implementation of recommendations and ac- ence shows that it is more effective to combine the tions that put the SME on the growth track. skills of the intermediaries and those of the Innova- tion Management consultants to offer the best sup- Medium-sized enterprises often have more experi- port for the SMEs and for maximum impact from ence in effectively using Innovation Management the publicly supported programmes. consulting services. Provided the Innovation Man- agement consultant is able to generate tangible When identifying clients and their expectations, the results, medium-sized companies are willing to pay Innovation Management consultant also needs to for the services, including the IMP³rove assess- understand and integrate as much as possible the ment, as experience has shown. challenges of the enterprise with the objectives of those who are financing his or her services. Intermediaries and policymakers who finance inno- vation support programmes for Innovation Manage- 5.2.2 DEFINING THE OBJECTIVES OF ment consultants’ clients are looking for maximum THE INNOVATION MANAGEMENT absorption of the public funding. This is defined by CONSULTING SUPPORT the number of beneficiaries (mostly SMEs), their ca- pabilities to innovate and the fulfilment of defined SMEs expect Innovation Management consultants objectives. In the context of developing SMEs’ com- to have ready-to-use solutions that have immedi- petitiveness and innovation capabilities, the number ate impact. In reality, these standard solutions usu- of SME innovation projects resulting from Innova- ally do not generate the desired impact. Therefore, tion Management support might be considered by the consultant must first manage the client’s ex- policymakers as criterion with high impact on the pectations that the best solution is based on the SME’s competitiveness. The risk here is that SMEs following: are pushed by the consultant to launch an innova- tion project to meet the targets of the publicly fund- • The SME’s level of ambition ed programme. However, the ability to successfully • The competitive pressure they have to face
High-Impact Innovation Management Consulting Services for SMEs 37 • The probability and risk of competition from For management, understanding the basic phases substituting technologies or services of the consulting process and their expected benefit • Availability of resources adds value. • The SME’s ability to drive and implement the required changes Explaining these basic rules to the SME client is essential for building a trustful client relationship.Therefore, the Innovation Management consultant Building this relationship on value creation ratherwill discuss these issues with the SME’s manage- than on efficient dissemination of public fundingment before developing the proposal for consult- will improve the SME’s readiness to seek Innovationing support. Creating transparency and reaching Management consulting support―and compensateagreement on the steps that will be taken and the the consultant for the value he or she has gener-added value of each of these steps is essential ated. Across Europe, this professionalization in thefor effective Innovation Management consulting interaction between the SMEs and the Innovationsupport. Management consultant is developing. Figure 25: Value Creation During All Phases of the Consulting Process PHASE VALUE Generating insights Transparency where the need for change is most urgent and/or most beneficial Developing the plan for improvement Common and agreed understanding what to implement, by whom, in which sequence and with which expected results Implementing the improvements Results – financial and non-financial – should materialize improving the SMEs Innovation Management performance and overall competitiveness5.2.3 DELIVERING VALUE DURING THE of this picture provides the most important facts CONSULTING PROJECT EXECUTION and findings, which become the basis for his or her conclusions, on which he or she will build theInnovation Management consulting is essentially recommendations to be discussed with the SMEa problem-solving exercise. It starts with gain- management.ing knowledge about the company’s situation andambition. The IMP³rove assessment is an excel- Professionalization of the Innovation Managementlent opportunity to develop this knowledge in consulting services requires that this analytical ap-a very structured manner and, at the same time, proach from facts to findings to conclusions to rec-generate benchmarks from competitors. During ommendations and actions is adopted much morethe completion of the IMP³rove questionnaires, widely than what can be seen today.the SME manager and the consultant deepen theirknowledge about the company’s performance The IMP³rove approach with its IMP³rove con-and aspirations. If the IMP³rove questionnaire sulting process supports this professionalization.is completed with the entire SME management IMP³rove Innovation Management consulting ser-team, then differences in the view of the Innova- vices start with a strong value proposition for thetion Management performance become obvious SME. Instead of a huge, expensive effort to assessand generally lead to a fruitful discussion about the competitive position with regard to Innovationwhat needs to be improved. As some of the case Management, the IMP³rove-assisted assessmentexamples in the following chapters show, the dis- offers the SME a thorough and well-structuredcussion becomes less defensive and more result comparison in Innovation Management perfor-oriented. mance with their peers. A three-day consulting in- vestment is only a fraction of what the SME wouldThe IMP³rove benchmarking report shows the SME need to spend to gain a similar detailed and struc-management a sober picture of the company’s tured feedback from comparison with competitorscompetitive position. The consultant’s analysis – if it is feasible at all.
38 High-Impact Innovation Management Consulting Services for SMEs Figure 26: Analytical Approach from Facts to Recommendations and Actions The consultant must clearly communicate this during the benchmarking process. It is not easy for value to the SMEs and – even more importantly – a successful SME manager to accept that there is deliver it. Interpreting the IMP³rove benchmarking room for improvement in his Innovation Manage- reports in a meaningful manner requires both the ment. Changing habits, procedures and processes is analytical rigor and the ability to communicate the associated with the threat of failure. Managers try facts, findings, conclusions and recommendations to avoid these risks for good reason. so that the SME can see the value added compared to their internal analysis. Even experienced service Consultants should avoid the trap of offering SMEs providers supporting SMEs based on public funding a set of tools without rigorously analysing each acknowledge that such a thorough, well-structured company’s unique situation. If they do, their recom- analysis requires a lot of experience and practice. mendations will either not be implemented or will At the same time, they also see the advantage of show limited impact because they don’t address such an approach. When providing initial feedback the SMEs most urgent issues. to the company, they realize the SME expects clear measures, indicating the impact that these meas- Professional Innovation Management consulting ures will have in relation to the investment required will enable the SME to successfully implement the from the SME. measures either on its own or with targeted con- sultant support. In both cases, a clear monitoring of To be motivated to engage in an Innovation Man- the achieved results should be based on quantified agement project, SMEs must understand this val- performance indicators that are linked to the SMEs ue. Therefore, the client relationship with the SME business targets. If an SME would like to expand starts with the information on how Innovation internationally and grow their business by x percent Management improves their business performance over the next three years, the sales, revenue and and competitive position. Workshops and seminars profit targets must be defined and tracked along explaining the drivers of high-performance Innova- with the investments and effort required. The con- tion Management are the first steps. The testimo- sultant might take the role of a coach who steps in nial of an SME that has successfully improved their when the defined targets are not met in time or to Innovation Management performance based on the the desired extent. IMP³rove approach is the most convincing evidence. Specifically, these SMEs acknowledge the value of Helping the SME reach the next level of competi- the IMP³rove benchmarking and the detailed re- tiveness is a solid basis for a long-term client re- port. They also appreciate the professional support lationship and for gaining reputation in the SME from the IMP³rove consultant, especially if he or client market. The IMP³rove approach is fostering she is also able to respond to psychological aspects this long-term relationship by inviting SMEs to
High-Impact Innovation Management Consulting Services for SMEs 39a recurring assessment, thus facilitating continu- fore, they either have to develop expertise in specif-ous improvement of their Innovation Management ic areas of Innovation Management or find ways tocapabilities. collaborate with public agencies, as Ticinotransfer has successfully done. Publicly funded agencies will5.2.4 FOLLOW-UP AND CLIENT support SMEs in the first phase of the Innovation RELATIONSHIP MAINTENANCE Management assessment and in developing a gen- eral roadmap. However, when it comes to specificFocusing on maintaining relationships with SME cli- Innovation Management consulting support, privateents is currently a trend in public agencies. During consulting companies will get involved.recent years, publicly funded Innovation Manage-ment support providers moved from short interven- In this example, the general Innovation Manage-tions with SMEs to maintaining longer-term rela- ment services by a public agency offering subsi-tionships. Agencies such as Scottish Enterprise or dized support educates the SME in state-of-the-artScience City in the United Kingdom and Ticinotrans- Innovation Management and, with the IMP³rovefer in Switzerland are moving in this direction. A assessment, offers an effective approach to theshift from pure information provider or technology competitive positioning of the enterprise. If thetransfer supporter to advisor is taking place. The company would like to improve their Innovationfocus on impact from support services is more and Management performance with internal resources,more driving public agencies to deliver services that then the public agency serves as a coach. When theincrease the number of jobs based on SMEs’ inter- SME is seeking specific external expertise in Inno-nationalization or absorption of new technologies. vation Management support, they can hire private consultants.Similarly the ‘SME instrument’ proposed as cen-tral element of SME innovation support for the EU For private consulting companies, the only way toResearch and Innovation Framework Programme get out of this competitive position is to deepen2014-20 will combine financial support to inno- their client relationships. A key success factor herevation projects with a mentoring and coaching is the business acumen that private consultantsscheme for the beneficiaries. need to have for their own business―not just look- ing into what the textbooks recommend but whatThis opens new opportunities but puts also pres- makes sense to meet the business targets the SMEsure on the private Innovation Management con- is striving for in the short and longer term. Thatsulting market. Depending on the local market helps to define a longer-term improvement pro-for Innovation Management consultancy services gramme where the consultant’s involvement mightpublic agencies developing their proficiency in In- be more intense in the beginning and targeted tonovation Management consulting might distort specific interventions later on to secure the busi-a functioning market, make accessible an existing ness success. It allows the consultant to supportproduct for new customers or even be the first to the SMEs in a more holistic way without stressingintroduce a new service product. Policy makers and the organisation too much at the beginning.public agencies wishing to develop the InnovationManagement capacity of SMEs should be aware of A professional client relationship also addressesthe potentially market-distorting effects of their the emotional aspect. Delivering value that exceedsactions. To minimise such detrimental effects pref- the SME’s expectations is difficult to beat by a thirderence should be given in regions with sufficiently party that is also offering Innovation Managementqualified consultants to programmes that stimu- support services. However, this requires that ex-late demand, like voucher schemes that subsidise pectations have been clearly defined, along withthe use of certified consultants. In regions with what will be delivered and what the SME can expecta generally functioning market for SME business based on the pre-determined objectives.consultancy but insufficient knowledge in Innova-tion Management demand side measures should be Client relationship management must definecomplemented with qualification and certification milestones that take the SME on their journey toprogrammes for consultants. Finally in those re- strengthened competitiveness based on improvedgions where SMEs address primarily public agents Innovation Management. Such milestones could befor consulting advice a clear case for building up the the recurring IMP³rove Innovation Management as-consulting competences in the agencies is given. sessment or the IMP³rove assessment on sustain- ability-driven Innovation Management. The resultsPrivate consultancies might nevertheless face situ- from these assessments provide an opportunity toations where they cannot compete on the fees for either evaluate the achievements or take the nexttheir services with public service providers. There- step toward improving the SME’s Innovation Man-
40 High-Impact Innovation Management Consulting Services for SMEs Figure 27: Shift in Value Propositions agement performance. In between, there should be a popular tool for studying a company. Consultants occasions where the achievements and successes implement trend scouting in SMEs to support their are celebrated. The Innovation Management con- innovation strategy development processes. Fur- sultant might share his experience with what might ther, survey tools for collecting data from a large work best given the SME’s culture and accomplish- number of employees can be used to analyse ments. Such trust-building activities build the foun- a firm’s innovation culture in more detail. To trig- dation for an advisory relationship and might then ger the change for innovation, consultants rely go beyond topics related to Innovation Management. on ideas from change management and perform workshops to describe the existing innovation cul- ture to identify the aspired innovation culture and 5.3 Access to Better reveal the barriers keeping the firm from getting to the aspired innovation culture. When address- Innovation Management ing problems in the innovation lifecycle dimension, Consulting Tools the Stage-Gate® model (Source: R.J. Cooper) is very common. It helps consultants establish a more sys- Innovation Management consultants come from tematic idea to launch process in SMEs. To foster different educational backgrounds and have diverse creativity and ideation, the classical brainstorming areas of specialization in Innovation Management. session is widely used. These broadly used tools do In addition, the landscape of Innovation Manage- not help consultants stand out from the crowd. ment consulting is characterized by a variety of tools and methods, varying in terms of scope, lev- At the same time, feedback from IMP³rove con- el of detail and required expertise to apply them. sultants highlighted that navigating in the jungle Some of them can be found in textbooks; others of tools and accessing high-quality tools is a chal- are specialized tools developed by consultants for lenge. Consultants seek to enhance their own their own services portfolio. However, consultants toolbox to better address the problems of their regularly struggle to create impact with the Innova- SME clients; they need and demand better tools tion Management tools that are available to them. for Innovation Management consulting. IMP³rove has shown that this need should be addressed in IMP³rove provided insight into the reality of using a threefold manner: tools in Innovation Management consulting with SMEs. For example, in the area of innovation strat- • Establish a holistic assessment framework egy, a breakdown of strengths, weaknesses, oppor- to build the basis for and enhance the use of tunities and threats―called a SWOT analysis―is other Innovation Management tools
High-Impact Innovation Management Consulting Services for SMEs 41 • Build bridges and hubs for exchanging tools Collaboration spaces and virtual exchange mecha- and motivating for further developments nisms are important to improving access to bet- • Offer training services that help consultants ter tools: They represent important levers for in- create real value when using Innovation creasing the availability of well-tested Innovation Management tools Management tools for SMEs because they bring together consultants from different backgroundsWork with more than 400 consultants in the with diverse tools and experiences. In addition, theyIMP³rove network highlighted one key success factor provide the basis for exchanging tools and recom-for better use of Innovation Management consulting mendations about where to find new Innovationtools: a comprehensive assessment methodology Management tools and when to use them. Theythat seamlessly links with other tools and meth- foster the collaboration among Innovation Manage-ods for a specific dimension of Innovation Manage- ment consultants, build a new market for Innova-ment. The IMP³rove assessment offers an evaluation tion Management tools and create opportunities formethod that addresses all relevant areas in Innova- joint efforts for further developing existing tools.tion Management – innovation strategy, innovation The IMP³rove toolbox - an online repository of toolsorganisation and culture, innovation lifecycle pro- for Innovation Management - and the IMP³rove on-cesses, enabling factors and innovation results. The line consultant network represent a first step to-benchmarking reports highlight the key strengths ward such a collaborative exchange mechanism.and weaknesses and provide the starting point fordeveloping an improvement roadmap. The diagnostic A variety of tools can be found in the IMP³rove In-design of the assessment not only provides a holistic novation Management toolbox for the IMP³rove plat-analysis of Innovation Management but also creates form, which has been set up in a joint effort by thethe opportunity to easily link a consultant’s own tools IMP³rove Global Coordination Team and associatedand methods with one or several dimensions of Inno- network partners. It covers more than 60 tools fromvation Management. There is sufficient openness to various dimension of Innovation Management―successfully link a variety of tools to a fundamental ranging from strategy, organisation and culture toanalysis and sufficient rigor and standardisation in innovation lifecycle process, enabling factors andthe analysis. Such interoperability is a key success innovation results. To meet the need for better ac-factor for effectively integrating various tools and cess in the future, this shared toolbox offers the basisprovides the basis for sharing knowledge. for bringing together tool owners and tool seekers. Figure 28: Interoperability of the A.T. Kearney House of Innovation and Other Tools
42 High-Impact Innovation Management Consulting Services for SMEs Because of the importance of contextual knowledge application of Innovation Management consulting about the use of specific tools, IMP³rove highlighted tools. Thus, raising the overall standard of consulting that such matchmaking should be embedded into capabilities among consultants working in the area a regional and sectoral context. Regional and secto- of Innovation Management in SMEs is important for ral networks of Innovation Management consultants meeting the demand for better tools. Only then are can foster the exchange of available tools and their these tools good tools for delivering high impact. appropriate use. Such networks also offer the oppor- tunity to develop new tools, bringing together con- The following case examples will give a flavour for sultants with complementary competencies and SME how Innovation Management consulting services experiences. These complementarities provide the can lead to high impact on the SMEs’ performance. basis for further developing existing tools, develop- ing new tools and building joint acquisition channels via events and other marketing activities. IMP³rove 5.4 Case Examples of has already set up these regional and sectoral hubs Innovation Management and supports existing consultants in building their own network of partners. Combining a shared tool- Consulting Services box with existing and new collaboration hubs will help meet the demand for better Innovation Manage- The case examples have been contributed by ment consulting tools in the innovation ecosystem. IMP³rove trained consultants from different coun- tries working in very diverse organisations. These All in all, Innovation Management tools require ex- examples represent a wide variety of industry sec- perience in consulting and complex problem solving tors including information and communications to create high impact. Such an experience enables technology (ICT), automotive, pharmaceuticals and consultants to identify the most urgent problem, retail. They illustrate Innovation Management con- propose the right recommendations and use the sulting in what has thus far been described only on appropriate tools and methods. Thus, to meet the a theoretical level. The case examples show that In- demand for better tools, it is not enough to focus on novation Management consulting usually addresses a shared standard for an assessment and a shared several dimensions of the A.T. Kearney House of In- toolbox embedded in collaboration networks. To novation. However, the starting point might be only ensure that tools are applied appropriately, con- a specific dimension or a specific innovation result, sultants need broad knowledge about Innovation such as sales or profit. Management. Further, they need to be able to solve complex consulting problems in a professional and The challenges that the SMEs were facing built the structured manner and propose compelling value starting point for them to get professional support propositions to their clients. and take a look at their Innovation Management. The examples illustrate various consulting approaches Over the last few years, IMP³rove has highlighted that have been used to support SMEs. The consult- that many Innovation Management service providers ing support started with the IMP³rove assessment do not have such a T-shaped competency. Although to gain a solid understanding of the SME’s current they regularly have a high specialization in a specific situation and challenges. These cases also provide area of Innovation Management, such as in innova- insight into the diversity of issues that emerged from tion lifecycle processes, they often lack the broad the IMP³rove assessments. Not all of these issues understanding of the various factors and organisa- were related only to Innovation Management; gener- tional capabilities that enable high-innovation per- al management issues emerged that the SME’s board formance. Further, they regularly struggle with iden- or management did not yet have on their agenda. tifying the real problems to be solved and proposing compelling value propositions to the client. Indeed, Consultants who supported the SMEs in their ef- there is a demand for broadening the knowledge forts to improve competitiveness and performance among European consultants who render services represent both private consulting companies and on SME innovation. Over the last four years, more public institutions, such as technology transfer cen- than 450 consultants have sought IMP³rove training tres or Enterprise Europe Network partners. services. Since the establishment of the IMP³rove Academy, many European consultants have invest- Some SMEs agreed to have their names published. ed more than 1000 € on average to broaden their We would like to thank both the SME managers and knowledge of Innovation Management and learn how the IMP³rove consultants for their contributions. to create convincing value propositions. The ability to SME managers give us a unique opportunity to solve complex consulting problems and link innova- learn from practical experience; consultants show tion with value creation is a prerequisite for proper us how professional consulting support can help
High-Impact Innovation Management Consulting Services for SMEs 43 Figure 29: Overview of Case Examples BUSINESS SECTOR SIZE OF THE AGE OF THE TYPE OF COUNTRY OF THE SME COMPANY COMPANY CONSULTANT ORGANISATION Software 17 22 public Australia Filtration 15 16 private Finland Book retailer > 250 n.a. private Germany Multimedia 18 n.a. private Germany Laser manufacturer 130 n.a. private Germany Electronics company 100 n.a. private Germany Automotive supplier 500 n.a. private Germany Mechanical 1200 n.a. private Germany engineering Automotive supplier 1300 n.a. private Germany Knowledge intensive 20 27 public Italy services (software) Knowledge intensive n.a. 33 private Italy services (research) AEC Consortium Several SMEs n.a. public Italy Health service 30 5 public Latvia provider Aluminium system n.a. 30 private The Netherlands manufacturer Digital traffic control 7 12 private Spain surveillance ICT 15 n.a. (young) private Spain Pharma manufacturer 106 17 public Switzerland Automotive supplier 120 24 private United Kingdom Electronic repair 50 n.a. private United KingdomSMEs to gain – or regain – their competitiveness Abstractand increase their innovation capacity. The casesalso illustrate the versatility of the IMP³rove ap- This is a story about a skeptical SME and how itproach and give a flavour for how the IMP³rove ap- achieved excellent results for managing severalproach can be integrated and combined with other development projects at the same time with anconsulting tools and approaches. IMP³rove assessment.5.4.1 FINLAND This small company has been developing and pro- ducing advanced filtration solutions since 1995, es-Meeting the Innovation Challenges as Produc- pecially for power plants and larger industrial plants.er of Modern Filtration Solutions The production sites are in Finland and Estonia.Sixteen-year-old Finnish company developing and Sales and partner organisations cover the most at-producing advanced filtration solutions with 15 tractive market all over the world. The company em-employees. ploys about 15 full-time people on production lines.
44 High-Impact Innovation Management Consulting Services for SMEs Kajanus Consulting is a small consulting enterprise The client’s company had not set their sights on any that, since 2005, has offered analysis, develop- special targets to be achieved from the assessment ment, advisory and training services for compa- and consulting services. Management was open- nies of all sizes and public organisations in Finland. minded. Suspicion was prominent because there Most consulting projects have been linked with or- are several non-relevant tools offered for meas- ganisational development from the point of qual- urement in the market. However, the client was not ity and innovation competence in recent years. In familiar with the IMP³rove method, but it was well- their consulting projects, Kajanus has noticed that known to Motiva, which created confidence in the a broad innovative approach to identifying and tool. The local development organisation, Cursor, creating development steps for clients essentially also recommended IMP³rove. The client accepted increases clients’ profits from the consulting pro- the proposal for IMP³rove assessment. cess. The IMP³rove methodology applied in almost 40 assessment process and training sessions have Moving from Scepticism to Deep-dive Analy- played an important role in developing Kajanus sis of the Company’s Innovation Management Consulting’s thinking about consulting. Performance Technology and Regulation as Drivers for A Kajanus’ consultant introduced himself, the pro- Innovation ject he worked for and the IMP³rove infrastructure, method, tool, consulting process and presentation For a long time, the filtration industry has been in model of the IMP³rove assessment report and the a stable position with no supreme needs for radical workshop. At this stage, benchmarking with other innovations. Several producers with higher quality companies seemed to be the most interesting part products have competed with producers, selling of the assessment. massively standard products with lower market prices. New innovations and innovative applications Kajanus interviewed the company’s managing di- as well as tightening air pollution regulation are rector, following the IMP³rove questionnaire as forcing producers to face new challenges. translated into Finnish. Several questions about themes were considered unrelated to innovation. This SME wants to be among the leading developers Many questions were also difficult to figure out and producers of new generation industrial filters. without a competent consultant’s help. However, The company has started several production and the interview and the ensuing discussion played an service development projects with researchers, uni- important role in widening the client’s understand- versities and research institutes. Several innovative ing of the innovation concept. results have already been reached. The company has also created a wide partnership organisation The consultant summarized the results of the and renewed production lines and is making a sig- IMP³rove assessment report and presented them nificant step toward become a producer of modern to the managing director. The first part of the sum- filtration solutions. mary was an abstract; the second one described the results along the five dimensions of Innova- Finding the Right Approach to Manage Several tion Management with the benchmarking results; Innovation Projects the third part pointed out development areas and recommendations; and the fourth part was a SWOT The above circumstances, partnered with several analysis matrix with deep-dive discoveries. The development projects under way, has pushed man- IMP³rove method with the summary was most ap- agement to consider the connection between pro- propriate for this company’s needs. jects and next steps, especially how to link them with each other and find a balance between them. From Education in Innovation Manage- The term Innovation Management has not been ment to Measuring Innovation Management used, and innovation competence has not been fig- Performance ured out. The company benefited from the IMP³rove process The consulting service initiative came from the con- in several ways. The most important discovery was sultant, Kajanus, which worked for a project of pro- the understanding of innovation itself; there are ceeding business competence of companies in the several dimensions besides product or service de- field of renewable energy run by Motiva, a consult- velopment that impact the innovation competence ing company in Helsinki, Finland. The service was of a company. This discovery helped in the manage- paid for by the project. ment of several concurrent development projects.
High-Impact Innovation Management Consulting Services for SMEs 45Innovation competence also benefited from the a new business unit has to be formulated by ob-systematic measurement of innovation compe- jectives. Initially, we discussed the pros and constence dimensions. Development activities could be with our client in a strategy workshop, which con-focused based on the proper measurement. The tained elements from scenario technique, port-company defined several measurement points for folio and learning curve. Additionally, we usedinnovation competence. brainstorming to bring up a strategy and address feasibility, project management (risks) and the op-The proper summary of the assessment report erative elements.activated several development initiatives, manyof which were already known but were on passive Insights from IMP³rove Benchmark: Gaps inmode with no development activities. Benchmark- Responding to New Technologies and Marketing results helped position the company with other DevelopmentEuropean companies; some of the results weremore positive and some more negative than ex- At first, the IMP³rove benchmark was carried outpected. The conclusion from benchmarking showed by our client. Both the consultancy and client gotthat the company had positioned itself correctly a first impression about the facts and figuresand the right tasks for reaching the development and about competitive elements. The benchmarksteps had been started. showed that the actual business model failed re- garding new technologies and markets, especiallyIMP³rove assessment as a Starting Point for the digital and online market. Furthermore, theEffective Consulting innovation process and innovation culture were analysed, and the feedback showed gaps withIMP³rove turned out to be a positive method. A a special emphasis on inventing and managingfeedback workshop should be developed further, innovation.and there should be a method for translating bench-marking discoveries into initiatives to improve the To incorporate outstanding innovation elements,development process and commit management to the company decided to hire a trained, certifieddrive them through. IMP³rove consultant to start a project with both in- side and outside knowledge. Both consultant andAcknowledgments client used the IMP³rove tools to assure a proven process and project management to accelerate theThis case study was written by Jorma Kajanus, Ka- innovation process.janus Consulting, Finland. In a first step, facts and figures were discussed with5.4.2 GERMANY a strong emphasis on change aspects. A time ta- ble and KPI sheet were developed. The KPI sheetDevelopment of a New Business Unit by Imple- included budgets for the innovation tasks, thementing IMP³rove Tools cost for the innovation process and the feasibility aspects.German-based book retailer with more than200 bookstores looking for an answer to digital and Consulting Approach: Building a New Businesscompetitive pressure. Unit Based on the New Value ChainAbstract The typical value chain for book retailers consists of authors offered by publishers. Market needsOur client is a book retailer with more than are best understood by publishers. They anticipate200 bookstores and revenues of more than 65 mil- mainstreams and blockbusters in an early stage.lion € per annum, including 7% return on sales, Although the new book market, which is also an e-faced more and more challenges from book-on- book market, does not comply with the old rules,demand (BOD) and independent labels. Normally, the value chain is the same.those niches had been of less interest, but thebook retailer questioned its methods, especially New book-on-demand publishers - with more thancurious about whether independent authors could a million new books and thousands of independ-widen the company’s portfolio, especially for the ent authors - are threatening the traditional valueFacebook and book-on-demand generation. The chain. In contradiction, the need for blockbustercompany’s objective was to develop a new busi- is not given. A printed book that can be boughtness model for the independent sector. Generally, at our client’s store must be sold, for example,
46 High-Impact Innovation Management Consulting Services for SMEs Figure 30: Old Value Chain in a minimum of 100,000 pieces for a thriller or platforms. They do not lose their brand rights, and 10,000 pieces for a cook book. Quantity depends they can produce their print and e-book indepen- on several aspects, such as author or topic. Book dently with an ISBN. Therefore, publishers and on demand means that unknown and independ- book retailers are both facing new challenges. ent authors are publishing their books on virtual Figure 31: New Book-on-Demand Value Chain
High-Impact Innovation Management Consulting Services for SMEs 47Initially, we evaluated book-on-demand publish- The early results for the project, which started iners. Two had been selected because of their high 2008, can be summarized as follows:technical performance and because of widespreadportfolios. Blockbusters, meaning a total of 2,000 • New authors and consumers are part of ourbooks sold, were jointly identified from BOD and client’s portfolioour client. Our client then took the next step, pre- • The e-book generation will, in the future, beparing a new business unit based on facts and represented in a traditional bookstore (on-figures. line + print) • Practices within the team “goes and no-Himmerich Consulting then made a forecast for the goes” of topics, mainstreams and revenuesnext five years, focusing on not only cost, revenues are madeand cash back cycles but also attracting clients for • Brand portfolio was tightenedthe book retailer, especially the young, independent • The gap between old-fashioned book retail-generation. We used market forecast instruments, ers and new book-on-demand publishersmade a survey including teenagers, students and was closedthe early job beginners coming from university. The • Revenues and net earnings from classicalcore aspect was independent, skilled young people publishers are the same as before the projectwith a touch for new ideas. • KPIs of the new business unit have a light deviation (3.8% revenue growth instead ofWe then prepared the business unit: 5%) (RoS: 6%) • Selection criteria for authors Lessons Learned: Establishing a New Business • First using the e-book supply for consumers Does Not Necessarily Put Risk on the Estab- because of the low cost for digital storage lished Business • After 2,500 authors, a maximum of 100 books are available at the stores First of all, a very important lesson was learned. • A new brand - IP-Authors for IP-Persons - Introducing a new idea depends on several factors: was established • A team of 10 employees with a strong back- 1. Our client was open-minded, but his em- ground in forecasting and knowledge about ployees were not. We had to convince them IP-authors was established, including sales about chances people who are related to the target group 2. The old-fashioned core business has not to • The timeline for success (KPIs) was gener- be switched or changed in any way ated (three-year planning) 3. The forecast may be important, but this is • The business was integrated into the opera- only a frame. The long-term perspective is tive activities of much more interest (sustainability) 4. It is not the internet or the business model.KPIs: It is the understanding of future markets, consumers and market position that will • Planning an innovation budget by RoS, pro- help overcome barriers ductivity and expectancy values + revenue: 2% first year (total 2008 60 million €) The IMP³rove process, its core elements and the • + revenue: + 5% second year benchmark were very helpful for the implementa- • + revenue 5 % after year three tion of the innovation elements. A well-structured • Average revenue after year three: 5-8% process combined with the IMP³rove elements was • Return of sales: 8% after year three essential for the project’s success. • 100 to 200 new book titles from independ- ent authors for the product portfolio The innovation process is much more implemented at this company today than it was before. Now, in-Unique selling proposition (USP): mainstream + novation can be planned and carried out with theniche for young generation given tools.The interaction with our client took place once Acknowledgmentsa week with a weekly report and a monthly meetingin which hurdles and barriers, new ideas or actual This case study was written by Bernd Himmerich,needs were discussed. Himmerich Consulting, Dortmund, Germany.
48 High-Impact Innovation Management Consulting Services for SMEs Digital Royal: From On-Demand Solutions to ties and learn about approaches to leverage their Platform Provider for Multi-Media Content innovation outcome. Moreover, they learn about Preparing a German-based multimedia agency with the importance of systematically tracking their 18 employees for a large innovation project. environments to gain a realistic view of their own market position and their competitors. However, Abstract most SMEs do not have the competencies and re- sources to continuously operate systematic Innova- Pumacy Technologies AG is a leading provider of tion Management on their own. Here, consultants knowledge, innovation and process management come to play a crucial role for SMEs. The consulting solutions. Founded in 2000, Pumacy is a spin-off market is very diverse and not transparent, espe- from Technical University Berlin and the Fraun- cially for SMEs who do not have a broader experi- hofer-Institute for Production Systems and De- ence with consultants. Their approaches are often sign Technology IPK. Our customers are known as expensive, and their guidance does not always fit leading manufacturers―in industries from aero- the SME’s needs. Therefore, there is a high degree space, automotive and pharmaceutical industries of uncertainty about the benefits and costs associ- to plants and machinery. For each of our business ated with external service providers. An established segments―knowledge, process and Innovation method like IMP³rove helps secure quality stand- Management―we offer our clients a holistic ap- ards and deliver high value to SMEs. proach ranging from a first strategy and system- atic analysis to a professional concept and the Objectives of the Consulting Services: Put- implementation of the final solution. Our specific ting SME’s Innovation Needs into a Wider strength lies in our interdisciplinary teams. Engi- Perspective neers, business economists and IT specialists work together with psychologists, communication scien- For Pumacy’s SME consulting services, the IMP³rove tists and sociologists. approach helps gain insight into a company’s in- novation activities and begins a detailed analyti- We use IMP³rove as a starting point for innovation cal process. The structured presentation of the assessment before an in-depth analysis, consult- IMP³rove results and illustrations are explained to ing and solution development for SMEs. IMP³rove is the SME. The outcome is a first impression about especially helpful in analysing the SME’s capabili- how to improve the SME’s innovation capability. ties for applying for public funding programmes. It The benchmark results already indicate a direction provides a clear understanding of the company’s for further activities. SMEs usually know their mar- situation, not only in a narrow view but in com- ket very well, but they often do not systematically parison to their global competitors. We can thereby monitor their global competitors. The aim is to put provide a realistic description of the company’s po- an SME’s innovation needs into a wider perspec- tential and shortcomings to project sponsors. tive and to consider framework requirements. This means widening the understanding about innova- Providing SME with High-Quality Consulting tions in their field of business and straightening up Services their self-portrait―if necessary, bringing across a clear message about the status quo and the route SMEs often do not have a systematic understand- to go. Thus, IMP³rove is a door opener to developing ing of their position in markets and regions be- long-term customer relationships with SMEs. cause they do not have the time and budget to monitor global and regional markets. They often In practical use, a key advantage of the IMP³rove struggle to determine their competitors, potential assessment is its transparency. SMEs gain a clear partners and even the markets on which they de- understanding of its usage and the resources it pend. In order to position themselves among other takes to collect all necessary information. IMP³rove players, they first need to understand their value is a lean tool. Questions are straightforward, and proposition and their assets, including their qual- the assessment is not overly time-consuming. Con- ity level. The innovation capabilities of a company, sultants and clients can easily go through the as- SMEs and OEMs alike, are key factors for competi- sessment via telephone and internet. Another great tive sustainability and growth. However, the qual- advantage is the large database that IMP³rove of- ity of a company’s innovation capabilities must be fers. SMEs can see that various SMEs from all over related to other companies’ performances. There- the world already participated; their results are the fore, IMP³rove offers a benchmarking tool as well. base for a benchmark that can be individualised to the characteristics of the SME. The consultant IMP³rove helps SMEs develop specific competen- does not have to start a competitor analysis from cies. SMEs gain a new understanding of their activi- scratch but can build upon this database. This helps
High-Impact Innovation Management Consulting Services for SMEs 49keep the use of resources at a minimum during the This is not only relevant for projects but can alsoconsulting process. be a great motivator for the client and its employ- ees. Having identified the crucial competencies andThe SME as a client will also find further informa- resources that are necessary for executing innova-tion about the consultant on the IMP³rove platform. tion projects, we outline a roadmap of the mainAs an authorised partner, the consultant has proven milestones in the years ahead. Here, we carefullyto be a reliable partner within a trusted network choose means and goals for improving the SME’sof specialists. The platform thereby helps establish benchmark position and making it more competi-the foundation for client relationships with partners tive in the future. Furthermore, we try to bond anythat have not collaborated before. general methods to a specific project so that re- sults will be visible. After implementation, we try toAfter the assessment, the consultant needs to collect, closely monitor the progress and effectiveness ofsynthesise and interpret the information. The assess- the measurements over the years.ment helps structure all relevant data, identify theSME’s weaknesses and strengths in terms of its inno- Overall, IMP³rove supports our consulting approachvation capabilities based on a profound benchmark. as a tool within the process. Benchmarking leads to a competitor analysis and an understanding forPumacy often consults SMEs to prepare for re- the resources needed to execute the innovationsearch projects and their financing. The assessment projects. Throughout the project, Pumacy deliversis a great tool for determining major weaknesses further guidance, such as searching for partnersand strengths of an SME’s innovation capabilities and investors, offering project management andthat might be of interest to partners and future supporting marketing.investors. Strengths will be highlighted, and weak-nesses will be identified. Pumacy helps companies Achieved Results: Preparing for a Large Inno-absorb weaknesses in different ways: Some weak- vation Projectnesses can be diminished by changing manage-ment priorities while absorbing other weaknesses In general, IMP³rove supports the process of un-might be unrealistic. One key insight in working with derstanding the SME and its individual innovationSMEs is that you simply cannot work on all weak- capability. Furthermore, IMP³rove helps the clientnesses that might be relevant for innovation pro- to self-reflect and position itself between otherjects. Pumacy, therefore, helps clients find strong competitors. Surprising positive results are possi-partners with complementary strengths to balance ble. One of our clients, Digital Royal GmbH (www.the weaknesses. The integration of further part- digitalroyal.com), discovered that the company wasners can be very promising for complementing the vastly outperforming its competition in projectsstrengths and absorbing the weaknesses of single and targets (see Figure 32).partners. The IMP³rove tool is a means for argu-ing why a certain partner turns out to be a perfect Digital Royal is a multimedia agency that special-match for clients and how a network of partners ises in delivering premium-design and animations.can convince financial investors even more. About 18 employees work for a wide range of cus- tomers in the fields of banking, consumer goods,Description of the Consulting Approach: De- tourism, television and aerospace. Digital Royal wassigning the Picture of the SME’s Future planning to conceptualise and execute an ambitious project that would make them a platform providerIMP³rove can benefit any company and helps to ac- for multimedia content. This was a new market seg-cess funding and subsidies. The SME can identify its ment for the company, which had been focussing onown competencies and demonstrate where it aligns on-demand solutions.with the planned projects. IMP³rove can show whichfactors should be improved and what the outcome Digital Royal approached Pumacy at a very earlywill be, not only in terms of the project but also for stage of the planning, and Pumacy conducted thethe whole company. Therefore, IMP³rove provides assessment. The results showed not only someimportant arguments to management for allocat- need for improvement but also a great strengthing funding and convincing partners. In the context that supported the decision to start a big project. Inof the SME’s strategic goals, Pumacy can interpret the past, Digital Royal had a clear definition of taskswhich weaknesses and strengths from the assess- with respect to time, budget and quality and thusment might become highly relevant to successfully beat their competition in this field. With this suc-innovate in the future. Combined with other stra- cessful performance in mind, they were confidenttegic management tools and forecasting methods, and motivated to be on the right track. After iden-it is possible to design the picture of the future. tifying the strengths and weaknesses, Digital Royal
50 High-Impact Innovation Management Consulting Services for SMEsFigure 32: Results for Digital Royal: Enabling Factors in the IMP³rove Assessment was able to understand which part of its strategy Acknowledgments could be fulfilled and where they had to find strong partners, such as multimedia content providers. This case study was written by Tobias Müller-Pro- thmann, Pumacy Technologies AG, Berlin, Germany. Pumacy thoroughly analysed all results and creat- ed a roadmap for the project so that our client knew German Start-up Consultancy Successfully which competencies to build up and where to rely Leveraging IMP³rove as a Powerful Means to on other partners with complementary strengths. Engage with New Clients Subsequently, Digital Royal was able to convince in- vestors about their project, and they received sub- Abstract stantial funding. In November 2010, the consulting company Er- Leveraging IMP³rove for Investors’ Analysis bacher & Partner was founded by a former CEO of a mid-sized manufacturing company. In De- Investors’ acceptance of a systematic innovation cember 2010, the founder of this consulting capabilities analysis is impressively high. Investors start-up joined the IMP³rove network. In less than are not looking for SMEs that are faking strengths 12 months, he performed five IMP³rove assess- and hiding their weaknesses; they are looking for ments with manufacturing companies of varying confident SMEs that are aware of their market po- sizes―from 100 employees to more than 1,000. sition, have clear strategic goals and know which Based on the IMP³rove benchmarking report, partners can support them. each of these companies received comprehensive feedback on their Innovation Management per- IMP³rove is a hands-on tool for consultants. It is easy formance and competitive position during a man- to integrate into consulting processes and deliv- agement workshop. As a result, 60% of these ers precise results. We are pleased to have this tool companies requested further consulting support available. Companies save valuable resources, mon- for improving their business performance and ey and time and can target their business challenges. competitiveness. We recommend an assessment at the beginning of Key Success Factors of the Start-up Consult projects so that foundations can be set up. For any ancy: Value Creation for Clients SME, IMP³rove can be the tool that facilitates the front end of innovation and later monitors the pro- The IMP³rove assessment helped the consultant gress in comparison to the competition. Companies start the discussion with a new client and gain that initiate a project and intend to receive funding a thorough understanding of each client’s burn- should start with a benchmark to know how long ing issues. It not only revealed the gaps in Innova- the road they intend to go on will be. It will help tion Management, but also pointed to issues that them save their breath for the real challenges and jeopardized the company’s competitiveness. Given keep the goal in mind while dealing with everyday his own experience in managing a manufacturing issues. company, the consultant knew what the key areas
High-Impact Innovation Management Consulting Services for SMEs 51would be to help the client improve their perfor- Flexibility of the IMP³rove Approach: Applicmance. With the results from the IMP³rove bench- able Also for Larger Companiesmarking report and the insights the consultantgained during the management workshop’s discus- The consultant also applied the IMP³rove assess-sions, the consultant had the data to flexibly re- ment in medium to large companies. An automotivespond to the unique consulting needs of his clients. supplier with about 500 employees experiencedOften, there were operational issues to improve the a change of management a year and a half ago. Allmanufacturing processes, to reduce lead times be- divisions within the company used to work in iso-fore taking a closer look at the innovation-related lation from each other. The IMP³rove assessmentissues. showed high potential for the company in the area of innovation strategy as well as in the effective-The key success factors are: ness of development projects. The consultant sup- ported several projects for optimizing processes • Expertise along the production and process innovation chain. • Trust The good results achieved during these projects led • Flexibility to follow-up projects with the consultant. They aim at synchronizing the innovation and product strat-Expertise in Manufacturing to Meet High Mar- egy of the international subsidiaries with the parentket Demand for Innovations company’s innovation and product strategy in order to significantly increase turnover.The IMP³rove assessment has been conducted witha “cutting-edge” manufacturer, with about 130 In a mechanical engineering company of 1,200 em-employees, in the machinery tool industry. The as- ployees, the IMP³rove assessment showed an ex-sessment showed an extremely well-developed in- ceptionally long product life cycle of 20 years.novation culture and product innovation strategy. Nevertheless, the company had good overall inno-Thus, successful product innovations led to rapid vation results. However, little information from thecompany growth. On the other hand, Innovation field service was incorporated into the innovationManagement in the area of organisation and pro- process. Further, business model innovations havecesses was only poorly developed. Programme and been obstructed by scarce availability of historicalrelease management as innovation enablers also data. As a result, the company is in discussions forshowed huge improvement potential. Successful further consulting support related to knowledgeproduct innovations created high market demand management as an enabler for product and busi-and led to significant company growth. To cope with ness model innovations.market demand, the company engaged the con-sultant, who has expertise in manufacturing from Another automobile supplier, with 1,300 employees,his previous job, to drive an ambitious effective- has asked the consultant to perform the IMP³roveness programme in manufacturing, complemented assessment. This company’s organisation has beenby an additional improvement project for product very lean, and it showed excellent performance inmanagement. These assignments helped the SME process innovation, which has been closely linkedbecome more competitive, establishing incremen- with product innovation. The IMP³rove benchmark-tal process innovations. ing report identified two areas for improvement:Building Trust Takes Time for SMEs • Need to develop a medium-term innovation strategy in order to plan new technology in-In an electronics company with 100 employees, novations that support product innovationsthe IMP³rove assessment revealed that this com- that are independent from clientspany had a well-structured project organisation. • As process innovations are being developedHowever, the owner was very unsatisfied with the within the individual production units, socompany’s innovation results. A more detailed called “information islands” arise. Theseanalysis of the IMP³rove benchmarking report should be closely and urgently intercon-fairly quickly showed great potential in the areas nected, even on international level, in orderof radical product innovation, innovation culture to achieve the best innovation resultsand innovation organisation. The owner of thisSME needed time to build trust in the consultant’s The company asked the consultant to prepare a mid-ability to generate value for his company. One year term innovation strategy. Ongoing discussions areafter the IMP³rove assessment and the detailed focusing on further support for knowledge manage-analysis, first interventions by the consultant were ment (linking innovation processes and transmissionplanned. of process knowledge that is critical for success).
52 High-Impact Innovation Management Consulting Services for SMEs For Erbacher & Partner, the IMP³rove approach is research centres. In 2004, Friuli Innovazione was a means to engage the client in structured discus- entrusted with the management of the Science sions on the areas where they lack performance and Technology Park of Udine. Since 2004, Friuli and competitiveness. Innovazione has also been managing an incubator for information and communications technology Acknowledgments (ICT) spin-offs. Furthermore, Friuli Innovazione has close connections with all the representa- These cases were contributed by Frank Erbacher, tives of the territory. Among its partners are the Erbacher & Partner, Baden-Baden, Germany. University of Udine, the Chamber of Commerce of Udine, Udine and Pordenone Industrial Associa- 5.4.3 ITALY tions, Municipality and Province of Udine, banking and research institutions. Main fields of activity IMP³rove: An Opportunity for SMEs, Interme- are in the areas of biotechnology, metallurgy and diaries and Institutions technology of surfaces and advanced materials, INFOTEL s.r.l., founded in 1984 and expanding to ICT, wood, environment and energy. 20 employees, is a knowledge-intensive service company that wanted to get ready for interna- To nurture the link between university and enter- tional markets. prises, Friuli Innovazione provides assistance in technology transfer, enterprise funding and en- Abstract terprise development. The IMP³rove approach has been implemented within these services, as a key INFOTEL was founded in 1984 with the aim of de- opportunity offered to local companies to improve veloping software and hardware solutions for lo- their innovation performance. cal companies and institutions. The company has always been strongly linked to IBM, which has en- IMP³rove Assessment Provides Insights for sured a continuous process of internal development SMEs and Public Institutions in the organisation through targeted trainings. Based on the experience in the previous IMP³rove INFOTEL developed its expertise by working closely pilot phase, we have decided to operate with with local small and medium-sized companies. To a two-pronged approach to increase the suc- fulfil the needs of its clients, INFOTEL developed cess possibilities: From one side, a group of SMEs solutions for bringing technological innovations has been directly invited to complete the self- closer to people to empower them to manage their assessment questionnaire with our support; from processes more effectively and efficiently. They the other side, the local institutional support has achieve customer satisfaction by investing in re- been searched among the leading stakeholders, search and human resources training, clearly defin- including the chamber of commerce and regional ing customers’ needs and focusing on quality con- government. If these stakeholders understand trol to offer effective, reliable and secure solutions. the added value of adopting a common approach to evaluate the SMEs that are asking for funding, The IMP³rove assessment provided INFOTEL with then we predicted the territory will be more re- insights into their competitiveness in interna- sponsive to the opportunities IMP³rove offers. tional markets. It also broadened the company view of innovation, which is not limited to product Why this kind of approach in our territory? The Fri- innovation. uli-Venezia Giulia region, thanks to its cross-bor- der position, is naturally oriented to internation- Supporting SMEs in Gaining Competitive- alization and international cooperation. Therefore, ness and Innovation Capabilities as Public the local institutions are in favour of initiatives for Institution improving SMEs’ competitiveness and territorial cooperation. Friuli Innovazione is a consortium set up in 1999 to streamline and foster interactions between ac- What is still missing among stakeholders and in- ademic researchers and laboratories of the Uni- stitutions is a common systematic approach on versity of Udine and the economic operators of innovation and unique evaluation criteria to as- Italy’s Friuli-Venezia Giulia region. The consortium sign different funding opportunities. IMP³rove can provides a platform for enhancing and promot- be an opportunity for an institution to evaluate ing technology transfer and the economic use of and select the most innovative SMEs to which to scientific knowledge produced by universities and dedicate specific initiatives and resources.
High-Impact Innovation Management Consulting Services for SMEs 53IMP³rove can be an opportunity for an SME to un- The company considers the comparison with ma-derstand its Innovation Management performance jor international competitors to be very importantcompared with other companies in other countries to better understand the innovation concept andand to take actions before being evaluated by an its various dimensions. INFOTEL learned that ma-institution to receive dedicated funding. jor competitors are investing in innovation with different objectives: process innovation, serviceThe presented example is based on the fact that innovation, new business models and productthe company understood the possible added val- innovations. But the development of innovativeue of an IMP³rove supported evaluation. products is not enough.A Solid Basis for Further Development Institutional Support for IMP³rove Required to Increasing the Impact of Public SupportThe company has been developing its technical ex- of SMEsperience since 1984. INFOTEL can develop softwareand hardware based on specific client demand, The IMP³rove approach has already been testedthanks to the cooperation with important hardware and proved its validity. With IMP³rove, compa-and software partners, especially IBM. The com- nies have a user-friendly tool that allows thempany is working on a national market, mainly in the to benchmark their Innovation Management per-border regions of Friuli-Venezia Giulia and Veneto. It formances with more than 3,000 competitors atis not yet present in the international market. the European level. A list of trained intermediar- ies is available for consulting services to improveFrom a technical point of view, the company can a company’s Innovation Management. Althoughbe considered complete. The staff members are there are still some technical weaknesses―fortrained and can deliver certified services and as- example, there are too many steps for a companysistance to their customers. There is a good level to be linked to a consultant―the tool is ready.of internal communication, and the company’sstrategy and vision are shared among its person- What is missing in our specific case is a territorialnel. There is also a good level of external commu- consensus: To reach expected results and attractnication with partners and clients, which is neces- more companies, the IMP³rove approach needssary for product development. However, there is institutional support. A top-down approach is rec-a general lack of managerial capabilities. ommended. Once institutions and major stake- holders understand the possible added value inGetting Ready for International Markets adopting a common method for evaluating SMEs starting with their Innovation Management per-INFOTEL wanted to know if it had the right char- formances, and then companies will ask for theacteristics to enter the international market. service.IMP³rove identified a good chance of competingwith companies from the same sector on the Eu- Acknowledgementropean level. Managing innovation is part of thedaily job of a company that deals with innovative This case study was written by Romina Kocina,products. Therefore, before entering the foreign Friuli Innovazione Parco Scientifico e Tecnologicomarket, the company believes it is important to Luigi Danieli, Udine, Italy.know how it is performing in Innovation Manage-ment and have ideas for how to improve. EIDON: Getting Back on Sustainable Growth Eidon Lab Scarl, founded in 1978 and based inBenchmarking has been conducted among Italy’s north-eastern region, Veneto, is a non-a group of 202 companies from the same sector profit independent research laboratory, which hasof activity at the European level. Considering that experienced networking innovation.INFOTEL is working only at the national level, theIMP³rove benchmarking report gave us a positive Abstractoverview of the current status of the company:Its Innovation Management performance can be In 2008, R.Q. s.r.l. consultant Lucilla Lanciotti wasconsidered good; the company has an innovation commissioned by Eidon Ricerca Sviluppo Docu-strategy, and there is good internal and external mentazione s.p.a. for consulting service to im-communication. However, there are some difficul- prove the company’s performance in the field ofties in turning innovation investments into added Innovation Management. The company’s missionvalue for the company. was to realize research and development projects
54 High-Impact Innovation Management Consulting Services for SMEs in the field of process and product engineering for As it happens for other companies that also are information technology and industrial electronics. in the excellence range, the IMP³rove benchmark- ing reports emphasized some areas that needed Eidon Spa offered its customers technological sup- a consultant’s intervention aimed at bridging the port for outsourcing research services in areas such identified gaps. The company perceived some non- as process technology and embedded software. Ei- technical limitations in its business model, which don designed and developed software solutions for could harm the company’s development potential. e-business systems to improve access to and distri- In particular, the weaknesses that emerged were bution of information via the internet. the following: With an R&D focus, Eidon Spa’s accreditation from • The innovation strategy was barely sustain- the Italian Ministry of Education allows its clients to able in the mid and long term: access qualified engineering services, technological o Innovation was connected to self-referral research and innovation projects in partnership with research and was not targeted to the academic institutions. market o Technological specialization was ab- Understanding Eidon’s Need for Improvement sent. Because the company worked at studies and contract researches based In particular, Eidon Spa was a technological partner, on the customer-specific requirements, offering outsourcing research services to their cus- the lack of specialization resulted in less tomers. Eidon’s competences ranged from process profitable results technology to embedded software, from internet and o The company didn’t supply a turnkey networking to distributed and pervasive information product to its customers, but only the technology, from image processing to visual inspec- result of the researches ordered in tion systems. In the field of e-business systems, outsourcing Eidon designed and developed software solutions • Innovation life-cycle management: to improve the access and distribution of informa- o The time to market and return on in- tion, by using web-based pervasive communication vestment was too long technologies. o overall time before the customer The could use the research results was too Strongly focused on R&D, Eidon Spa has gained ac- long creditation from the Italian Ministry of Education, o The success rate of the projects on the University and Research (MIUR) with the correspond- market was low ing registration in the ministry’s registry of research o Management costs of innovation pro- laboratories. This accreditation allows client compa- jects were high nies to access not only the services of qualified engi- o Feedback was low among the market- neers but also technological research and innovation ing and research teams. (There was lit- projects in collaboration with university departments. tle knowledge of the market) • Innovation results: Using the IMP³rove method, R.Q. has identified Ei- o The activities were barely profitable don’s Innovation Management strengths and weak- nesses. The IMP³rove assessment reports and the Filling the Gaps with External Support: Global IMP³rove root cause analysis reports highlighted Market Re-Positioning of Eidon’s Most Ad- the areas of excellence in the field of Eidon’s Inno- vanced Products and Services vation Management in respect to the performance of the benchmarking class, taken as reference. The Once the weaknesses had been identified, the con- outstanding strengths are: sultant defined all the necessary actions needed to close the identified gaps: • Innovation organisation and culture: capa- bility of sharing the innovation values with • Define a clear innovation strategy, sustain- internal and external partners and creating able in the long term through the speciali- Innovation Management oriented networks zation of the research activities • Enablers: a high level of financial resources • Industrialize the research results by selling dedicated to innovation, highly qualified per- a turnkey service to the customer that, in sonnel dedicated to innovation and specific addition to the study and research of new know-how solutions, includes the prototyping and industrialization of the results within the customer’s production processes
High-Impact Innovation Management Consulting Services for SMEs 55 Figure 33: Description of the General Innovation Management in Eidon (Starting Situation) • Integrate in terms of orientation to the mar- ing to the needs conveyed by its target ket. Starting from a thorough market analy- market, Eidon Kaires Srl develops in- sis in the field and the selected specialization novative technologies that are aimed areas, create a catalogue of innovative and exclusively at its market needs. Eidon marketable products. The innovation must also integrates and industrializes solu- be conceived as not only a product but also tions and technologies developed in the as a process and organisational innovation customer’s production processes, in- • Share the custody of the industrial results creasing the value added of the offered products and servicesEidon Back to Profitable Growth o EIDON Lab Scarl is a private organisa- tion, operating according to the OpenThe defined and implemented strategic and opera- Innovation logic, its main aim beingtive plans made it possible to bridge the gaps high- not only industrial research, but alsolighted in the first analysis based on the IMP³rove increasing the value of its market ac-approach. In particular: tivity. In addition to the research divi- sion, there is also a technology transferClear innovation strategy in line with the market division. Its main aim is to transfer re-needs: search results to the market according to varying methods, depending on the • Revise the business model. It has been specific needs on a case-by-case basis. deemed necessary to diversify the activ- The company is a non-profit research ity within Eidon Spa, creating two different organisation under section 2.2.d in the structures, operating in parallel: European Commission Communication o Eidon Kaires Srl is an industrial compa- 2006/C 323/01, and it aims to perform ny, working in the field of development the basic research, industrial research of vision systems for automation and and experimental development, dis- knowledge intensive systems. Accord- seminating the results of that research
56 High-Impact Innovation Management Consulting Services for SMEs and development by teaching, publish- Acknowledgement ing and transferring technology This case study was written by Marco Santoro, R.Q. Improved innovation life-cycle management: s.r.l, Milan, Italy. • Reduce the time to market and return on Innovation Management as an Enabler for investment New Business Opportunities in the AEC10 • Develop ideas and projects with an interdis- Sector: Exemplified by the build4future ciplinary team, including the sales and mar- Consortium keting functions Applying the IMP³rove assessment in several • High success rate of the projects on the companies of the architecture, engineering and market construction (AEC) sector. • Reduce Innovation Management costs • High economic return of the research results Abstract Innovation results: This case study about a research consortium within the South Tyrolean AEC sector is a good example of • Increased turnover of the brand Eidon: how systematic approaches in Innovation Manage- o 300.000 € in 2009 ment can help to analyse and improve the situa- o 1.000.000 € in 2010 tion for top-of-the-market SMEs or hidden cham- o 3.000.000 € in 2011 pions. Several methods were used in this project; o 8.000.000 € forecasted for 2012 IMP3rove was one of the crucial elements to meas- • Profitability: ure the companies’ corporate innovativeness. The o 10.000 € in 2009 results of the assessment led to proposals and rec- o 200.000 € in 2010 ommended procedures that will have a significant o 300.000 € in 2011 impact on the project’s success. o 800.000 € forecasted for 2012 Figure 34: Description of the General Innovation Management in Eidon (Starting Situation) 10 Architecture, engineering and construction
High-Impact Innovation Management Consulting Services for SMEs 57Leveraging Market Pull and the Technology project build4future, which aims to optimize thePush processes within the value chain in building con- struction projects.The build4future research consortium consists of12 SMEs of the AEC sector in South Tyrol. These What Did We Expect?stakeholders are scattered along the building andconstruction value chain from architectural building The overall objective was to identify and developdesign to project realization. All of these enterpris- strategic measures of Innovation Management toes feature SME-typical structures, such as low hier- enable the implementation of new processes andarchies, defined limits for employees and turnover, products. So the first milestone was to point out theand are predominantly family owned and operated. status-quo of Innovation Management activities,In this case, the median number of employees per carried out with the help from IMP3rove. Therefore,company is 43, while the median age is 27.5 years. each company was analysed in particular and the build4future consortium collectively.The current situation in the AEC sector is affectedby two main issues resulting from a dynamic mar- The project focus didn’t concentrate on building upket environment: a department for Innovation Management because these companies do not have capacities to assign 1. There is a growing demand by society and employees solely for tasks in Innovation Manage- building owners deriving from social trends, ment or innovation monitoring. Instead, the first concerning sustainability, especially energy partial purpose was to provide a basic understand- efficiency and cost effectiveness, flexibility ing of the topic. The next step was to identify the and barrier-free building. → “market pull” weak spots in the companies’ integrated processes, 2. There is an increasing availability of inno- regarding their methodical approach to find inno- vative building technologies and materials vative solutions for existing problems. Within the with a wide range of possibilities to dif- build4future consortium, the practical implementa- ferentiate and customize the final product. tion of the acquired knowledge is the last step, real- → “technology push” ized by an innovative joint R&D project, in this case the prototypical realization of a highly innovativeThe AEC branch in South Tyrol has set high stand- hotel project.ards within its own branch; nevertheless, it has toface the challenge to remain or become flexible and How Did We Proceed?highly adaptable to quickly changing conditions inmarket needs. The approach for the IMP3rove assessment can be summarized in five steps:It’s Time for a Change 1. Face-to-face interview (for each company):Because of European and global competition, es- The IMP3rove analysis was carried out bypecially from low-wage countries, the South Tyro- two interviewers and generally two peoplelean building sector needs to focus on high quality from the company: the business managerstandards and innovative products. It already takes and a technical experta leading role in specialized product areas, such as 2. Evaluation (without company): The evalua-timber construction, sustainable and natural build- tion was done by the assessment team, re-ings. However, this sector has the chance to pre- spectively the consultantserve and extend its position by bundling its com- 3. Face-to-face feedback (for each company):petencies, as it will be pursued with this consortium. The results of the analysis were presented and discussedResearch projects in general focus on development 4. Meeting with the consortium: The individualand implementation of more efficient and integrat- results were consolidated to create valu-ed processes and organisational project structures. able information, which was presented toThese project structures are coupled with the intro- the consortiumduction of new planning and management tools to 5. Workshop with the consortium: The statussupport cooperation. The problem lies in the fact quo was analysed to leverage practical in-that there is no methodical approach for Innovation novation and technology projectsManagement. What Did We Achieve?The Innovation Management consulting was in-tended to take place within the joint research The following results were achieved:
58 High-Impact Innovation Management Consulting Services for SMEs The consortium got a better understanding of how before that project. However, most participants to systematically approach problems in order to are widely unfamiliar with the topic of Innova- find innovative solutions. tion Management, so the IMP3rove assessment could not have been carried out without consult- Regarding the differing characteristics of Innovation ing services. Management, the internal comparison shows that the 12 companies are positioned quite differently, Generally, the firms were aware that there are especially if you consider the innovation strategy, problems inside their organisations, but they didn’t but yet show similar characteristics regarding their know where to search for them. overall strengths and weak spots. Andreas Nischler, commercial director of Plattner A comparison was drawn between the South Tyro- Bau stated, “The IMP3rove assessment was very lean and the European AEC sector that leads to the helpful. We innovate, now we finally got an ad- conclusion that the current situation is advanta- equate understanding for it.” geous but still in need for improvement. The participants affirmed that innovative ap- Strengths and potential for improvement of the proaches and unidentified innovative potentials for build4future consortium are shown in the follow- the AEC sector were brought to light. Nevertheless, ing areas: some room for improvement can be found here, too. It was quite hard to execute a benchmark because • Strengths: the AEC sector isn’t listed within the IMP3rove data- o Innovations are an important part of the base, and therefore, an accurate comparison is not business success possible. This is why benchmarks were compared o The cultural conditions for innovation with the engineering and construction sector, even are given though it follows a different mechanism. In order to o “Learning” organisations exist get an acceptable basis to compare the benchmark o T here’s a functional network with results, the questionnaire should be adapted for the partners AEC sector. • Potential for improvement: o Minor efficiency in idea management Acknowledgement and development o Strategy is mostly not explicitly defined This case study was written by Daniel Krause, and not in line with innovation topics Fraunhofer IAO, Stuttgart, Germany/Fraunhofer o Insufficient transfer of innovation strat- Italy, Bolzano, Italy, and Denis Horn, University of egy throughout all hierarchy levels Stuttgart, Institute for Human Factors and Technol- o Communication and marketing of ogy Management IAT, Germany. innovation 5.4.4 LATVIA The recommended procedures for the build4fu- ture consortium should be approached in several Overcoming the Economic Crisis with New steps. First, the actual innovation strategy must Business Development be analysed and subsequently individualized for Private health services company founded in 2006 the company. Then, new planning processes should with about 30 employees (administrative and doc- be arranged with workshops―to identify search tors) and nine owners, one of them Venture Capital fields―and afterward verified with a project. In or- Fund. der to generate solutions, systematic idea manage- ment should be established; this can be achieved Abstract by recording the current state and then develop- ing a concept for the target state. In a final step, The company is a private health services company the organisational structure has to be improved, specializing in magnetic resonance imaging and and authorities for innovation projects have to be tele-radiology. The company is the leading pro- delegated. vider of tele-radiology services in Latvia, employ- ing highly experienced radiologists from University What Did We Learn? Clinic, holders of Latvian, Swedish and EU certifi- cates. The company uses Japanese and American Companies were very willing to participate in medical technologies, which are certified and com- the build4future consortium, as the awareness patible with the European Union regulations, includ- for necessary improvement had been enormous ing private data safety requirements.
High-Impact Innovation Management Consulting Services for SMEs 59Since the beginning, the company was innova- In mutual discussions with the EEN IMP³rove con-tive―using innovative technologies, investing in sultant, two directions for a potential solution wereR&D and following innovation and business strat- defined. One was to keep to the existing businessegies. To expand the business and develop even profile and set new targets, use new strategies andfaster, the company joined forces with a venture find new markets. Another solution was to changecapital company. The company expected to grow the company profile―finding new operation areasrapidly. However, in 2008, the world and national of the company (new applications, new services,economic crises started, which negatively influ- new niche, new markets) and working out appro-enced the company’s business. Company own- priate innovation strategies. During the discussions,ers had very different opinions about further the company suggested using a SWOT analysis asdevelopment of the company and could not find a starting point. Therefore, the EEN IMP³rove con-consensus. sultant suggested a plan: Make a deeper assess- ment - the company’s Innovation ManagementOffering Competitive Advantage assessment and benchmarking, by using IMP³rove tools. Then, analyse the results and present themThe highest quality of the company services is en- to the whole company board. In the same companysured by the knowledge and experience of the staff board meeting, the EEN IMP³rove consultant sug-members, technologies and quality assurance sys- gested organizing a creative thinking workshop fortem by implementing ISO 9001:2000 standards. development and assessment of new ideas.The mission of the company is to help healthcareproviders become more competitive by re-allocat- The EEN IMP³rove consultant supported the choiceing radiology for high-quality solutions of lower for the IMP³rove assessment with arguments: It iscost and quicker turnaround. By outsourcing tele- necessary for the owners to see where the com-radiology services, the healthcare providers acquire pany stands in innovation strategies and new prod-a set of comparative advantages: uct and technology development, identify strengths and weaknesses, categorize its international com- • Staff member cost savings petitiveness and export potential and determine • 24/7 emergency services how the company is positioned in the EU market. • Two hours emergency reporting The company expected to identify the obstacles • Overflow management capacity to successful business development. The consult- • Access to tele-radiology solutions during ant pointed out that the problem might be not only holidays, weekends or late hours external (economic crisis), but there might be some internal sources, too, which could be identified withFinding a Way out of Stagnation an IMP³rove assessment.At the beginning of 2010, the company faced the The IMP³rove online assessment was carried outimpact of the world economic crisis. Turnover had by the company director, who knows the companydropped, as the demand for the offered services business, is fluent in English and knows the basicsand paying capacity of the customers decreased of Innovation Management. The assessment reportremarkably. To remain successful and competitive, was analysed by the IMP³rove EEN consultant. Thethe company had to find new business solutions. outputs of the IMP³rove benchmarking report were put in the frame of a SWOT analysis, which is an un-One of the owners of the company - the Venture derstandable framework for all company members.Capital Fund, a long-term cooperation partner of The results were presented to the company board.Enterprise Europe Network-Latvia - turned to the In comparison to a SWOT analysis, this was fo-EEN-Latvia consultant. The business and its owners cused on innovation and Innovation Management,were stagnating; business was not flourishing as ex- was deeper and was more detailed. The respond-pected. The venture capitalist, owning the minority ent went through very specific questions and usedof the company, could not force the company own- certain figures in the answers, which would neverers to make radical changes. The venture capitalist happen with a SWOT analysis.asked EEN to organize some inspiring discussion forthe company owners, hoping to find a new, external Going through a Tough but Enlighteningview on the company’s business development. Learning ProcessAfter the company director agreed, the cooperation The company made a detailed innovation analysiscould start. However, at the beginning of the col- based on facts and figures. The strengths, weak-laboration, only one of the owners and the director nesses, threats and opportunities of the companywere really enthusiastic for the potential changes. were pointed out by the EEN IMP³rove consultant
60 High-Impact Innovation Management Consulting Services for SMEs and presented to the company board. This way, the tus of the company board members in society does company got an external view on of its business. not allow them to say openly that there is a need for learning. High personal ambitions are an impor- When presenting the results, the consultant em- tant obstacle to reaching a consensus for a solution phasized what kinds of activities were necessary to company problems. for the company in both the short and long term. Identifying the weaknesses and threats―such The company data, provided by the EEN IMP³rove as a low level of staff members’ involvement in consultant, an external source not involved in their company and innovation development, no system business, and the interpretation of the results were for the involvement of staff members in innova- surprising to the company board. It was a positive tion processes, gaps in company management, revelation to hear a detailed description of the gaps and a lack of formal process for new product and in company management, but it was an unpleasant service development―revealed that the IMP³rove disclosure that it was their own company that had assessment gave a clear picture of the necessary unsatisfactory management performance. activities to improve the Innovation Management and accordingly the performance of the company The IMP³rove assessment and its results provided both in the short and long term. It was concluded a clear company road map. Short- and long-term that the lack of a new and targeted innovation targets and deadlines for the company’s develop- strategy would eventually lead to the company’s ment were set. However, the lack of management collapse. staff commitment and the lack of learning―train- ing as well as learning from their own and others’ The presented results stimulated the company mistakes― were seen as real threats that the goals board to think actively about possible changes. would not be achieved. The dynamic thinking, using creative thinking methods such as brainstorming and de Bono’s IMP³rove Benefits Can Only Materialize if Thinking Hats system, was organized by the EEN There is Management Commitment IMP³rove consultant. The thinking hats method was very successful for structuring the creative In order to have a successful business, all of the thinking process. Using this method under the company management staff members must be leadership of the consultant as moderator made highly committed to the company’s business. the company board members look at the prob- lems from different, unusual points of view, avoid- The IMP³rove assessment tools are suitable for ing disputes and presentations of individual ambi- a detailed analysis of gaps in the business, particu- tions. This method helped them agree on common larly organisation of Innovation Management. solutions. Acknowledgement During the creative thinking session, concrete busi- ness ideas for the company, useful for business This case study was written by Gundega Lapina, supplementation and restructuring were developed. Latvian Technological Center, Enterprise Europe Network, Riga, Latvia. IMP³rove Generated Value for Specific Parts of the Process 5.4.5 THE NETHERLANDS The IMP³rove assessment confirmed the hypothe- Driving Through an Aluminum Forest sis of the EEN IMP³rove consultant: The company’s Thirty-year-old Dutch family-owned aluminum sys- problems were caused not only by external sources, tems manufacturing company. including the economic crisis and all related ob- stacles, but were also based on internal problems, Abstract which were clearly identified during the IMP³rove assessment. The main internal problems were Van Campen Industries is a Dutch family-owned caused by insufficient company management. high-tech aluminium systems production company with a focus on design-construct-maintenance pro- The company board consisted of high-level busi- jects. In 2009, they successfully produced an inno- nessmen, great personalities who were involved in vative sound barrier made out of aluminium tubes. other businesses and were not fully committed to These tubes reflect and absorb sound. Because of this company. The IMP³rove assessment also re- the company’s strong focus on R&D activities, it vealed a lack of commitment for all levels of staff solved several issues along the way, including di- and a lack of learning within the company. The sta- mension stability and fire resistance. The involved
High-Impact Innovation Management Consulting Services for SMEs 61innovation consultancy firm Van der Meer & van Having read the small article about Sempere’s workTilburg indicates that Van Campen’s clear strategy of art, Mr. Van Campen picked up this so-calledand perseverance and a well-managed innovation “weak signal.” A ticket to Valencia was booked forprocess are of key importance to the company’s an exploring mission. Van Campen understood thesuccess. latent value in the technology and started a prod- uct development process. A design, construct andIf you take the highway bypass of Eindhoven, maintenance project was taken on with a sizeableyou may wonder about the forest of aluminium Dutch contractor. Also, an architect was hired totubes that accompany the highway. Why is this al- accomplish the aesthetic value of the sound bar-most art-like structure placed here? Why is there rier, which Van Campen found of key importanceno concrete or glass sound barrier, as you would because the idea originated from a work of art.expect? Overcoming Other Kinds of BarriersIn 2003, the owner of Van Campen Industries, Mr.Van Campen, cut out an article from a newspaper Along the way, several issues had to be solved, suchthat struck his interest: “Scientists discovered that as the dimensional stability of the tubes becausea sculpture from the artist Eusebio Sempere in Va- the wave reflection depends on tubes’ exact di-lencia, Spain, absorbs sound.” The vertical metal mensions. The tubes have to achieve a 1.5kN/m2tubes that are placed in the artwork reflect sound wind load. A specialist partner, APT Curvers fromwaves. The reflected waves can interfere with each Roermond, was hired to execute the high-precisionother, resulting in either an amplifying or annihilat- extrusion process.ing effect. The decision was made to fill the tubes with rockThe company started in 1982 and is a family- wool, for which a special production method had toowned high-tech aluminium production facility be invented to produce round bars of rock wool towith a focus on design-construct-maintenance fill the tubes.projects. One of their main specialties is the con-struction of sound barriers, usually executed in Specialized research was assigned to the Dutch re-large collaborative projects with architects and search Centre TNO to assure that the sound barriercontractors. The company takes up an active role would be fire resistant according to the very strictin the research and development of such projects. norms of the Dutch highway agency, Rijkswaterstaat,The know-how that originates from these R&D ac- and that the acoustic demands would be fulfilled.tivities not only finds its way into Van Campen’sdatabase but also into the employees’ minds and Finally, a special tool was constructed to allow Vanthe company’s creative culture. The company uses Campen to drill millions of precisely located holesthis culture alongside their extensive materials in the tubes, without deforming the concave shapeknowledge and their advanced production equip- and while maintaining a good time efficiency. A ma-ment park to actively find solutions for their cli- chine was developed to punch 80,000 holes perents’ problems. hour with a distance of 10 mm. Figure 35: The Aluminium Forest accompanying the A2 Highway, Eindhoven (Photos by Van Campen)
62 High-Impact Innovation Management Consulting Services for SMEs Figure 36: Left: a Specially Developed Production Method for the Unique Sound-barrier Tubes (dedicated punching machine). Right: Production (Photos by Van Campen) Since the installation of the sound barrier in 2009, Erfindung, but that Durchsetzung is of equal import the project has spurred quite a lot of attention ance (see frames). Van der Meer & van Tilburg, who from the Dutch press. For once, the often disfigur- were involved in the project as innovation consult- ing sound barriers have made way for a beautiful ants, observed how Mr. Van Campen not only came alternative. In 2010, van Campen won the Europe- up with the idea but personally committed himself an Aluminium Award with this sound barrier, called to make sure the project came to realisation. One the Sound of Silence. In addition to the innovative of the leading principles at Van der Meer & van Til- design and realised technological developments, burg is that the innovation process consists of 10% the project was also recognized because of the ex- inspiration and 90% transpiration. While inspiration tremely high acoustic performance. The noise ab- can come naturally, the transpiration part consists sorption level is 20 dB(a) based at the EN 1793-1. of investing plenty of valuable time, making sound investment decisions, getting hold of the necessary Propagation of Innovation knowledge, establishing a clear communication and mutual understanding between the project partners, Why did this family-owned SME succeed in such taking care of innovation planning and having well- a prestigious project? Van Campen Industries envi- balanced financing and accurate administration. sions and executes a clear strategy―something you do not regularly encounter among SME companies. This is where the IMP³rove consultants can create Van Campen strictly focuses on its own core com- added value for SMEs. Small and medium-sized petencies and knows when to outsource specialized companies can increase their competitiveness by work. The company generally only takes on the pro- using Innovation Management to bring their inven- duction of aluminium objects through bending, mill- tions to realisation. By benchmarking their Innova- ing, punching and joining. Other aspects, such as tion Management and establishing a practical road- aluminium extrusion and the installation of finalized map for improvement, SMEs create a sustainable products, are outsourced to carefully selected part- way to drive their inventions to success. ners with whom they often have a long-lasting work- ing relationship. Furthermore, the company gains competitive advantage by merely executing pro- ERFINDUNG DURCHSETZUNG jects with distinctive characteristics that match their unique competences of non-standard solutions with Invention Enforcement a high degree of novelty and a strong added value. Fiction Persistence Another important characteristic of Van Campen is Fabrication Prosecution perseverance. As early as the 19th century, the in- novation pioneer Joseph Schumpeter already cap- Brainchild tured that innovation does not only consist of mere
High-Impact Innovation Management Consulting Services for SMEs 63Benefits from IMP³rove AcknowledgementThis company is doing very well. The order portfo- This case study was written by Ir Gosse Hiemstra,lio is good, and so are the profits. The company is Van der Meer & van Tilburg, Zeist, Netherlands.continually giving attention to innovation, leadingto new commercially successful products with high 5.4.6 SPAINadded value. It brings the company into the premierleague of Dutch SMEs. What can IMP³rove add to Developing an Innovation Strategythis company? Does it really have something to con- Twelve-year-old Spanish-based supplier for traffictribute? The answer is yes. control and surveillance systems with seven staff members.First, the IMP³rove database gives van Campenthe opportunity to benchmark itself against one Abstractor more selections of companies in the database.The database makes it possible to compare itself This case examines how the IMP³rove assess-with growth champions and average performers in ment and the following consulting workshops weresectors, such as the metal producing sector. It also an eye-opener, pointing out the SME’s key weak-gives possibilities to benchmark itself against a se- nesses in Innovation Management. Data analysislection of companies from other regions. This helps reveals that the company had not defined clearanswer the following questions: How good are we? performance indicators to measure the success ofAre we really as good as we think? Can we be satis- their innovation project. Innovation Managementfied, or is there potential to improve? was not formally implemented in the organisation and was driven just by the CEO. Since undertakingSecond, when the answer to this last question is the IMP³rove assessment, the SME has developedyes, as it should be, IMP³rove does not leave the an innovation strategy and is adopting means ofcompany alone to find possible areas for improve- measurement to enable the company to assess thement. The Innovation Management performance of results of its innovation more accurately.a company is assessed on five dimensions: innova-tion strategy, innovation organisation and culture, Surviving under Innovation Pressureinnovation life-cycle processes, enabling factorsand innovation results. These dimensions are sub- The IMP³rove assessment was performed fordivided into several factors. The evaluation report a company recognized as one of the leading sup-resulting from the assessment tool shows how pliers of traffic control and surveillance systemsa company is doing on all five dimensions, how the (TCSS) in Spain. They are based in Madrid and havegrowth champions are doing and what the aver- a subsidiary office in Atlanta, Georgia, in the Unitedage score is. Possible areas for improvement are States. The company has seven staff members anddetected and brought to the surface. is 12 years old.The IMP³rove benchmarking report provides In that niche market, being highly competitive de-a wealth of information about the company’s in- pends on the capacity to be truly innovative andnovation performance―sometimes too much for creative in developing and launching new success-a company to digest and select the areas for im- ful products and services and revenue models. Thisprovement with the highest potential. Generally, the was a daunting challenge for this SME, which lackedassistance of an experienced consultant is needed proficiency in Innovation Management.to dig up the gold nuggets of improvement. When the company made the first assessment, theyA company can apply for a re-assessment after, for were defining the specification of the next genera-example, two years to see how they are performing, tion traffic video enforcement systems.on what points they realised growth and where themain areas for improvement are. The IMP³rove data- In Need for a Systematic Approach to Innova-base gives every SME the opportunity to compare its tion Managementperformance objectively with the performance of rel-evant groups of companies―quickly and efficiently. One of the company’s shareholders recognizedIt would cost an experienced consultant several days that having a systematic approach to Innovationto bring the same amount of facts and insights to Management is a key element to success for thethe surface. This is a precious opportunity, even for company. Therefore, they requested Upsellinn’s In-a company that is considered a high performer. novation Management consulting services in order to help them to thoroughly develop it.
64 High-Impact Innovation Management Consulting Services for SMEs Upsellinn Performance, S.L., a Spanish services ment performance and the detailed evaluation of company, provides a range of business-to-business each dimension of the A.T. Kearney House of In- (B2B) consulting services, all of which support novation: innovation strategy, innovation organi- companies in their sale, marketing and business sation and culture, innovation life cycle processes, development strategies. The core services include enabling factors and innovation results. After that, Inbound Marketing (get found online), outbound the consultant chose a date for the workshop with marketing (providing the essential human touch), a proposed agenda. comprehensive demand generation (unifying both inbound and outbound marketing) and, af- The results of the first assessment can be seen in ter becoming a certified member of the European figures 37 and 38. IMP³rove Network Partners in December 2010, adding Innovation Management consulting services As visible above, the company had a poor over- to its portfolio. all rating compared with the average and growth champions, but the most astonishing result was the The IMP³rove approach allowed identifying those rating for innovation strategy dimension: 0%. areas of Innovation Management that the compa- ny should work on with high priority to improve its The client’s workshop was fundamental for identi- performance. In addition, the valuable information fying potential tools that could be used to develop provided by the detailed evaluation would be used an innovation strategy as a first step to overcoming to find a partner to co-operate in the next genera- the critical issues showed by the report and at the tion traffic video enforcement systems, as well as workshops. To support strategic thinking in a for- to apply for funds to finance that project. mal way, the tools used were SWOT analysis, cus- tomer needs assessment and scenario techniques. IMP³rove assessment was used as an approach to providing long-term support for managing their in- The IMP³rove root cause analysis was not per- novation activities. The customer found the assess- formed because the customer believed that the ment tool thorough, even stating that the question- assisted IMP³rove assessment and the workshops naire was too long and exceeded their expectations. raised their attention to critical points for develop- In three occasions, the customer found some of the ing an innovation strategy, which they needed to questions somewhat difficult to understand, but take care of instantly. with the help of the consultant, the assessment was successfully completed within the agreed-upon Taking Action and Implementing an Innova- timeframe. tion Strategy After the assisted IMP³rove assessment was com- After three months, the company reassessed their pleted, Upsellinn reviewed the report that the as- Innovation Management performance to monitor sessment generated, taking into account both the how they had improved. The results of the second company’s overall score on Innovation Manage- assessment can be seen in figures 39 and 40. Figure 37: Overall Innovation Management Performance (Starting Point)
High-Impact Innovation Management Consulting Services for SMEs 65 Figure 38: Overall Innovation Management Performance by the Various Dimensions (Starting Point)The company’s quantitative ratios did not improve understood by customers, suppliers and in-in this short period of time, but the company imple- novation partnersmented an action plan that resulted in the following: • Developing an innovation controlling sys- tem to define KPIs and better analyse • Using the IMP³rove results in internal man- and monitor the company’s innovation agement meetings to discuss the strate- activities gic role of Innovation Management for the • Starting to cooperate with the University of company’s sustainability Alcalá in Spain in a 24-month project for the • A new vision for innovation documented and next generation of traffic video enforcement shared with all the staff members and well systems Figure 39: Overall Innovation Management Performance (After Implementing an Innovation Strategy)
66 High-Impact Innovation Management Consulting Services for SMEsFigure 40: Overall Innovation Management Performance by the Various Dimensions (After Implementing an Innovation Strategy) • Getting public funding for that project (IN- Iphonedroid: Creating a New Business Model NPACTO programme from the Ministry of Based on the Establishment of a Network of Science and Innovation of Spain) Specialist in Innovation Spanish-based young ICT company with 15 employ- The company considered the regular assessment ees active in the development of custom software. as valuable, stating that they wanted to evaluate their competitive position on a regular basis and did Abstract not see IMP³rove as a one-time exercise. Although Iphonedroid has developed small software Benefiting from Recurring IMP³rove assess- applications to be sold in stores such as Apple’s App ments as a Routine Store, its main line of business is developing cus- tom software for customers who need to exploit As a company with its main focus on innovative their information systems and customers who want products and services, measuring performance and to incorporate a new line of business through cus- effectiveness of Innovation Management is crucial tomized software for mobile devices. With a new for profitable growth. The structured benchmark- business line, the company’s growth and consolida- ing report, based on a dynamic European database, tion should be achieved. is a key value proposition of the IMP³rove plat- form because in, less than 30 minutes, the SME Looking for a New Business Line for can download a report that provides up-to-date Iphonedroid benchmarks showing the SME’s current competitive position. Iphonedroid is a young ICT company that was founded to bridge the gap that exists within the Acknowledgement field of software development for mobile devices in Spain. Iphonedroid has a staff of 15 technicians This case study was written by Juan Campos, man- and a number of freelance contributors, with sig- aging director of Upsellinn, Madrid, Spain. nificant growth expected over the next three years.
High-Impact Innovation Management Consulting Services for SMEs 67To diversify its business, Iphonedroid decided to • Identify improvement opportunities prior-open a new line of business to develop and sell its itized by their contribution to key businessown products. Through the sale of its products, Ip- results: time, cost, financing and return onhonedroid expected to get the income and resourc- investmentes needed for growth and consolidation. • Get a structured analysis of the capacity for innovation: strategy, organisation and cul-To develop its new business model, the main chal- ture, processes, enablers and resultslenge was that Iphonedroid needed to know if itscurrent structure would support successfully devel- The deliverables that Iphonedroid received fromoping new products or if it must rely on external Gest InnovaIde are as follows:innovation experts to help it, for example: • Comparative report by sector and geogra- • Find and get financing for their new products phy (IMP³rove assessment): The results of • Systematize its innovation processes comparative analysis and key opportunities • Quantify the time to market: How many for improvement are related to geography months does it take to get from the begin- or selected sectors in two reference groups: ning of development (project authorization) winners and half of the sector or group. to putting new products on sale? In this report, Iphonedroid undertakes an • Quantify the time to profit: How many assessment of the company’s Innovation months does it take on average for compa- Management capability based on a struc- nies to go from project authorization to the tured questionnaire. The key value delivered break-even point? by the IMP³rove assessment is a bench- • Quantify the profitability obtained after the marking report evaluating the current Inno- marketing of new products vation Management performance on three levels: The overall performance of the com-In order to find the right answer to these issues, pany, the performance per dimension (in-Iphonedroid knew a first step should be to deter- novation strategy, innovation organisationmine its own innovation capabilities and make and culture, innovation life cycle processes,a diagnosis of its Innovation Management. The enabling factors and innovation results) andchallenge Iphonedroid was facing consisted of the performance on each question, repre-two parts: senting a specific success factor or theme • Opportunities report: This contains organi- 1. Know its current state of innovation sational and industry knowledge that helps 2. Identify opportunities for improvement in define early wins based on the sector and innovation and how it could carry them out geographical benchmarks for achieving a sustained competitivenessOnce Iphonedroid concluded that they needed to • Roadmap: To complete the process andidentify improvement opportunities and implement open the door to action, Gest InnovaIde de-them, then the next problem was how to do it and livered a report that defines actions for im-who could help in that process. Iphonedroid hired provement opportunities and places themGest-InnovaIde to help. Gest-InnovaIde recom- on a road map. The actions are prioritizedmended using IMP³rove. and timelines defined. This report is dis- cussed in a final brainstorming session. TheClear Expectations for the IMP³rove report includes:assessment 1. Executive Summary 2. Opportunity Heat MapWith the IMP³rove platform and Gest-InnovaIde’s 3. Inventory of Initiativesadvice, Iphonedroid expected the following results: 4. Joint initiatives by Category 5. Initiatives Sheets Reviews • A comparative analysis, developed by Gest 6. Roadmap Initiatives Reviews InnovaIde, would provide a structured space 7. Final Recommendations for reflection and debate on the different aspects that make up its ability to manage With a Step-wise Approach to Actions innovation and compare itself with other companies, both in its industry and outside With the assistance of Gest-InnovaIde, Iphone- • The diagnosis should consider the competi- droid provided the necessary information for the tiveness of the sector, between sectors and IMP³rove benchmarking report and thus gained an on national and European levels understanding of the IMP³rove assessment frame-
68 High-Impact Innovation Management Consulting Services for SMEs work. After analysing the IMP³rove benchmarking products. Gest-InnovaIde helped Iphonedroid se- report, two reports were developed for Iphonedroid: lect the financing innovation specialist with the best experience, quality and fees. Iphonedroid has 1. Positioning of the organisation regard- presented a project for funding to the selected ing innovation and identifying opportuni- specialist and is awaiting the decision. ties for improvement and early wins: Using IMP³rove, which is the European framework In the medium term, if Iphonedroid gets financing for the analysis of innovation capability, for its new product, the company will determine Gest InnovaIde divided the five dimensions whether it needs to implement other improve- of Innovation Management (innovation ments to become more competitive, productive and strategy, innovation and culture organisa- sustainable. tion, innovation life cycle processes, results and innovation enabling factors) into indi- Do Not Underestimate Innovation Manage- vidual innovation sessions to gain the infor- ment as Engine for Competitiveness mation required for the analysis. There is, on average, a total of seven sessions, in- At Gest-InnovaIde, we believe it is very important cluding the final session for presenting the that companies are aware that if they do not inno- results and action plan. Each session takes vate, they could disappear. Companies should think around 2.5 hours of innovation as the engine that can help them 2. Opportunities Report and Roadmap for Im- increase their competitiveness, profitability and provement: Gest-InnovaIde translated the sustainability. above report into a list of early wins for achieving a sustained competitiveness for Companies should know what condition they are Iphonedroid in the short term and medium in for Innovation Management. IMP³rove is the term. Gest-InnovaIde created a base report perfect tool to allow them to compare themselves that defined actions for improvement op- with other companies in their sector, size, country portunities and placed them on a road map and age, or even with other companies outside that is discussed in a final brainstorming their industry. To take full advantage of IMP³rove, session. The assessment is expected to last companies should hire a consultant to guide them between one and three weeks through the steps that should be taken to increase their profitability. Improving the Innovation Live Cycle Manage- ment in Preparation for Public Funding Finally, at Gest-InnovaIde, we believe the com- panies who want to succeed through innovation The result was a list of improvement opportunities should collaborate with innovative institutions, mainly in the dimension of the life-cycle processes. such as universities, technology centers and ex- The opportunities included the following: perts in strategy, financing innovation and creat- ing new innovative business models. Companies • Reduce the time of the life cycle: the num- should rely on the concept of open innovation ber of months between when a product’s and keep in mind that there are actors in innova- development begins (project authoriza- tion that can help them manage innovation and tion) and when Iphonedroid takes it off the increase their competitiveness, profitability and market sustainability. • Use open innovation as a source of new ideas so Iphonedroid can receive new ideas Acknowledgement from suppliers, customers and partners • Establish an R&D management system that This case study was written by David Barbero would help Iphonedroid systematize its in- García, co-founder of Gest Innovalde, Madrid, Spain. novation activities • Obtain public funding that would allow Ip- 5.4.7 SWITZERLAND honedroid to finance the development of its new business model Making Innovation Tangible: Getting to an In- • Patent the disruptive products novation Management Action Plan • Monitor the time to market and time to Cergios-Pharma SA, located in Switzerland and profit founded in 1994, is a mid-sized active phar- maceutical ingredient manufacturer with 106 After the roadmap session, Iphonedroid decided to employees. start by seeking public funding for creating new
High-Impact Innovation Management Consulting Services for SMEs 69Abstract This organisational setting and culture for develop- ing new products has proven to be inappropriateWhen joining Cerbios-Pharma in early 2009, the in the company culture and approach in an eco-new CEO already planned to evaluate the compa- nomic context, where success is strongly related tony’s innovation potential and approach. Thanks to the ability to rapidly respond to changing market’sthe IMP³rove approach and consultancy work, he needs by adapting procedures and organisationaldefined a new corporate strategy, integrating Inno- processes. This doesn’t undermine the importancevation Management as one of the four key pillars of having well-established R&D activities. Interac-for building a sustained competitive advantage. In tions with other units―such as marketing, produc-the past, innovation at Cerbios has only been as- tion, purchasing department and logistics―andsociated with R&D activities (new products) with collaborations with stakeholders will better addresslittle attention on innovation in general. Bringing Cerbios’ activities to avoid significant investmentsa new perspective on innovation―encompassing in inventions that unfortunately have no marketothers types such as process, organisational and demand. Knocking down borders among organisa-business model―innovation has been identified as tional units and actively engaging with stakehold-a key driver for actively responding to rapid chang- ers will allow Cerbios to convert more ideas intoes in the economic environment. This new view of projects that in turn will leverage the impact ofinnovation requires major interventions, both at innovation activities and the company’s economica structural and cultural level. To be effective, new performance. Time-to-market and overall projectmanagerial practices need employees’ engagement cost containment are two key challenges that canto foster new ideas from different organisational be achieved through innovation at all levels.units. Expanding the View beyond Product InnovationEmbedding a Broader Understanding of Inno-vation Management Having identified the need to better promote innova- tion in all its various forms within the organisation,Cerbios-Pharma, located in the Barbengo district Cerbios recognized the need for a systematic ap-in Lugano, Switzerland, is a privately held active proach to align existing and develop new Innovationpharmaceutical ingredients (API) manufacturer. Management practices. The IMP³rove assessmentCerbios is a medium-sized company founded in was a great starting point to better understand the1994 through the merger of three companies in state of the art and developing a cross-functionalthe pharmaceutical and chemical industry. APIs dialogue. This stage was an extremely importantmade by Cerbios-Pharma cover small molecules time to share with employees the new perspective(chemical division), large molecules and probiotics on innovation. The motto created by Cerbios’ team(biological division) sold to pharmaceutical com- during one of the four workshops is emblematic ofpanies located mainly in the European Union, the this: I→E=mc2 (Innovazione: Energia = migliora-United States and Japan. Service for third parties mento per la crescita per la Cerbios, Innovation: En-in exclusive manufacturing is concentrated in the ergy = improvement for the growth of Cerbios). Thisarea of high-potency active ingredients (HPAI) for initiative’s goal was to educate employees on theirthe chemical division and recombinant proteins for pivotal role in developing and sharing new ideas.the biological division. Full preclinical support is Innovation doesn’t merely take shape in R&D.given to its partners to provide them with clinicalbatches, registration and validation material and At the same time, the board of directors had tocommercial manufacturing. Paramount to that is identify innovation initiatives and work out an ac-supplying all documentation required for a suc- tion plan based on the IMP³rove method, whichcessful registration. promoted different types of innovation and contrib- uted to instilling an innovation culture within theCerbios has been very successful in the past 10 organisation.years, growing from 65 employees to 106 in 2011and expanding their activities in both chemical and Supporting the Change to Embed Innovationbiological areas. Nevertheless, turnovers and per- in the Entire Organisationsonnel growth were not followed by an organisa-tional change or adaptation to the new situation. Developing a detailed action plan, including initia-The major challenge for Cerbios and the new man- tives seeking to promote innovation at a structuralagement team was shifting from invention to in- and cultural level, was the objective of Ticinotrans-novation. R&D labs with skilled scientists were act- fer’s consulting service. The following initiativesing more as independent units, sometimes isolated have been identified and implemented, referring tofrom the rest of the company and its stakeholders. the A.T. Kearney House of Innovation method:
70 High-Impact Innovation Management Consulting Services for SMEs • Analysing and understanding the role of in- departments of the company discussed the results. novation within the corporate strategy The team agreed to carry out an in-depth analysis • Appointing an Innovation Management by interviewing 20 employees who worked in dif- team coordinating innovation activities ferent organisational units at various hierarchical within Cerbios levels of the company (horizontal and vertical ex- • Disseminating among the different hierar- ploration). In fact, to get a comprehensive snapshot chical level (vertically) and organisational of the company’s innovation capabilities, interviews units (horizontally) the new organisation’s were indispensable considering that the IMP³rove perspective on innovation assessment was executed with the board of direc- • Exploring internal and external sources of tors. Only after analysing the information from the innovation: promoting cross-functional in- interviews was it possible to arrange workshops teractions, mapping and extending rela- with the innovation team to develop an action plan tionships with external actors (stakeholder comprehending several short-term initiatives to be engagement) implemented. • Reinforcing the role of innovation through existing management practices and tools, Enhancing the Innovation Potential such as the management by objectives (MbO) performance management system, Implementing all the initiatives developed within while at the same time defining incentives the action plan is, for Cerbios Pharma, a mid-term and reward plans strategic goal to enhance their innovation potential. • Developing and aligning the different stag- Currently, an innovation team promoting innovation es of the innovation lifecycle process: idea at a structural and cultural level has been appointed management, project management, launch and is guaranteeing the implementation of the re- and continuous improvement maining initiatives. Much effort has been directed to facilitating interactions among organisational units Involving the Organisation in the Process and the company’s stakeholders. Results―in terms of increased proposals from employees for improv- Once the IMP³rove assessment had been carried ing services to customers, manufacturing processes out, an innovation team representing the different and ideas for new and improved products―have Figure 41: Steps from IMP³rove Assessment to an Action Plan
High-Impact Innovation Management Consulting Services for SMEs 71been positively evaluated and selected by the in- Acknowledgementnovation team. Some of these ideas have beensuccessfully implemented with impacts in terms of This case study was written by John Gaffuri, inno-increased productivity, products quality, customer vation coach, Ticinotransfer, rete per il trasferimen-satisfactions and financial performance. The com- to di tecnologia e del sapere della Svizzera italiana,pany has stressed the importance of innovation Manno, Switzerland.within annual employee performance appraisals bysetting goals related to innovation. This will hope- 5.4.8 UNITED KINGDOMfully produce some benefits in the years to come. Tinsley Bridge Limited: Returning into the ProfitIn conclusion, the board of directors is fully con- Zone One Year after the IMP³rove Programmevinced that, having developed an approach to man-age innovation and having appointed a dedicated UK manufacturer of automotive components asinnovation team, the company will reinforce its a management buy-out in 1987 employs 120leadership position over competitors. people.Successful Innovation Management Requires AbstractPassion from Leadership Suffering from a downturn in the automotive in-In addition to all the scientific and methodological dustry, Tinsley Bridge Limited assessed their Inno-issues that are fundamental to developing a suc- vation Management capabilities, identifying areascessful Innovation Management approach, which for new business that moved them from loss intohave been previously described, the role of the substantial profit-making markets.CEO is crucial. Openness, engagement and beingwilling to learn and change are attitudes that the Facing Decline in Demand from the Automo-CEO should have in order to get the very best out of tive Industrythe consulting process. This open-minded attitude,positively affected key people within the company. Tinsley Bridge Limited, located in the United King-For Cerbios, the changes involved to meet Innova- dom, is a manufacturer of automotive components.tion Management requirements were successfully The company is the UK’s biggest supplier of stabi-implemented because the management team was liser and torsion bars to the original equipment (OE)eager and enthusiastic to improve the status quo. commercial vehicle sector. The company producesStrongly motivated managers are indispensable to a wide range of parts, specialising in large diametermaking innovation work and getting everybody on parts for trucks. The company was the first to de-board to move away from stagnant thinking such velop the parabolic leaf spring technology, which isas “I have always done it this way, and it is working. now fitted to more than 80% of trucks worldwide.Why should I change?” The company is located on a six hectare site in Shef- field with a manufacturing factory of 20,000 square meters (SqM). It has been established for more than 150 years and, in its current form, is a management buyout from British Steel Corporation in 1987. Figure 42: Tinsely Bridge Ltd. Manufacturer of Automotive Components
72 High-Impact Innovation Management Consulting Services for SMEs The company has significant in-house capabilities the challenges of improving innovation for engineering design and testing of components. performance It has a metallurgical and materials testing labo- ratory, and manufacturing processes include preci- Back on the Growth Track with New Businesses sion forging and heat treatment. It employed 120 people and had a turnover of £10million at the time IIS identified a programme of work to address the of engagement. issues as follows: Tinsley Bridge’s managing director and technical 1. The development of a vision and strategy director attended an International Innovation Ser- 2. The identification of growth market sectors vices (IIS) seminar at the University of Sheffield into which it could diversify using existing about growing revenues in manufacturing compa- capabilities or new skills and processes nies, after which IIS consultants were invited to visit where appropriate the Tinsley Bridge factory and offices. 3. The installation of a commercialization sys- tem that would enable the company to: During an initial consultation, information emerged a. Screen a greater number of business that revealed the company had lost 50% of its opportunities turnover because of a downturn in the automo- b. Plan and manage the development of tive sector. The company had recently made 50 a route to market employees redundant, with the remainder working c. Reduce the cost and risk of develop- only three weeks out of four. The company agreed ment and launch that overly depending on one sector would make d. Reduce the time to market the company vulnerable. The intention of IIS was to 4. Provide a source of technology driven busi- help Tinsley Bridge grow and diversify. ness opportunities including the following: a. Manufacturing licenses Identifying the Gaps in Innovation b. Company acquisitions Management c. Investment opportunities in early stage technology companies IIS undertook the IMP3rove Innovation Manage- d. Patents and intellectual property ment assessment process and conducted client e. Technology offers interviews with the whole management team. A 5. Advice on organisation and Innovation summary of the report findings determined the Management following: As a result of these activities, the company has • Tinsley Bridge Limited had no overall vision started three new businesses and is engaging with or strategy for innovation and business de- two that are new to the company supply chains― velopment that could significantly improve railways and defence―and establishing a new revenue and profitability. This lack of vision, service and maintenance business for large OE in- together with a focus on short-term objec- dustrial clients. The company has also purchased tives, came out of recent commercial and a fabrication business to provide additional fabri- financial challenges cated solutions to industrial clients. • There were significant gaps in the com- pany’s innovation capacity that needed to The company has now turned a £160k loss into be addressed. The company undertook too a £1.4 million profit within one year of the IMP3rove few incremental innovation projects, and no programme. radical innovation projects, that could posi- tively increase turnover and profitability For Successful Implementation of Innovation • When the company engaged in incremental Management, the Consultant Can Only be the innovation, it did it extremely well. The com- Catalyst pany lacked the pipeline of products, tech- nologies and ideas (particularly radical) that From this engagement, key success factors can be is required to improve performance derived: • The company’s existing innovation pro- cesses and procedures could not process 1. The strong learning culture and robust man- a higher volume of incremental or radical agement team enable very rapid progress innovation projects 2. Companies need to understand which mar- • The company had a strong learning culture kets are growing and which technologies and organisation and would adapt well to are potentially market-disruptive
High-Impact Innovation Management Consulting Services for SMEs 73 3. Most companies don’t have formal com- to ensure that the company was prepared for new mercialisation systems, a fundamental re- and potentially disruptive emerging technologies. quirement for managing growth installed as Although the company attempted to keep abreast part of its business functions of changes, the IMP³rove assessment highlighted 4. The consultant is only the catalyst to pro- the need for a strategic approach to developing vide appropriate information, tools, tech- knowledge partnerships with appropriate universi- niques and guidance to enable growth ties that are involved in and aware of developments in the electronic sector. This meant that the com-Acknowledgement pany was now taking an open innovation viewpoint rather than relying solely on its own knowledge.This case study was written by Steve Dore, Interna-tional Innovation Services, Sheffield, UK. The company’s value, to date, has been dependent solely upon the service to its clients and the incomeInnovation for a Digital SME generated. Given retailers’ focus on costs, these re-UK-based fast-growing electronic repair company lationships are likely to be based on a commoditisedwith more than 50 employees. price rather than on adding value, and as such, con- tinued loyalty from retailers will probably be limited.Abstract The need to focus on providing leading-edge services is essential in the short term, and the company wasOperating in the fast-moving digital equipment starting to develop feedback processes for employ-repair business, the company had grown from ees through a staff member suggestion scheme. Buta one-man business to a 50-plus employee organi- the extent of this was limited and needed to be ex-sation. Looking for additional value-add disruptive tended to include an Innovation Management focus,technologies are observed in collaboration with re- capturing ideation through to commercialisation assearch institutions. At the same time, intellectual well the creation of innovation teams. The IMP³rovecapital is better protected and opportunities to de- assessment highlighted that the company had novelop an own range of products are investigated. mechanism for developing and protecting intellec- tual property, which needed a strategic approach toMaintaining Added Value ensure intellectual assets are captured.Originally, the owner of the company provided cam- The review of the company’s business plans and fi-era repair support to retailers from his garage. Over nancial situation identified that its existing focus wastime, the business established an expertise in repair- on the financial returns from key clients. There wasing digital equipment, and its customers included no tracking of the value and costs of products andmany of the UK’s leading retailers. Its clients are services, and the lack of budget lines for the develop-major players in the digital products market and part ment and protection of intellectual property meansof a fast moving sector where change is a given. The that there was no stimulation or monitoring of suchcompany grew rapidly from the owner’s garage to activities. To effectively drive the business forward,a custom-built location. As part of a fast-moving there was a need to establish an innovation Balancedsector with new technologies and techniques com- Business Scorecard, ensuring that targeting and re-ing on board almost daily, was once a one-man band wards reflect the wider range of activities needed.quickly grew to a 50+ employee business. After themove and the need to look at process efficiencies, In these circumstances, it is important that the com-the owner wanted to consider developing added val- pany looks at the potential to develop income streamsue, both for its client base and for shareholder value. over which it has more control. One of the opportuni- ties identified was the development of a range of ownFrom a Strategic Review to Implementation of branded products. However, at present, the considera-Value-Adding Innovation Management tion is for “me too” products, and there is a need to use the innovation potential of their employees linkedThe first stage was a strategic review of the compa- with external partnerships to provide a range of prod-ny and its markets with a focus on their innovation ucts that differentiate from existing players.capability. This review included discussions with keypersonnel and a review of business plans, results to As a result of the first-stage review, a roadmap wasdate, business processes, Innovation Management drawn up to provide the business with a plan forand industry partnerships. costing and implementing the recommendations. This has enabled the business to stagger the chang-Given the fast-moving nature of the sector, it was es to ensure minimal disruption and maximum buy-essential that there was a focus on “future gazing” in from the workforce while managing costs. The
74 High-Impact Innovation Management Consulting Services for SMEs initial focus is on innovation skills development and focusing solely on the development and distribution team development, including creativity workshops, of its proprietary software products. The company ideation to commercialisation programmes and was successful, having developed a significant a review of HR support for incorporating innovation niche in its target market based on the knowledge training programmes. the company had developed about its customers. As with all small businesses, securing the neces- With the IMP³rove approach, the consultant, Busi- sary resources was a challenge, but this did not ness Dynamix, was able to demonstrate to the prevent the company from achieving moderate company the need to embrace Innovation Manage- growth. However, LEVESYS believed it could go fur- ment and the impact it will have on the bottom line. ther. It had a feeling that its R&D process was inef- IMP³rove helped establish a long-term relationship ficient and allowed for development blowouts and and provided the opportunity to introduce concepts, “feature creep.” However, the company did not be- such as open innovation, that the company would lieve they could articulate the problem sufficiently previously have seen as unimportant. to seek the assistance they required. Some of the management team knew something needed to be Acknowledgement done and that a change needed to occur. They knew they needed to engage in innovation somehow, but This case study was written by Peter Ives, Business they did not have any idea what it was or how to go Dynamix, Enfield, UK. about engaging in it. 5.4.9 AUSTRALIA Trigger for Change: Customer Demands New Offering LEVESYS: Innovation Management Enabling a Conversation about the Future QMI Solutions (www.qmisolutions.com.au) is a not- Australia-based, 22-year-old family-owned soft- for-profit company dedicated to improving the ware company with 17 employees. skills, performance, innovation and capability of the Queensland manufacturing industry. As part of Abstract their innovation service offering, they were piloting the IMP³rove programme with Queensland-based This case study reports on the impact and busi- businesses. As part of the industry engagement, ness transformation of an IMP³rove assessment a breakfast seminar was held with about 30 busi- and follow-up workshop on Australian SME LEV- nesses. LEVESYS was one of those attendees. ESYS (www.levesys.com), which was undertaken by Based on the material provided, LEVESYS imme- QMI Solutions. Innovation was not a foreign term diately believed the IMP³rove programme could to the company, which focuses on the development help their company identify and understand their of enterprise resource planning (ERP) software for innovation challenges. As the director of LEVESYS the Australian construction sector. However, before noted, “The seminar presented IMP³rove as a ve- seeing and undergoing the IMP³rove process, this hicle to show companies what the problems were company had difficulty articulating their innovation rather than what the potential solutions would be.” problems and, therefore, had not achieved growth However, although this seminar provided an oppor- targets from its R&D efforts. This case study high- tunity for change, having the knowledge of what lights the role of IMP³rove in assisting LEVESYS to might be possible is often not enough to get SMEs take the first step in transforming itself through to engage with the change process. In this case, innovation. a LEVESYS client had asked the company to push the boundaries on their product offering and go Getting Started: How to Engage in Innovation beyond current developments. This client saw the value of LEVESYS’ market intelligence to develop LEVESYS is an Australia-based SME that designs, a new offering. Therefore, the combination of new develops and supplies the highest quality soft- knowledge and client push provided the right envi- ware and services to address the particular needs ronment for LEVESYS to consider change. of companies in the construction, engineering and service contractor industries in Australia. LEVESYS Beginning the Change Process clients grow and succeed by using the company’s products and services to become more efficient, An IMP³rove assessment session was scheduled more accurate and more reliable. Established for with a QMI consultant. All of the assessments more than 22 years, this family-based business QMI were undertaking during the pilot phase were employs about 17 staff members in Brisbane, Aus- consultant facilitated, as QMI’s experience with tralia. Before the IMP³rove audit, the company was benchmarking programmes indicated that the con-
High-Impact Innovation Management Consulting Services for SMEs 75versation with the client was just as important to they now believe they can discuss this openly andthe benchmarking score. The IMP³rove assessment all get on the same page to allow the real oppor-was undertaken with three members of the execu- tunities to innovate rather than just be debated.tive team, conducted over a three-hour period in IMP³rove was giving them the language to havetheir offices. When asked about their experiences this conversation.during the assessment, the company mentionedthat they were able to have a conversation about Achieved Results: Moving from Software De-innovation without becoming defensive and emo- velopment to Consulting Services for the Con-tional. At the completion of the assessment, the struction Industrycompany believed they had a solid, robust discus-sion about the strategy and challenges within their Before the IMP³rove programme, LEVESYS wasbusiness. a product-based business that was achieving mod- est growth. Through IMP³rove, they have trans-After receiving the IMP³rove benchmarking report formed into a world-class consulting service suppli-and the consultant’s analysis of the data, LEVESYS er to the construction industry that, when required,immediately believed they needed to focuses on can also provide an added product platform. Thethe R&D process. Although not low, these scores company now has the value-adding ability to ex-identified specific gaps that they could address ploit their intellectual property further through theirimmediately, such as setting project targets and service offering. LEVESYS now understands theirseparating R&D activities from daily operational customer value proposition much more clearly andactivities. However, after further discussion with has structured their product releases accordingly.the consultant and then finding the time to go into They understand the value that services play withingreater depth into the individual sections of the their business, and in doing so, they have reframedreport, LEVESYS realised they also needed to look the business problem to be understood from theat their organisational culture, which was their low- customers’ perspective. LEVESYS now runs theirest score. Upon deeper reflection, the spider chart projects in the same way their customers do busi-in the IMP³rove benchmarking report showed the ness, so the company is able to understand its cus-organisation that they could have the most techni- tomers much more clearly than before.cally competent software development people onearth, but if they did not know what their custom- Conclusioners want, then it does not mean a thing. Therefore,a connection must be made with the way the teams Before entering the IMP³rove programme, LEVESYSwere working and how they engaged with custom- understood innovation. However, they believed thisers and then capture their passion in the software could only be executed within the company if theredevelopment process. was a willingness and desire to transform. This drive came from a major customer rather than fromImplementing Change IMP³rove itself. However, having the tool available was a key enabler to immediately start the process.Once LEVESYS defined an innovation strategy (withthe assistance of QMI Solutions) and agreed that Further, the company was adamant that QMI So-they needed to grow the business, the shift within lutions’ process facilitation was critical to the suc-the company was made from a product focus to cess of the audit process. Through the consultinga service offering for the construction industry. process and with the use of the IMP³rove platform,Customers then became the driver of the develop- their unique business challenges could be identifiedment process, and focus turned more toward keep- rather than treated as a generic set of issues.ing customer needs met rather than focusing onsoftware feature development. They then began to In the words of the company, “The IMP³rove pro-prototype, mock up and test solutions with various gramme has opened the door to the future for ourbrainstorming techniques. The staff members were company. It has allowed us to see our potential op-involved with the rollout of the changes and were portunities, and it has enabled us to transform theexcited and proud to work at LEVESYS. way we do things as a team.”After nine months, they believed they were still Acknowledgmentsat the beginning of this process. It was apparentthat management still had different opinions about This case study was written by Dr. Sam Bucolo andwhat a successful business was. One person’s Dr. Cara Wrigley from the School of Design, Queens-view of this was about growth while another’s land University of Technology. Dr. Sam Bucolo alsowas about developing the best software. However, holds a joint appointment with QMI Solutions, which
76 High-Impact Innovation Management Consulting Services for SMEs participated in the facilitated IMP³rove assessment SMEs. With the IMP³rove approach, very different with Bruce Macaulay from QMI Solutions. Special challenges can be addressed and tangible results thanks also go to Gabrielle and Mark Gravolin from achieved. The view on Innovation Management still LEVESYS, who gave up their time to be interviewed can be rather holistic or rather focussed. The con- for this case study. sulting process applied showed some common pat- terns. However, the depth of consulting support var- ied along with how IMP³rove was integrated with 5.5 Conclusions from the other consulting tools. Case Examples: IMP³rove Contributes to Effective and Efficient Innovation Management Consulting Support The case examples illustrate the approaches to high-impact Innovation Management consulting for Figure 43: Innovation Management Consulting Impact SME CHALLENGE TANGIBLE CONSULTING PROCESS INTEGRATION SCOPE OF RESULTS FROM OF OTHER INNOVATION CONSULTING TOOLS MANAGEMENT SUPPORT PERSPECTIVE Better exploiting IP Setting clear tar- IMP³rove assessment IP and change in Inno- gets for innovation facilitated by consultant Innovation culture vation Management projects Initiating cultural change Managing several Measuring innovation IMP³rove assessment, SWOT Innovation Life Cycle innovation projects success Benchmarking results, Management at a time in a small Recommendations organisation Competitive pressure Development of new IMP³rove assessment, Scenario tech- Strategic shift to new triggered by disrup- Business Unit build- Benchmarking results, niques, portfolio business area tive technologies ing on the disruptive management, Roadmap for action, technology brain-stor-ming, Market analysis, forecast fore-casting and business plan Feasibility of large Effective support for IMP³rove assessment, Entering new market innovation project funding of the project Analysis of the bench- for a rather small marking results, organisation Roadmap with activities Rapid growth caus- Increased effective- IMP³rove assessment, Meeting high market ing bottleneck in ness in the manu- Complementary analyses, demand for innova- the manufacturing facturing processes Production process tive products facilities and improved product improvements management Low results from Expected improve- IMP³rove assessment, Innovation results innovation ments in the area of Complementary analyses, radical innovations Further consulting support pending
High-Impact Innovation Management Consulting Services for SMEs 77 SME CHALLENGE TANGIBLE CONSULTING PROCESS INTEGRATION SCOPE OF RESULTS FROM OF OTHER INNOVATION CONSULTING TOOLS MANAGEMENT SUPPORT PERSPECTIVE Missing integration of Optimized innovation IMP³rove assessment, Innovation life-cycle innovation strategy life-cycle processes Complementary analyses, and product strategy and increased Process optimization turn-over Lack of innovative Product and business IMP³rove assessment, Innovation beyond business models model innovation Complementary analyses, product innovation Support in product and business model develop- ment, and in knowledge management Missing integrated Development of IMP³rove assessment, Innovation strategy Innovation strategy a consistent innova- Innovation strategy as integrative power tion strategy development process and for larger corporation knowledge management support Internationalisation Educating the leader- IMP³rove assessment Broadening view from ship in the different product innovation types of innovation to to service, process, gain competitiveness business model innovation New market approach Repositioning of IMP³rove assessment and Business model products and services Root/Cause Analysis, innovation by industrialisation of Action plan and output services, and estab- plan lishing 2 different BUs Significant growth in revenues and profit Identify and develop Clear understand- Face-to face interviews, Measuring the corpo- strategic measures of ing of strengths and assessment, Face-to- rate innovativeness Innovation Manage- weaknesses face-feedback, Meeting in ment to enable the the consortium implementation of new processes and products Disagreement of Management align- IMP³rove assessment, Thinking hats, Apart from recom- management team ment for new busi- Feedback workshop, Brainstorming mending a new busi- regarding further ness solution ness solution, general Recommendations, development of the management issues company Roadmap were addressed Leveraging new Striving for continu- New value proposition design for product ous improvement innovation Low effectiveness of Long-term support in IMP³rove assessment, SWOT, custo-mer Innovation strategy innovation activities Innovation Manage- Management Workshop, needs assess- and controlling ment activities by Action plan ment, Scenario providing a vision, techniques innovation strategy and Innovation Man- agement controlling system
78 High-Impact Innovation Management Consulting Services for SMEs SME CHALLENGE TANGIBLE CONSULTING PROCESS INTEGRATION SCOPE OF RESULTS FROM OF OTHER INNOVATION CONSULTING TOOLS MANAGEMENT SUPPORT PERSPECTIVE Entering new market Recommendations IMP³rove assessment, Growth opportunity segment for the improve- Opportunities Report, with new business ments mainly in the line Roadmap with actions and Innovation Life Cycle timelines Processes, identifying early wins, design of an R&D management system, Support for getting public funding for the innovation project Better exploiting the Initiating measures IMP³rove assessment Structural and cul- organisation’s in- for establishing completed by the board of tural change to move novation potential by structures facilitating directors, from invention to shifting from inven- innovation and devel- Feedback on each dimen- innovation tion to innovation oping an innovation sion of the “House of culture Innovation” and discussion of the results with the client’s innovation team representing the different departments, Complementary interviews with 20 employees, Workshops with the in- novation team to define actions Getting from losses Gaining substantial IMP³rove assessment, Valorisation of IP, back to a profitable profits one year after Interviews with the whole e.g. manufacturing business the IMP³rove assess- management team, licenses, patents ment based on the Report with the key programme of work findings, that included: Developing a programme Vision and strategy, of work Identification of growth market sectors, Commercialization system, Definition of technol- ogy-driven business opportunities, Advice on organisa- tion and Innovation Management Preparing for po- Clear plan to im- IMP³rove assessment, Impact of Innovation tential disruptive prove the bottom Review of the SME’s busi- Management on the technologies line by more sys- ness plans and financials, bottom line, tematic Innovation Open innovation Roadmap with a plan for Management; costing and implementing the recommendations
High-Impact Innovation Management Consulting Services for SMEs 795.5.1 SME CHALLENGES THAT WERE pacity and competitiveness. This is demonstrated ADDRESSED BASED ON THE by quantitative financial results and by qualita- IMP³ROVE APPROACH tive results. Some of the case examples present impressive figures that prove the financial impactMost of the challenges that the SMEs were fac- of IMP³rove-based consulting. In other cases, theing were rather strategic. Pressure from disrup- SMEs were not yet in the phase where recommen-tive technologies, significant losses because of the dations could generate the expected financial re-economic crisis and a need for internationalisation sults. Here, the implementation phase will be criti-require a strategic response with Innovation Man- cal to achieving these results. It is often the merit ofagement playing a key role. However, the case ex- the consultant not only assessing the SME’s currentamples also illustrate the operational challenges, performance and providing the recommendationssuch as successfully managing several innovation for the necessary improvements, but also ensuringprojects at the same time within a small organi- the implementation of the recommendations andsation, better exploiting the innovation potential of agreed-upon actions.the entire organisation or evaluating the businessimpact of an innovation project. Qualitative results are the pre-requisite to achiev- ing financial results. The cases examples describedWith the IMP³rove approach, consultants could de- here can be grouped by the focus that the improve-liver the recommendations for improving an SME’s ment measures had. However, most of the casescompetitive position. Tangible benefits are docu- were not one-dimensional. Therefore, they were al-mented in the increase of profitable growth. located by the main focus of the measures taken.5.5.2 ACHIEVED TANGIBLE RESULTSThe overall aim of Innovation Management con-sulting is to strengthen the SMEs’ innovation ca- Figure 44: Overview of the Case Examples by Dimension of the A.T. Kearney House of Innovation DIMENSION CASE EXAMPLE QUANTITATIVE RESULTS ACHIEVED Innovation Levesys, AUS Moving from the developer of ERP software for Strategy the Australian construction industry with moder- ate growth to a consulting services supplier to the construction industry Book retailer, GER Building a new Business Unit as response to disruptive technologies Automotive suppliers, GER Integrating the different business units, and inte- gration product and innovation strategy INFOTEL, IT Feasibility of an internationalisation strategy Traffic control and surveillance supplier, Spain Development of and alignment with the new innovation strategy Iphonedriod, Spain Establishing a new business line Electronic repair company, UK Prepare for disruptive technologies Innovation Private Health Service Provider, Latvia Alignment for top management commitment and organisation and establishing a learning culture culture Pharmaceutical ingredient manufacturer Leveraging the Innovation potential of the organisation
80 High-Impact Innovation Management Consulting Services for SMEs DIMENSION CASE EXAMPLE QUANTITATIVE RESULTS ACHIEVED Innovation Producer of modern filtration solutions, FIN Effectively managing several innovation projects Life Cycle at a time be defining clear targets Management Digital Royal, GER Evaluating the feasibility of a major innovation project Electronics company, GER Improving results from radical innovation Cutting edge technology company, GER Increased effectiveness in manufacturing of innovations Mechanical engineering, GER Development of innovative business models Innovation ena- Levesys, AUS Exploiting IP bling factors Electronic Repair Company, UK Innovation EIDON, Italy Comprehensive repositioning to regain sus- results tainable growth by more effective Innovation Management Tinsely Bridge Limited, UK From loss-making to strong profitable growth within 1 year by establishing a new business lineMaintaining the focus on impact during the consult- The results of the analysis phase were documenteding project is critical for the acceptance of profes- in a report. In some cases, several reports were pro-sional Innovation Management consulting services. vided. The report was the basis for the feedback toThe more SMEs experience the benefits of the the SME. In most cases, the feedback took placeIMP³rove approach and the support from IMP³rove- in a personal meeting, either with the SME man-trained consultants, the more they are willing to ager or with the management team. In some cases,pay for these services rather than expecting public the results from the IMP³rove assessment wereprogrammes to cover these cost. translated into a traditional SWOT analysis, which helped the SME’s management link the results of5.5.3 THE CONSULTING PROCESS AND the IMP³rove assessment to the categories in which TOOLS APPLIED they were thinking.In most cases, the applied consulting process in- During the development of recommendations, thecluded at least the following three steps: consultants aimed to involve as many SME stake- holders as possible to get the buy-in for the nec- • Execute the IMP³rove assessment essary organisational changes. This facilitates the • Consolidate the results from the IMP³rove implementation of the agreed-upon recommenda- assessment in a report tions and actions. During this phase of the consult- • Present the results from the IMP³rove as- ing project, consultants applied different tools―in- sessment in a feedback session cluding brainstorming, de Bono’s Thinking Hats and scenario―to come up with the most suitable solu-In most of the cases, the consultant was also in- tion for the SME.volved in developing recommendations and, in somecases, in implementing the recommendations. The cases show that SMEs receiving value-added from IMP³rove Innovation Management consultingThe IMP³rove assessment was the starting point. gain competitive advantage. With IMP³rove as theThe IMP³rove benchmarking report provided the European approach to Innovation Management,facts and figures on the SME’s Innovation Manage- the next level of professionalization in Innovationment performance. These facts and figures were of- Management consulting can be reached. Therefore,ten complemented by interviews with members of focus on tangible results from Innovation Manage-the management team and/or staff members. Thus, ment consulting is essential for the professionaliza-a comprehensive picture on the SME’s strengths tion of this rather young consulting discipline.and weaknesses could be provided in comparisonwith the SME’s competitors.
High-Impact Innovation Management Consulting Services for SMEs 816. Future Development towardsProfessionalization of InnovationManagement Consulting Servicesfor SMEsThe Innovation Management consulting services Management and implement them into the consult-for SMEs have been dominated by publicly funded ing approach because Innovation Management isprogrammes. This had a strong influence on the ob- becoming increasingly important and an effectivejectives of the Innovation Management consulting. driver for growth and competiveness. These trendsPublic programmes clearly describe the deliverables include the following:regarding stakeholder involvement, number of ben-eficiaries and tools to be developed or applied. How- • Holistic approach to Innovation Manage-ever, they used to focus less on the business require- ment rather than research and develop-ments of the enterprises that are meant to be the ment plus innovation (R&D+I)beneficiaries and the impact of the Innovation Man- • From product innovation to non-productagement consulting services on these organisations. innovation • Coherent Innovation Management withinEven if the Innovation Management consultant re- the value networksalizes that the objectives of the public programme • Increasing proficiency in Innovation Man-are obsolete by the time they need to be achieved, agement and Innovation Managementhe or she has to follow the programme’s plan. In consultingone case, a consultant clearly acknowledged thatthe innovation audit they had to develop in the These trends will be explored in more detail in thecontext of a publicly funded project is not nearly following chapters.as comprehensive and thorough as the IMP³roveassessment. Given the defined deliverables of the 6.1.1 HOLISTIC APPROACH TOprogramme, the consultants could not or did not INNOVATION MANAGEMENT RATHERwant to switch to the better approach, which has THAN R&D+Ialready been tested. This shows the limitationsand constraints of publicly funded innovation sup- Innovation Management involves more than re-port projects. If the same consultant supported the search and development and the functions re-SME based solely on financing by the SME, he or she sponsible for these tasks. Innovation actually is theprobably would have to change his approach and overriding goal within a company to generate val-apply the better tool. Otherwise, the SME would not ue for their customers. This applies for both profitpay for substandard services. and non-profit organisations. R&D is a necessary step within Innovation Management for achievingIn context of this experience, the following chapters this objective. It is a co-creation of value through-describe how Innovation Management consulting out the entire company―and in advanced cases,services for SMEs can be further professionalized, even beyond the borders of the organisation. Atespecially in publicly funded programmes and pro- each step of the value chain, Innovation Manage-jects, to create the impact and improvements needed ment can contribute to the company’s growth andto increase the competitiveness of European SMEs. competitive position. Even in larger corporations, the perception of Innovation Management in 2011 was still perceived as the add-on to R&D. This is6.1 Anticipating Trends reflected in the misleading acronym R&D+I: re- search for creating knowledge, development for for Better Innovation processing knowledge and innovation for turning Management Consulting knowledge into value. From a research perspec- Services tive, this might look like an evolution. However, from a business perspective, R&D should be anValue-driven Innovation Management consult- integral part of Innovation Management to ensureing services should anticipate trends in Innovation alignment with the overall innovation strategy.
82 High-Impact Innovation Management Consulting Services for SMEs Innovation Management consultancy will need to have the opportunity to facilitate the discussion and drive this integrated approach. This will create the contribute to a deeper understanding of the different strategic alignment as well as the coherence and partners’ needs and demand. interoperability within the organisation and within the value networks. 6.1.4 INCREASING PROFICIENCY IN INNOVATION MANAGEMENT 6.1.2 FROM PRODUCT INNOVATION TO NON-PRODUCT INNOVATION A trend that has been observed since the 2006 start of the IMP³rove project is an increasing awareness In the future, Innovation Management might focus and proficiency in Innovation Management, not only more on non-product innovations for several rea- at the company level but also for other stakehold- sons. Product innovations might require too much ers. The omnipresent discussion on European com- time to cope with the dynamics of an industry. They petitiveness to secure the level of wealth had its usually also are more expensive than service inno- impact, and the recent financial and economic cri- vations, and it often is too difficult to achieve the ses have increased the urgency. The question is no required differentiation to succeed in the market. longer why we talk about Innovation Management but how we can improve in this area. Innovation Management consulting can serve as a driver for non-product related innovations. The Innovation Management consulting also needs to IMP³rove study “Gaining Competitiveness with In- refine the tools and approaches for effective sup- novations beyond Technology and Products: Insights port. Asking the question “With which products, ser- from IMP³rove” published in 2011 clearly demon- vices or business models will you earn your money strates the business potential of non-product related in three years’ time?” should now lead to the ef- innovations in the manufacturing companies. Service fective approaches that will establish a sustainable companies that have been excluded by an R&D-driv- Innovation Management that is clearly designed for en approach also need to systematically innovate. In- the specific needs of an individual SME. This chal- novation Management consulting will support these lenge of innovating also must be mastered by the organisations in achieving growth and sustainability consultants themselves. from service, process and business model innova- tions―in addition to product innovation. 6.2 Professionalization of 6.1.3 COHERENT INNOVATION Innovation Management MANAGEMENT WITHIN THE VALUE NETWORKS Consulting Services Value networks become more and more the driving Professionalization of Innovation Management force for innovation. But identifying who actually is Consulting will be visible in at least three very dif- the “innovation gate” in the value network is not easy. ferent areas. Is it the immediate customer? Is it the consumer? Is it an organisation in between? Will technology from • Dissemination of a common approach to In- a completely different area lead to convergence? Has novation Management consulting as it has the large player in the value-chain decided that more been requested already in some of the case of his innovation activities should be performed by examples suppliers? SMEs lack this overview and often neglect • Increased demand for high-impact Innova- to investigate the change within the value networks. tion Management consulting services Closer cooperation with the various players in the • Innovation Management consulting services value networks will create more transparency where for the public sector the driving forces for innovation are. SMEs can take an active role. They can ask their suppliers to pro- The increasing expectations for high-impact In- vide insights into their Innovation Management ca- novation Management consulting will drive this pabilities. This will help the SME better understand professionalization. how to involve suppliers in innovation activities. At the same time, it offers the SME the opportunity to 6.2.1 DISSEMINATION OF A COMMON discuss with their supplier problems for which they APPROACH TO INNOVATION are seeking supplier solutions. Performing an as- MANAGEMENT CONSULTING sisted IMP³rove assessment with both customer and supplier created an unknown added value for both A major step toward professionalization has been organisations. Innovation Management consultants made by establishing the IMP³rove Innovation Man-
High-Impact Innovation Management Consulting Services for SMEs 83agement assessment as common approach. Con- of Innovation Management consulting services cansultants using the IMP³rove assessment highlight increase their expectations regarding professionalthe benefit of having access to a common European services in this area. They have a better understand-benchmarking approach. It allows immediate com- ing of the benefits and value of these services, gainparison of their client’s Innovation Management transparency on the quality standards and have eas-performance with other companies on a national ier access to high-quality support services.as well as international basis (see case examples inchapter 5). Building their consulting services on the 6.2.2 INCREASED DEMAND FOR HIGH-IMP³rove benchmarking report, they now are looking IMPACT INNOVATION MANAGEMENTfor a common approach for the consulting process. CONSULTING SERVICESWithin the IMP³rove project, this has been developedat a very early stage. It is designed for high impact Because Innovation Management consulting isfor the client receiving the consulting services. The a young discipline, there is a demand for proof ofadoption of this process by Innovation Management proficiency in high-impact Innovation Managementconsultants will be supported by further training. consulting. Each public authority defines its ownThe IMP³rove – European Innovation Management quality criteria. However, public agencies have toAcademy has already developed courses on Inno- adhere to non-exclusive principles. Therefore, theyvation Management consulting. These courses pro- only define rather formal criteria, such as numbervide tools and approaches on how to move from of employees working in the consultancy or numberthe IMP³rove assessment to recommendations for of years the consultant has provided consulting ser-the SME that have a measurable impact and create vices. In most cases, there is no request for proofvalue for the company. IMP³rove certificates provide that these services had a high impact on the clients’the formal proof of the consultant’s level of profi- performance.ciency in Innovation Management consulting. Since IMP³rove established its certification scheme,Professionalization also includes learning from demand for consultants with proven proficiency asfailure in Innovation Management consulting. If IMP³rove Expert Level I and higher have been ex-the client has not implemented the recommended pressed recently11. This trend is expected to con-measures, this might not be only the client’s fault. tinue. Both the public sector and private companiesApproaches for motivating and enabling the client are becoming aware of the need for proficient In-to better implement the measures might be as im- novation Management consultants who are defin-portant as developing adequate advice. ing their value by the impact of their services. This demand will then increase the interest of consult-Learning from mistakes and discussing them within ants in providing the proof of their proficiency. Con-the peer group is not widespread within the Inno- sultants who focus on creating value for their SMEvation Management consulting community, yet it is clients have fewer difficulties recruiting clients ona clear indicator of the industry’s professionaliza- the basis of consulting fees paid by the SME rathertion. Furthermore, it is a source for service innova- than by public programmes.tion in the area of Innovation Management consult-ing services. Public agencies should be aware that they might in- terfere in market dynamics if they create demand forThe IMP³rove – European Innovation Management Innovation Management consulting service based onAcademy may build the platform for the discussion formal criteria, without requesting high impact fromof both common and very specific challenges in Inno- these services. This might put a disadvantage on pri-vation Management consulting. Thus, continuous im- vate consulting companies that are not supported byprovement of the Innovation Management consulting public funds. The initial intention to develop the In-services will be stimulated, and opportunities for in- novation Management consulting market with publicnovations in that sector and their delivery will be pro- funding might result in the opposite―preventing themoted. At the same time, the users and beneficiaries further development of value-oriented consulting The IMP³rove Certificates include four levels: IMP²rove Guide, IMP³rove Expert level I, IMP³rove Expert level II and IMP³rove Auditor.11 The IMP³rove Guide can support SMEs in completing the IMP³rove Assessments. As IMP³rove Guide the consultant is not entitled to provide consulting services in innovation management unless he has demonstrated his expertise in that area. In the IMP³rove quali- fication scheme as of the IMP³rove Expert level I limited consulting services can be offered under the IMP³rove brand. As IMP³rove Expert I the successfully trained consultant is entitled to support the SME in completing the IMP³rove Assessments and conducting the related consulting workshops under the IMP³rove brand. The certificate IMP³rove Expert level II will entitle the consultant to render all IMP³rove services offered as IMP³rove Expert except the auditing of an SME or an IMP³rove consultant. As IMP³rove Auditor the consultant can audit SMEs in Innovation Management. If agreed with the IMP³rove European Coordination Team, he can also train potential IMP³rove Guides and IMP³rove Experts I and II to contribute to the quality assurance of the services rendered under the brand IMP³rove.
84 High-Impact Innovation Management Consulting Services for SMEs services. This might create a barrier to the develop- business model for the liberal arts industry. Forcing ment of knowledge-intensive services in the area of young and talented students as human resources Innovation Management support services. to produce books and articles that nobody will read (“publish or perish”) must shift to a business model 6.2.3 INNOVATION MANAGEMENT where the products offered are actually consumed. CONSULTING SERVICES FOR THE PUBLIC SECTOR This example illustrates the need for Innovation Man- agement in public institutions that are focusing on Innovation Management is not just a discipline for creating value from the institutions’ point of view. organisations that operate on a profit basis. Non- Although examples like this might be challenged at profit organisations as well as public institutions the beginning, they should be taken as the starting need to establish and develop their Innovation Man- point for the own institution’s innovation strategy de- agement. This will help them focus on continuous velopment process. This should aim at creating value value-creation. Innovation Management consult- for the beneficiaries. Most public institutions have an ants can help these organisations define the ex- internal view of what that value should be; very few pected innovation results and how to achieve them. have asked their customers about their own view. They may increase the effectiveness of the institu- tion as well as its efficiency. The recent analysis of Innovation Management consultants can serve supply and demand in the liberal arts sector by Mark here as catalysts and facilitators to help start the Bauerlein12 at Emory University in Atlanta, Georgia, change journey. The signs for more than incremen- in the United States, initiated by the Center for Col- tal change have been understood by many execu- lege Affordability and Productivity, is one attempt tives in the public sector. in this direction. This study illustrates the research productivity of the English departments of four U.S. colleges. “Universities, however, must think in 6.3 Outlook larger, policy- and cost-oriented terms, judging not the research record of a particular professor, but Given the young age of the Innovation Management rather the research record of the entire department, consulting discipline, there is growth and develop- weighing the impact of all its products against the ment potential. Innovation Management consulting financing of them. Hence, in reviewing its tenure and can contribute to creating jobs in the knowledge-in- promotion policies and the financing of them, it can- tensive services as well as in the organisations that not highlight only the successful books and essays this sector serves. Further professionalization of of the past. The unsuccessful ones must be con- this service sector will also allow for exporting these sidered, too.”13 In his study, Mark Bauerlein “calcu- services outside Europe, thereby contributing to the lates the investments made in research activities of internationalization of the service sector. With ex- regular faculty members. (…) According to the Hu- porting the IMP³rove approach a first step has been manities Indicator Project, in 2008 academic spend- made. This confirms the leading role of Europe in ing on humanities research and development was Innovation Management consulting for SMEs. only 0.49% of spending on science and engineering R&D.”14 Based on that, “the production of research Although technologies will play a major role in In- items by regular faculty members, those professors novation Management consulting, it will remain paid to produce research”15 was evaluated by “the a people business. Therefore, each consultant active number of books and articles generated in recent in the field of Innovation Management consulting is years.”16 The overall result of this study is that there master of his or her own success. With sound knowl- are no customers for these publications independ- edge in Innovation Management and solid expertise ent of their scientific quality. The average number of in Innovation Management consulting, he or she can readers of these publications seems to be slightly develop his or her own business―provided their ser- above one only. This leads to the question for a new vice creates high impact and value for their clients. 12 http://centerforcollegeaffordability.org/uploads/Literary_Research_Bauerlein.pdf 13 Mark Bauerlein, Literary Research, Costs and Impact, Center for College Affordability and Productivity, A Policy Paper from the Center for College Affordability and Productivity, November 2011, p. 3 14 Mark Bauerlein, Literary Research, Costs and Impact, Center for College Affordability and Productivity, A Policy Paper from the Center for College Affordability and Productivity, November 2011, p. 4 15 Mark Bauerlein, Literary Research, Costs and Impact, Center for College Affordability and Productivity, A Policy Paper from the Center for College Affordability and Productivity, November 2011, p. 4 16 Mark Bauerlein, Literary Research, Costs and Impact, Center for College Affordability and Productivity, A Policy Paper from the Center for College Affordability and Productivity, November 2011, p. 4
High-Impact Innovation Management Consulting Services for SMEs 857. Appendix7.1 List of Contributors Denis Horn University of StuttgartThe following list includes the IMP³rove consult- www.iat.uni-stuttgart.deants who have contributed to this study with a case Germany, Stuttgartexample from their practical consulting experience Innovation Management Consulting focus:with IMP³rove. They are listed by country in alpha- Innovation strategy, innovation organisation andbetical order. We would like to thank all contribu- culture, innovation life-cycle management (innova-tors for sharing their practical experience and for tion processes), knowledge management, projecttheir time and investment in providing the case management, business planning, strategic planningexamples. Tobias Müller-ProthmannFINLAND Pumacy Technologies AG www.pumacy.deJorma Kajanus Germany, BerlinKajanus Consulting Innovation Management Consulting focus:www.kajanusconsulting.fi Innovation organisation and culture, innovationFinland, Iisalmi strategy, innovation life-cycle management (inno-Innovation Management Consulting focus: vation processes), organisational and cultural is-Innovation strategy, innovation organisation and sues and project managementculture, innovation enablers (including project man-agement, financing and human resources), innova- ITALYtion financing and risk management, knowledgemanagement, project management, business plan- Romina Kocinaning, strategic planning, quality, International Or- Friuli Innovazioneganization for Standardisation (ISO) and European www.friulinnovazione.itFoundation for Quality Management (EFQM) Italy, Udine Innovation Management Consulting focus:GERMANY Innovation strategy, innovation organisation and culture, innovation life-cycle management (innova-Dr. Frank Erbacher tion processes), innovation enablers (including pro-Erbacher & Partner Unternehmensberatung ject management, financing and human resources),www.erbacher-partner.com project management and business planningGermany, Baden-BadenInnovation Management Consulting focus: Daniel KrauseInnovation strategy, innovation organisation and Fraunhofer Italyculture, innovation life-cycle management (innova- www.fraunhofer.ittion processes), innovation enablers (including pro- Italy, Bolzano; Germany, Stuttgartject management, financing and human resources), Innovation Management Consulting focus:knowledge management, project management, Innovation strategy, knowledge management, pro-strategic planning and production process ject management, business planning and strategic planningBernd HimmerichHimmerich Consulting Marco Santorowww. himmerichconsulting.de R.Q. s.r.l.-SantoroGermany, Dortmund www.rqsrl.itInnovation Management Consulting focus: Italy, MilanoInnovation organisation and culture, innovation Innovation Management Consulting focus:strategy, innovation enablers (including project Innovation strategy, innovation enablers (includ-management, financing and human resources), in- ing project management, financing and humannovation life-cycle management (innovation pro- resources), innovation financing and risk manage-cesses), organisational and cultural issues, strategic ment, project management, innovation life-cycleplanning controlling, business planning, innovation management (innovation processes), innovationfinancing and risk management organisation and culture, business planning and strategic planning
86 High-Impact Innovation Management Consulting Services for SMEs LATVIA SWITZERLAND Gundega Lapina John Gaffuri Latvian Technological Center Ticinotransfer, rete per il trasferimento di tecnolo- www.innovation.lv/ltc gia e del sapere della Svizzera italiana Latvia, Riga www.ticinotransfer.ch Innovation Management Consulting focus: Switzerland, Manno Innovation strategy, innovation organisation and Innovation Management Consulting focus: culture, innovation life-cycle management (inno- Innovation strategy, innovation enablers (includ- vation processes), innovation enablers (including ing project management, financing and human project management, financing, human resources), resources), innovation life-cycle management (in- knowledge management, project management, novation processes), innovation organisation and business planning and strategic planning Culture, controlling, business planning, strategic planning, organisational and cultural issues, intel- NETHERLANDS lectual property rights, project management and knowledge management Gosse Hiemstra Van der Meer & van Tilburg, innovation consultants UNITED KINGDOM www.innovation.nl Netherlands, Zeist Steve Dore Innovation Management Consulting focus: International Innovation Services Innovation strategy, innovation organisation and www.technology-transfer.co.uk culture, innovation life-cycle management (innova- United Kingdom, Sheffield tion processes), innovation enablers (including pro- Innovation Management Consulting focus: ject management, financing and human resources), Innovation strategy, innovation organisation and knowledge management, project management, culture, innovation life-cycle management (innova- business planning, strategic planning, creativity tion processes), innovation enablers (including pro- and technology transfer ject management and financing, human resources), innovation financing and risk management, intel- SPAIN lectual property rights, knowledge management, project management, business planning, strategic David Barbero Garcia planning and investment Gest-InnovaIde www.gest-innovaide.com Peter Ives Spain, Leganés Business Dynamix Innovation Management Consulting focus: www.businessdynamix.co.uk Innovation strategy, innovation organisation and United Kingdom, Enfield culture, innovation life-cycle management (innova- Innovation Management Consulting focus: tion processes), innovation financing and risk man- Innovation strategy, innovation organisation and agement, intellectual property rights, knowledge culture, innovation enablers (including project man- management, project management and strategic agement, financing and human resources), innova- planning tion financing and risk management, knowledge management, project management, business plan- Juan Campos ning, strategic planning, coaching and mentoring Upsellinn Performance, S.L. including establishing programmes www.upsellinn.com Spain, Madrid AUSTRALIA Innovation Management Consulting focus: Innovation life-cycle management (innovation pro- Sam Bucolo cesses), knowledge management, business plan- Cara Wrigley ning, innovations commercialization and marketing Queensland University of Technology innovations http://www.qut.edu.au/ Australia and Oceania, Queensland Innovation Management Consulting focus: Innovation strategy, innovation organisation and culture, innovation life-cycle management (in- novation processes), design thinking and design management
High-Impact Innovation Management Consulting Services for SMEs 877.2 List of Publications that avoid that the well-intended programme’s objec- tives are not fully met, the IMP³rove – European Resulted from IMP³rove Innovation Management Academy provides support • Gaining Competitiveness with Innovations in the design of programmes to raise competitive- beyond Technology and Products: Insights ness and innovation performance of SMEs. This from IMP³rove (2011) support can be financed e.g. with funds from struc- • Innovation Management in High-Growth tural funds/technical assistance. SMEs from the Knowledge-intensive Ser- vices (KIS): Setting the Pace for Growth in The Concept Europe (2010) • IMP³rove: A European Project with Im- The support in the design of programmes to raise pact―50 Success Stories on Innovation competitiveness and innovation performance of Management, Europe INNOVA Paper Nr. 14, SMEs includes five major steps. The support from published by the European Commission, DG IMP³rove can be offered for all or for selected steps. Enterprise and Industry 2010 • Tangible Results from IMP³rove: Insights on • Facilitating the process of defining the ob- Innovation Management in Europe, Europe jectives of the planned programme: Ex- INNOVA Paper Nr. 10, published by the Eu- perience shows that the objectives of the ropean Commission, DG Enterprise and In- planned programme have to be discussed dustry 2008 among the key stakeholders and agreed. • European Innovation Management Land- Often they seem to be obvious, however, scape. Assessment of current practices in when they have to be translated into spe- Innovation Management Consulting Ap- cific actions and clear key performance indi- proaches and Self-assessment Tools in Eu- cators different opinions emerge rope to Define the Requirements for Future • Assessment of demand for support: Many Best Practices, Europe INNOVA Paper Nr. 2, support programmes have been offered to published by the European Commission, DG help SMEs adopting new technologies or Enterprise and Industry 2006 collaborating with research institutes. This puts focus on manufacturing companies. However, IMP³rove studies show that inno-7.3 List of IMP³rove Service vation capacity of service companies con- tributes to the competitiveness of a region Offerings or a specific industry. Not all of the SMEsThe following list of service offerings are blue prints that have been involved in support pro-for IMP³rove-based support of innovation and com- grammes have the capabilities to make bestpetitiveness programmes. They provide an overview use of the new technologies or the resultsof the services that are offered by the IMP³rove – provided by research institutes. Therefore,European Innovation Management Academy. They the SMEs’ Innovation Management capabili-can be customized to the specific needs and de- ties need to be evaluated as a pre-requisitemand of the support programmes aiming at raising for the success of the planned programmethe competitiveness of SMEs and the performance • Evaluation of the qualification of the sup-of the Innovation Management support providers in port providers available: Based on the expe-the innovation eco-system. rience in training more than 500 innovation support providers in the IMP³rove Approach7.3.1 SUPPORT IN THE DESIGN gave a good overview on the qualification OF PROGRAMMES TO RAISE of these support providers to add value to COMPETITIVENESS AND INNOVATION the SMEs’ competitiveness and Innovation PERFORMANCE OF SMES Management capabilities. IMP³rove certifi- cates might be a first basis for selecting theVarious programmes to raise competitiveness most suitable organisations. By specifyingand innovation performance of SMEs have been the required profile in the call for tender orlaunched in the past. The impact that they generat- proposal increases the quality of the offers,ed has not always fully met the expectations of the and minimizes the effort of those who haveinitiating organization. A major challenge was the to evaluate these offersmobilization of SMEs to involve them actively in the • Design of the programme: During the de-programme. In addition, the qualification of the ser- sign phase the IMP³rove support is focusingvice providers was not in line with the programme’s on the consistency with the defined objec-objectives nor were the performance measures. To tives and key performance indicators. The
88 High-Impact Innovation Management Consulting Services for SMEs risks will be assessed that might impede Steps for Preparing for the Programme the success of the programme. These risks Development may come from lack of time for mobilizing the beneficiaries, lack of clear communica- When preparing for a programme for innovation and tion to the key stakeholders or even lack of competitiveness, the authority should have a clear attractiveness of the programme for SMEs understanding who the key stakeholders are, that • Support in the call for tender or proposal decide on the overall objective of the programme process: For the public tender or proposal and what their political intention is. The trends and process support is provided in developing insights on effective innovation and competitive- the documents describing the technical ness programmes should be already taken into ac- specifications of the programme as well as count during the preparation for the development in communicating the call to reach the best of the programme. qualified support providers to submit their offers Benefits of the IMP³rove Support in the De- sign of Programmes to Raise Competitiveness Scoping the Programme for Competitiveness and Innovation Performance of SMEs and Innovation Performance of SMEs Support in developing programmes to raise compet- When scoping the programme for competitiveness itiveness and innovation performance of SMEs by and innovation performance following key dimen- the IMP³rove – European Innovation Management sions have to be evaluated: Academy is geared to increase effectiveness and efficiency both in the preparation of the programme • Population of SMEs in scope: How many as well as in its execution. Policy makers thus will SMEs are in the scope that will benefit from build their programmes on state of the art insights the programme; how will they be mobilized and trends in In-novation Management at SMEs, in in an effective and efficient manner? the Innovation Management support industry and • Supporting infrastructure: Is there already related key players important for an effective in- an infrastructure in place that can be lev- novation eco-system. With the largest database eraged to create momentum for the pro- on Innovation Management in SMEs and a wide gramme? If not, are there funds available to international network of more than 500 trained In- initiate the development of such an infra- novation Management support providers and the structure/ innovation eco-system? training curriculum the IMP³rove – Euro-pean Inno- • Phases of the programme for competitive- vation Management Academy disposes of a com- ness and innovation performance of SMEs: prehensive view on the current markets relevant for will this programme be designed in a pilot innovation and competitiveness programmes. and a roll-out phase or will it be designed by industry sector or by regions to be in- 7.3.2 NATIONAL IMP³ROVE PROGRAMME volved? How is the learning experience risk TO RAISE COMPETITIVENESS AND mitigation integrated in the design of the INNOVATION PERFORMANCE OF programme? SMES • Timing and budgeting of the programme: To what extend are the project phases designed With the European Structural Funds, national or re- according to the current level of SMEs’ com- gional funds, EU Member States dispose of finan- petitiveness and proficiency in Innovation cial resources to improve the competitiveness and Management, the available infrastructure, innovation of SMEs to foster growth and creation and the available resources and budgets? of employment. As small and medium sized enter- Is there a co-financing expected that might prises (SMEs) are the backbone of the competitive- cause delays if not provided on time? ness, a national or regional programme to raise the • Sustainability of the achieved results: How innovation performance of SMEs is often required. will the results be further leveraged and To be successful for the SMEs as final beneficiary a sustainable impact of the programme it also has to include intermediaries, consultants, achieved? financial actors supporting SMEs and policy makers in their innovation efforts. Such a comprehensive These are key issues that need to be taken into ac- support programme could be designed in following count when scoping a programme for innovation modules: and competitiveness of SMEs.
High-Impact Innovation Management Consulting Services for SMEs 89A. Diagnostic phase: Assessment of the Innovation Tangible Results from the Diagnostic Phase:Management capabilities in SMEs and of the Inno-vation Management consulting performance. • Overview on the SMEs’ Innovation Manage- ment performance compared to other re-B. Assistance phase: Support in the design and in gions, countries or sectors. Identification ofthe implementation of programmes to improve ‘Innovation Management champions’ in theSMEs’ Innovation Management capabilities and the regionregions’ competitiveness. • Innovation Management assessment report for each individual SMEC. Evaluation phase: Evaluating the impact of the • Trained Innovation Management supportimplemented programme to raise the innovation providersperformance of SMEs. • Study on the regions’ proficiency in Innovation Management as driver for competitivenessThe modules can be implemented independently orin combination addressing different stakeholders as Assistance Phase: Support in the Design andrequired. All or many of the modules could be part Implementation of Programmes to IMP³roveof a national development programme depending the Regions’ Competitiveness and Innovationon the needs and the objectives of the intervention. CapabilitiesDiagnostic phase: Assessment of the Innova- Based on the existing assessments and the re-tion Management Capabilities in the Region sults of the diagnostic phase, an action plan will be developed to mobilize all key stakeholders andThe assessment of the Innovation Management ca- enhance the proficiency in innovation and Innova-pabilities includes the SMEs, the innovation support tion Management as a key driver for competitive-providers such as consultants, cluster managers, ness. Such an action plan includes qualificationchambers of commerce, as well as policy makers, programmes, innovation support schemes and theacademia and financial actors. communication and promotion of the actions.SMEs’ Innovation Management capabilities will Qualification of SMEs and consultancies will bebe assessed based on the IMP³rove Assessment. provided based on the curriculum of the IMP³roveIt gives the SMEs a detailed report on their Inno- - European Innovation Management Academy.vation Management capabilities in comparison SME workshops will be part of the action plan towith the growth champions and the average. This increase their awareness and capabilities in Inno-benchmarking allows the comparison on a national vation Management and to foster the interactionas well as on an international basis, within sectors e.g. with financial investors, clusters and academicand across industry sectors - based on the larg- institutions. In addition, the action plan will includeest and most up-to-date database on Innovation the further development of voucher schemes andManagement with more than 3000 SMEs. For maxi- innovation policies as well as recommendations formum impact, the IMP³rove online assessment will academia to better address Innovation Manage-be made available in local language. Currently fol- ment topics in their programmes. Integral part oflowing languages are already established: Czech, the action plan is the promotion and communica-English, French, German, Hungarian, Italian, Polish tion of activities to disseminate the programmeand Spanish. within the various stakeholder groups.Support providers such as consultants, cluster During the implementation, the SMEs’ Innovationmanagers or responsible actors at chambers of Management capabilities will be assessed and fur-commerce can assist the SMEs in completing their ther developed to increase their competitiveness.IMP³rove Assessment. They will be trained in the This will be supported by training programmes forIMP³rove Approach and in Innovation Management SME managers, and the support service providers.specific topics as needed. The implementation will be monitored, and where needed further actions will be developed to achieveFurthermore, policy-making, financial investments the defined results and impact.and academic programmes in the region will beanalysed to what degree they are geared to innova- Tangible Results from the Assistance Phase:tion and effective Innovation Management support. • Agreed action plan with clear roles, re- sponsibilities, timelines, deliverables and milestones
90 High-Impact Innovation Management Consulting Services for SMEs • Mobilisation of the responsible parties to The Benefits of the National Programme to implement the action plan Raise Competitiveness and Innovation Perform • Increased proficiency in Innovation Man- ance of SMEs agement in the regions as basis for strong competitiveness With the IMP³rove-based national programme to raise the competitiveness and innovation per- Evaluation Phase: Evaluating the Impact of formance of SMEs, the impact of the structural or the Implemented Programme to Raise the In- national funds on the performance and competi- novation Performance and Competitiveness tiveness of SMEs will be high. Such a programme of SMEs offers The evaluation of Innovation Management capa- • Well-defined targets and objectives in line bilities in the region will be executed in two dimen- with the objectives of the government sions: the firm level and the infrastructural level. It • Close monitoring of the programme’s suc- will be based on the defined key performance indi- cess and immediate counter measures as cators. These should include the profitable growth required of the SMEs that are part of the programme in • Immediate knowledge transfer to lo- comparison to their peers in other regions or coun- cal stakeholders in Innovation Manage- tries. The evaluation of the regional “infrastructure” ment and Innovation Management support for Innovation Management will assess the inte- based on the internationally acknowledge gration of all stakeholders focusing on Innovation IMP³rove Approach Management: SMEs, support providers, investors, • Increased Innovation Management perform policy makers and academia. An Innovation Man- ance of SMEs and innovation eco-systems agement Award can be part of the evaluation to in the different regions present the Excellence in Innovation Management • Increased competitiveness on a sustain- either on firm level and/or within a network of dif- able basis beyond the phase of the publicly ferent stakeholders. funded programme Tangible Results from the Evaluation Phase: 7.3.3 IMP³ROVE ASSESSMENT • Report on the Innovation Management ca- SMEs need to improve their Innovation Manage- pabilities in the regions on firm level and on ment performance to maintain and improve their infrastructural level competitiveness. Therefore they first need to • Insights in the strengths and weaknesses understand what their current business perfor- of the regions’ innovation capabilities and mance in relation to their competitors is and what competitiveness they need to improve regarding their Innovation • Insights on the further development needs Management capabilities. With the IMP³rove As- of the regions to increase their competitive- sessment a proven and effective approach is ness and proposed measures available. The Steps to Initiate a Customized Regional The IMP³rove Assessment – the Concept Programme to Raise the Innovation Perform ance of SMEs The IMP³rove Assessment is provided online as self-assessment or with assistance of a trained Ideally the national ministry responsible for the IMP³rove Consultant (www.improve-innovation.eu). structural funds for competitiveness and in-no- A well-structured questionnaire helps the SME to vation takes the lead. It should involve regional learn what the key dimensions of Innovation Man- stakeholders, in particular clusters, and the man- agement are that it needs to address. The IMP³rove agement agencies for the structural funds in the Benchmarking Report then compares the SME with design of the proposal already. The IMP³rove – Eu- the Growth Champion and the average in the vari- ropean Innovation Management Academy that has ous dimensions of Innovation Management. This emerged from the IMP³rove project (an initiative benchmarking reveals the areas where improve- of the European Commission, DG Enterprise and ment is most urgent. A trained IMP³ove Consultant Industry) should be involved in the formulation of can help the SME to derive conclusions from the programmes for some or all of the above described detailed benchmarks and prioritize the measures phases. It will then also mobilize the IMP³rove net- for improvement so that the SME will sustainably work partners in the relevant regions to support the improve its Innovation Management performance programme. and its competitiveness.
High-Impact Innovation Management Consulting Services for SMEs 91SMEs that would like to have more detailed bench- Policy makers should also specify against whichmarks can also complete the IMP³rove “Root/Cause” benchmarking sample the SMEs should compareanalysis and the IMP³rove Sustainability-Driven In- themselves. It is recommended to request the com-novation Management Assessment. parison within the own industry and the own size class and with all countries. This will provide an in-The IMP³rove Benchmarking report allows for bet- ternational view on the SMEs’ performance.ter comparability of the SMEs’ Innovation Manage-ment performance and competitiveness as it builds The Benefits of the IMP³rove Assessmenton an external benchmarking and not just on anindividual internal audit. With the IMP³rove Assessment the SMEs gain in- sights in their competitiveness, in the areas thatDefining the Need for IMP³rove Assessments they need to improve. Since the IMP³rove Assess- ment is designed for regular evaluation of the ownThere is a strong need for assessing the Innovation Innovation Management performance, Innova-Management performance of SMEs prior to any tion Management becomes an integral part of thesupport service. Most of the SMEs have no or very SMEs’ management activities. SMEs also can invitelimited knowledge about their Innovation Manage- their suppliers to per-form the IMP³rove Assess-ment performance. Transparency on the strengths ments. This will have an impact on the competi-and weaknesses in the various dimensions of In- tiveness of the value chain the SME is integratednovation Management is the key to design the in. SMEs that performed the IMP³rove Assessmentmost effective support measures. This helps to can use the IMP³rove Benchmarking report to provedemonstrate the current best practice and how to their competitiveness to customers, financial inves-reach it. tors or to public agencies offering programmes for competitiveness and innovation. There have beenScoping the Demand for the IMP³rove Assess- already publicly funded programmes where thements at SMEs IMP³rove Benchmarking report was an important part of the application for these public funds (seeThere are still too many old and small companies also section 4).in Europe that need to grow in a profitable man-ner to remain competitive. Therefore, policy mak- With the IMP³rove Benchmarking Report, public au-ers designing support programmes for innovation thorities have additional insights in the innovationand competitiveness should not only take a look and competitiveness performance of SMEs that areat start-up companies, but also at established applying for funds. Depending on the objectives ofsmall companies that have the potential and the their programme they can select the right SMEs onambition to grow. Experience shows that at least a broader data basis.10% of the SME population can be addressed.The effort to mobilize these SMEs is significant. 7.3.4 IMP³ROVE AWARDAgain experience shows that at least 2 man daysshould be calculated for a successful recruiting of In Europe, many innovation agencies, chambers ofan SME. commerce, clusters and other intermediaries sup- porting SMEs are seeking effective new serviceSteps to Introduce the IMP³rove Assessment offerings to improve the competitiveness and in- novation capabilities of their client SMEs. As a newSince the IMP³rove Assessment is available online, service, the IMP³rove Award has been developedpolicy makers only have to inform the SMEs about that can be easily adopted in a region, or a country.the need to provide the IMP³rove Benchmarking The concept of the IMP³rove Award, its benefits andreport. They have to specify whether they expect how to initiate an IMP³rove Award on a local or na-the IMP³rove Benchmarking report based on a self- tional basis are described in the following.assessment or based on an assisted assessment.It is highly recommended to request the assisted The IMP³rove Award – the ConceptIMP³rove Assessment. This provides higher dataquality as well as better education of support As a first step for the IMP³rove Award the criteriaproviders in Innovation Management. In most of in which the participating companies are evaluatedthe European countries there are already trained should be defined. Further the categories in whichIMP³rove consultants. Training programmes can the award will be granted need to be defined. Theybe scheduled where additional support providers can reflect the dimensions of Innovation Manage-need to be trained to help SMEs in completing the ment: innovation strategy, innovation culture andIMP³rove Assessment. organization, innovation life-cycle process, innova-
92 High-Impact Innovation Management Consulting Services for SMEs tion enabling factors. Categories can also be rep- sentative of a national or regional media partner resented by the highest growth rate resulting from and a representative of the IMP³rove – European innovation: growth in number of employees, growth Innovation Management Academy to provide the in revenue or in profit. international dimension. The IMP³rove Award combines online benchmarking The jury will select the winner or winners. They will of the SMEs’ Innovation Management capabilities receive their award during the IMP³rove Award cer- with on-site visits and an Award Ceremony for the emony. This award ceremony should be organized winner(s) of the IMP³rove Award. under the patronage of the authority responsible for the development of SMEs. The IMP³rove Award Online benchmarking: The SMEs will access the should consist of a trophee, a certificate, and the IMP³rove Assessment via the IMP³rove online plat- prize. form www.improve-innovation.eu. Once the SME has completed the IMP³rove Assessment, they can The Award ceremony itself should include the open- request the IM³rove Benchmarking report. This ing speech of the official representing the patron- report already provides detailed feedback on the age, a speech of the CEO of the local organizing SMEs Innovation Management performance in rela- agency on the lessons learned from the IMP³rove tion to the average and the top 10% of the compa- contest as well as short speeches of the winner(s) nies in the benchmarking sample. on what they did well that they were elected as win- ners and what impact that had on their competi- The completion of the online IMP³rove Assessment tiveness and business performance. can be assisted by trained IMP³rove consultants (recommended). They are trained in the IMP³rove The Steps to Initiate the IMP³rove Award Approach and have success-fully completed the IMP³rove process with at least one SME. The First of all the objective of such an IMP³rove Award IMP³rove consultant can support the SME either in should be clarified. Then the key partners and their a face-to-face session or via telephone when ques- role need to be identified. The promotion of such an tions come up. The assisted mode ensures higher award requires strong marketing and PR support. data quality and consistency of the benchmarking. The roadmap that needs to be developed for the IMP³rove Award should allow for sufficient time to Once the period for the IMP³rove Award compe- recruit the SMEs for the IMP³rove Award. The Award tition has expired, the IMP³rove - European In- Ceremony should give the winning SMEs the rec- novation Management Academy will analyse the ognition within their markets. Often these are very IMP³rove database and provide a ranking of the local or regional and less international. It is essen- contest participants. tial to plan for an annual IMP³rove Award so that it becomes an established event in the calendar of On-site visits: The SMEs that achieved the highest SMEs, innovation support providers, financial inves- scores will be selected for the on-site visits. Dur- tors and the public sector. ing those visits the Innovation Management activi- ties of the SME will be verified. The team that will Similar to the IMP³rove Award other specific offer- conduct these on-site visits should consist of mem- ings can be integrated in innovation and competi- bers of the local agency, of an IMP³rove Expert and tiveness programmes. a representative of the IMP³rove - European Inno- vation Management Academy. (The latter to ensure The Benefits of the IMP³rove Award consistent quality of the IMP³rove Award). The IMP³rove Award as designed above will IMP³rove Award Ceremony: For the nomination for the IMP³rove Award a local jury should be estab- • Increase the awareness of Innovation Man- lished that represents prestigious organizations agement within SMEs and institutions relevant in the area of innovation • Provide the organising agency with an ad- and for SMEs. For example, the jury could be com- ditional attractive service offering posed of a representative of the ministry respon- • Provide insights on the barriers and drivers sible for the development of SMEs, or the ministry of Innovation Management in the domes- for research and development, the national finan- tic SME population for better local/national cial institution funding SMEs, a representative from policies on innovation and competitiveness academia who is perceived as the thought-leader • Increase the visibility of the parties involved in Innovation Management, a representative of as active players in support of Innovation a financial actor active in financing SMEs, a repre- Management activities
High-Impact Innovation Management Consulting Services for SMEs 93 • Provide the option of several winners: na- IMP³rove assessments including the feed- tional winner, international champion, etc. back workshops that results in a road- • Ensure effective allocation of structural map for improving the SMEs Innovation funds or other public funding programmes Management • Build on a well-tested approach that is es- • Successful completion of the IMP³rove tablished in all major European countries exam for the IMP³rove Expert level I. This is and beyond a 4 hour written exam plus an oral presen- tation on Innovation Management designed7.3.5 IMP³ROVE EDUCATION PROGRAMME for SMEs FOR PROFICIENT INNOVATION MANAGEMENT SUPPORT Scoping the Need for Training in Innovation ManagementIn many EU Member States and regions the pro-ficiency in Innovation Management and Innova- If the aim is international competitiveness basedtion Management support can be and has to be on high Innovation Management performance, thenfurther improved to achieve more impact of the there should be sufficient trained IMP³rove consult-support programmes than in the past. Therefore, ants available to support the local SMEs. Experiencethe IMP³rove – European Innovation Management shows that an experienced consultant can on aver-Academy has developed a training and certification age support ap-proximately 10 - 15 SMEs per an-programme that can be integrated into national or num. This includes an Innovation Management As-regional programmes. sessment as well as 10 days of consulting support. Therefore programmes that aim at effective supportAssessing the Need for Higher Proficiency in of SMEs should have in place a sufficiently large net-Innovation Management work of highly qualified Innovation Management sup- port providers. This network itself will contribute toPolicy makers who would like to ensure that SMEs the development of an active innovation eco-system.are supported by highly proficient InnovationManagement support providers can request the Steps to Launch an IMP³rove TrainingIMP³rove certificate on the level of IMP³rove Guide, ProgrammeIMP³rove Expert level I (basic level), IMP³rove Ex-pert level II (intermediary level), IMP³rove Auditor Prior to the launch of the IMP³rove-based training(professional level). These certificates are issued programme, the objectives, budget and time framebased on the proven practical experience and the have to be defined. Based on this information theknowledge in Innovation Management and Innova- individual education programme can be defined. Ittion Management consulting. will combine theory and practical application of the approach.If the innovation and competitiveness programmeincludes consulting services then IMP³rove Expert The recruiting of the participants can be done bylevel I should be the minimum. This ensures that the authority or via public announcement.the consultant has demonstrated his knowledge inInnovation Management as well as in Innovation To ensure sustainability of the measures, the train-Management consulting. ing participants should be obliged to leverage the newly acquired knowledge and further develop itThe minimum training programme for IMP³rove Ex- for the benefit of the local SMEs.pert level I is the Benefits from Trained Innovation Manage- • “Introduction to the IMP³rove Approach” ment Consultants (2 day training course) to gain a solid un- derstanding of the IMP³rove Approach and By developing a network of qualified Innovation the Innovation Management Assessment Management support providers the impact of the • “Introduction to Innovation Management public support programme is significantly increased. Consulting I” (2 day training course) as Furthermore, involving experienced trained consult- many support service providers, even those ants in public programmes also develops the local who have been working with SMEs for many service sector where jobs are maintained and ad- years have major difficulties to focus on the ditional ones are created. Training former manag- value added of their support services ers of SMEs as consult-ants has been an effective • Practical experience in supporting the approach. These consultants know what the key is- SMEs demonstrated by at least 4 assisted sues of SME managers are, and they enjoy a higher
94 High-Impact Innovation Management Consulting Services for SMEs level of acceptance than those consultants that lated issues will be assessed and measures devel- have never had practical experience in an SME en- oped to best address these needs within the innova- vironment. This also helps to keep elderly members tion eco-system. This may include the development of the workforce in employment. of an Innovation Management education programme at the local academic institutions, best practice vis- At the same time the network of IMP³rove trained its at SMEs or benchmarking studies comparing the Innovation Management support providers serves Innovation Management performance of clusters or as a platform to further develop the innovation industry sectors from different countries. eco-system, maintain the awareness and knowl- edge on Innovation Management as key driver for Due to the fact that IMP³rove has already estab- competitiveness. A key benefit here is the common lished a wide international network experts on language and understanding of Innovation Man- specific areas can be easily recruited to provide agement based on the IMP³rove Approach, and the necessary initial support and also to estab- the Innovation Management support that builds on lish international connectivity of local innovation value-creation and impact. eco-systems. 7.3.6 CREATING THE IMP³ROVE POWERED 7.3.7 ASSESSING THE NEED FOR INNOVATION ECO-SYSTEM ESTABLISHING THE IMP³ROVE POWERED INNOVATION ECO-SYSTEM Long-term impact of publicly funded programmes on innovation and competitiveness will increase if Lack of integration of SMEs, intermediaries, sup- there is a well-established innovation eco-system port providers, financial actors and academic insti- in place that will maintain momentum in the devel- tutions, indicates the need for establishing an in- opment of SMEs. To further develop regional or na- novation eco-system. The frequency and intensity tional innovation eco-systems, IMP³rove provides of collaboration between SMEs, clusters, universi- support services that focus on networking within ties, financial actors, policy makers and media to different stakeholder groups as SMEs, consultants, promote innovation and competitiveness should be innovation agencies, intermediaries, financial ac- at least on a level that momentum is created to in- tors, academia, and policy makers. volve more and more SMEs in joint activities on im- proving their Innovation Management performance The Concept of an IMP³rove Powered Innova- on a sustainable basis. Experience shows that one- tion Eco-System time interaction of SMEs with the other stakehold- ers is not sufficient. Therefore, regular networking The IMP³rove powered innovation eco-system and collaboration activities should be in place with builds a network of different stakeholders active a clear target on tangible results for the SMEs. in Innovation Management based on a common These results could include SMEs hiring a university internationally proven approach. Key principles are graduate as Innovation Management assistant or creating value based on Innovation Management, participating in the IMP³rove Award. establishing sustainable In-novation Management support, and continuously measuring the impact of Scoping the Need for Networking Support to the innovation eco-system on the innovation and Establish an Effective Innovation Eco-System competitiveness performance of the involved SMEs. The concept includes the transition to a sustainable Defining the centres of “gravity” provides the num- innovation eco-system. ber of locations where networking activities should take place. The frequency, intensity and scope of Regular events such as IMP³rove Roundtables, the networking activities have to be defined based IMP³rove Symposia, and IMP³rove Workshops and on the existing activities. If there is already an Webinars will bring together very different stake- academic institution that offers education and re- holder groups and present new insights not only search on Innovation Management then this could from IMP³rove Research, best practices of SMEs in build the basis to establish innovative online and Innovation Management, but also from external In- off-line activities to further develop the local inno- novation Management experts to increase the pro- vation eco-system with high involvement of SMEs. ficiency of service providers, policy makers, finan- Alternatively, clusters, chambers of commerce, fi- cial actors as well as the innovation performance nancial actors, trade associations or value chains and competitiveness of SMEs. will be leveraged to build the platform for the in- novation eco-system. Experience shows that the At the same time the need and demand of SMEs on continuity of these activities is essential to have Innovation Management support and innovation re- a long-term impact.
High-Impact Innovation Management Consulting Services for SMEs 95Steps for Developing an IMP³rove-powered creating transparency on his Innovation ManagementInnovation Eco-system activities and results. Case examples, best practices and access to the Innovation Management bench-First of all the objective of the IMP³rove powered in- marking with the SMEs’ competitors are just some ofnovation eco-system has to be defined and agreed. the topics customized to the needs of SMEs.Tangible and measurable targets have to be set inorder to measure the impact of the innovation eco- These topics will be underlined with testimoni-system. Such targets should include the number of als from highly innovative SMEs that demon-SMEs involved, the growth rate of these SMEs in strate the full benefit of IMP³rove services suchterms of employment, internationalization etc. Then as the IMP³rove Assessment as basis for a sys-the key stakeholders that should play an active role tematic improvement programme for the SME’sin the innovation eco-system need to be identified competitiveness.and mobilized. Their specific role and tasks have tobe clarified as well as the way how they can in- IMP³rove – SME Workshops are offered in variousteract in the most effective manner that there is modes:momentum for further developing the knowledgeon Innovation Management and competitiveness • Presentation on: Introduction to Inno-especially at SMEs. Finally the impact of the inno- vation Management as key driver forvation eco-system has to be measured and where competitivenessnecessary counter measures implemented. • Presentation on: Introduction to Innovation Management as key driver for competi-Benefits of an IMP³rove powered Innovation tiveness plus the benefits of an IMP³roveEco-System Assessment • Introduction to the IMP³rove ApproachThe key benefit of a well-functioning IMP³rove pow- • Introduction to the IMP³rove Approach andered innovation eco-system is its momentum in first steps to start the IMP³rove Assessmentactively involving SMEs in Innovation Management • Presentation on the results from theissues as source for competitive-ness. With an IMP³rove Assessment and afterwards in-IMP³rove powered innovation eco-system a com- dividual feedback based on the IMP³rovemon language for all stake-holders is given as well Benchmarking Reportas the focus on value-creation and impact for eachof the members in the eco-system. Alignment of Highly qualified IMP³rove Consultants will provideactivities of the various stakeholder groups will re- insights on results from projects where the Innova-sult in demand driven support such as local educa- tion Management performance of an SME has beention programmes for SME staff in Innovation Man- improved.agement, academic research driven by SME andtheir development issues, support services from in- Other set-ups for the IMP³rove – SME Workshopstermediaries, consultants, clusters and innovation are offered based on the specific requirements ofagencies that create value and sustainable growth the institution organizing this event.for SMEs. Co-sponsoring of the IMP³rove – SME7.3.8 IMP³ROVE – WORKSHOPS FOR SMES WorkshopsAll innovation support programmes addressing These SME workshops can be co-sponsored by lo-SMEs face one common challenge: How to reach cal intermediaries, such as innovation agencies, de-the SMEs. Often the topic “Innovation Manage- velopment agencies, cluster managers, technologyment” or even “Innovation” seems less relevant to park managers, trade associations, industry confed-SME managers compared to the basic day-to-day erations, chambers of commerce or financial actors.operations. Integration of the IMP³rove - SME WorkshopsWorkshops for SMEs – the Concept in other IMP³rove offeringsIMP³rove has already accessed more than 3000 The IMP³rove SME workshops can be offeredSMEs across Europe and beyond. A key differentiator in combination with various other offerings ofhere is that IMP³rove builds on impact and value for IMP³rove such as:the SME. The SME manager is concerned about thecompetitiveness of his company. Therefore, IMP³rove • IMP³rove – Assessmentshows how he can secure his company’s future by • IMP³rove – Audits
96 High-Impact Innovation Management Consulting Services for SMEs • IMP³rove Award workshops in several regions to create the critical • IMP³rove – Innovation Support Infrastruc- mass. ture Development • IMP³rove – Voucher Schemes The Benefits of the IMP³rove – SME Workshops The main purpose of the IMP³rove - SME workshops The IMP³rove – SME Workshops offer is to gain access to SMEs and to convince them of the importance of Innovation Management for their • SMEs a learning experience how to increase own competitive performance. their own competitiveness • SMEs networking opportunities with other Assessing the Need for IMP³rove – SME SME managers who have benefitted from Workshops the IMP³rove approach • Innovation Support providers access to Too many old and rather small companies are SMEs based on a proven European Approach a first indicator for low Innovation Management • National and regional agencies the Euro- performance and competitiveness of the SME pop- pean view on Innovation Management and ulation in a specific region or country or in a spe- its impact on competitiveness cific industry sector. SMEs complaining about the • National and regional agencies an approach competitive pressure from international competi- to increase the proficiency in Innovation tion are another indicator as well as the decline in Management at SMEs tax revenues. Here IMP³rove - SME workshops can • Intermediaries such as cluster managers contribute to create awareness for the urgency and the possibility to offer additional services for measures to respond to the decline and to the and insights competitive pressure. • Reference to a proven European approach as basis for establishing a national or re- Scoping the Need for SME Workshops gional “standard” approach • The basis for further developing the com- Depending on the budget and urgency the number petitiveness of the national or regional and frequency of SME workshops can be defined. To economy allow for high involvement of the SMEs participat- ing in the IMP³rove-SME work-shops there should 7.3.9 IMP³ROVE WEBINARS FOR VIRTUAL be about 30 SMEs per workshop. The demand from WORKSHOPS AND CONFERENCES SMEs will be higher if there is a clear benefit linked to the participation in the workshop. Therefore, the With modern technology virtual workshops and SMEs will get insights in their competitors’ activities conferences on Innovation Management have been and performance. As a follow-up activity support successfully implemented by IMP³rove for aware- during the IMP³rove Assessment can be provided. ness creation, education, and networking. Steps for Preparing IMP³rove-SME Workshops IMP³rove Webinars – the Concept First, the organizing agency should clarify the ob- IMP³rove webinars are usually planned as a series jectives of the IMP³rove-SME workshop before in- of events to achieve the objectives defined and sup- volving other organizations that SMEs trust and port the networking and interaction between the before inviting SMEs at all. The benefits for the stakeholder groups. They are a supporting means SMEs should be clearly stated as well as the ex- to stay connected without the effort of travel time pected contribution and active involvement of the and cost. Webinars can never replace the benefits SMEs and potential other stakeholders. An outlook of face-to-face meetings. Training via webinars on the follow-up activities should be provided to proved to be ineffective for the IMP³rove training put the IMP³rove-SME workshop into perspective programme. However, IMP³rove webinars increase as one activity in the context of a well-designed efficiency and knowledge-sharing, networking, con- programme. tinuity of relationships and involvement of different stakeholders. These workshops need to be organized in close col- laboration with institutions that have excellent ac- Assessing the Need for IMP³rove Webinars cess to SMEs. They need to communicate the ben- efits of these workshops to SMEs and create the Disperse stakeholder groups that have not yet col- demand from the SMEs. The aim should be a se- laborated sufficiently on Innovation Management ries of workshops in a defined region or a series of related topics or Innovation Management topics
High-Impact Innovation Management Consulting Services for SMEs 97that have not yet been well under-stood by de- of defined topics. They also increase connectivityfined target groups are indicators for the need of within the participants and secure continuity ofIMP³rove Webinars. Furthermore, lack of awareness interaction within a de-fined group of Innovationof Innovation Management as important issue, lack Management professionals. IMP³rove Webinarsof knowledge in Innovation Management topics in focus on tangible results and are based on long-general or lack of coordination between the players term experience with this medium both for ratherin the innovation eco-system as well as limited trav- small groups as well as for webinars with a largeel budgets and time are all obstacles that IMP³rove international community. Based on this experiencewebinars might bridge in a very valuable way. IMP³rove provides recommendations on the timing, frequency, design and content of the webinars.Scoping the Frequency and Target Groups ofIMP³rove Webinars 7.3.10 INNOVATION MANAGEMENT SUPPORT SERVICES ALONG THEIMP³rove experience shows that the webinars should VALUE CHAINmaintain continuity of the information flow and ex-clusivity that the participants see a value in being Given the fact that SMEs are difficult to mobilizemember of this community. Therefore, the number IMP³rove has identified three drivers that motivateof participants should be limited according to the SMEs to participate in innovation and competitive-purpose of a webinar. If the objective is pure dissem- ness programmes:ination of information than the number of partici-pants can be higher. Usually the purpose of a webi- • Public funding, which is the least sustainablenar includes the interaction among the participants, • Financingand then the number should correspond with the in- • Customer demand, which has the highesttensity of interaction. 60 participants are perceived impactas maximum when there is a defined small group ofpresenters that interact while the others listen. Building on the fact that SMEs tend to listen to their customers, IMP³rove has developed the Supplier In-The frequency of webinars should secure continuity novation Management Assessment approach.in the interaction of the participants. Depending onthe aim of the programme IMP³rove webinars can Innovation Management Support Servicesbe scheduled to bridge the gap between face-to- along the Value Chain – the Conceptface meetings, or allow for coordination on shortterm in urgent matters or provide progress report Companies that are operating in the business toon large programmes that require significant coor- business sector highly depend on their businessdination within the various parties. customers’ demand. Even well-managed compa- nies state that they don’t know enough about theirIMP³rove webinars are an excellent means to con- customer specific needs and vice versa the custom-nect members of different target groups, e.g. rep- ers don’t know enough about their suppliers’ inno-resentatives of clusters with consultants, develop- vation capacity. Therefore, the concept of Innova-ment agencies, financial actors etc. – often on an tion Management along the value chain has beeninternational scale. developed by IMP³rove. This includes the IMP³rove Innovation Management assessment for the SMESteps for Preparing IMP³rove Webinars and then rolls it out to the SME’s suppliers who of- ten also are SMEs. Bringing customer and supplierThe organizing authority should clarify the objec- together and discussing the various dimensions oftives and target groups of the IMP³rove Webinars, the “A.T. Kearney House of Innovation”, that is theand how they will create value for the participants. basis of the IMP³rove Assessment, reveals com-The invitation to the IMP³rove Webinars including the pletely new perspectives for the suppliers and theagenda and the technical details to connect success- customers how to better align their innovation ac-fully need to be provided in due time. Technical sup- tivities for mutual benefit.port for participants who have difficulties to connectshould be provided prior to the IMP³rove Webinar. The supplier can integrate challenges that the cus- tomer is facing into his own innovation life-cycleBenefits of IMP³rove Webinars process and turn the challenge into ideas that be- come part of his idea funnel. In return, the custom-IMP³rove Webinars build on the common IMP³rove er gains much better understanding in which areasapproach to Innovation Management support. They the suppliers are currently putting their innovationcreate awareness and a common understanding focus on.
98 High-Impact Innovation Management Consulting Services for SMEs For national and regional policy makers this ap- of developing case examples to mobilize SMEs in proach is most effective to increase the innovation the region. and competitiveness in the geographic area they are responsible for. It is also very cost effective, as Steps to Initiate Innovation Management Im- the public funding is provided to those SMEs that provement along the Value Chain see the need for improving their Innovation Man- agement due to the expectations and pressure Key players should be identified that show an in- from their customers. This approach can be im- terest in improving their supplier Innovation Man- plemented along the entire value chain where the agement. These companies should gain an un- SMEs are operating in. derstanding of their own Innovation Management performance by completing the IMP³rove Assess- Assessing the Need for Innovation Manage- ment in the first place before they ask their sup- ment Support along the Value Chain pliers to provide an IMP³rove Benchmarking report based on an assisted IMP³rove Assessment. Based in the IMP³rove experience there is hardly any value chain where there is no need to provide Trained IMP³rove Consultants should be prepared support in improving and aligning the Innovation to assist the suppliers in performing the assisted Management. Therefore it is essential to identify IMP³rove Assessment. those value chains where the urgency is especially high. At the same time the interest of at least one Benefits from Innovation Management Sup- key player in the value chain needs to be very high port along the Value Chain to improve their Innovation Management perform ance in order to meet explicit customer demand. Innovation Management support along the value chain increase not only the innovation perform Depending on the scope of the public programme, ance and competitiveness of individual enter- the need for support might be limited to the value prises, but of interlinked companies. The “domino chains within a cluster or in the other extreme to effect” will create a push and a pull demand for global value chain in which the regional or national better Innovation Management and better Innova- SMEs are embedded. tion Management support. This in turn will improve the sustainability of the regional or even national Scoping the Support in Innovation Manage- economy. ment Support along the Value Chain The dynamics of this approach is demand driven The public support should concentrate on the and less driven by public funding where beneficiar- awareness creation and communication of the ies often don’t see an actual demand for them- benefits resulting from the alignment of the SME’s selves. This increases the likelihood that companies own Innovation Management with their customers’ will embed Innovation Management improvements demand and with their own suppliers. These aware- into their regular management activities on a sus- ness creation activities can take place by presenting tainable basis and not just because there is publicly successful pilots. Public funding should focus less funded support. on financing the consultants helping the SME to im- prove their Innovation Management performance. 7.3.11 IMP³ROVE RESEARCH ON DEMAND The re-sources here should come from increased sales. The customer will intensify their relationship Insights on the Innovation Management perform with the SME once their needs have been better ad- ance of SMEs from specific industries, specific age dressed by the supplier. or size classes as well as from specific countries or regions can be provided if a statistical rel- Usually there are larger and smaller companies in- evant number of these SMEs have completed the volved in the value chain. Public support still can be IMP³rove Assessment. Research results on the limited to SMEs while larger companies in the value performance of these SMEs in the various dimen- chain are expected to be able to take measures for sions of Innovation Management are presented on improving their Innovation Management at their demand. In addition, impact of Innovation Manage- own expense. The SMEs in the value chain will get ment support in Europe can be assessed based on qualified support by trained Innovation Manage- the IMP³rove experience in establishing an interna- ment consultants to further develop their Innova- tional network of Innovation Management support tion Management and better integrate it with their providers for SMEs. Examples of IMP³rove research customers and their suppliers. This support can be results are provided on the IMP³rove platform co-funded by the public programme in the sense www.improve-innovation.eu.
High-Impact Innovation Management Consulting Services for SMEs 99Assessing the Need for Research on SMEs’ In- be designed. The team of the IMP³rove – Europeannovation Management Performance Innovation Management Academy will help in defin- ing the key questions and the underlying hypoth-To customize the support programme for SMEs a bet- eses that need to be addressed by the IMP³roveter understanding of the barriers and drivers of Inno- Research results.vation Management and competitiveness is recom-mended. A hypotheses-driven approach will lead to Benefits of IMP³rove Research on Demandthe key questions that the IMP³rove “research on de-mand” should address. This could be a specific issue IMP³rove Research studies provide up-to-date in-such as internationalisation or design management sights on Innovation Management performanceas driver for innovation and competitiveness or the and activities of SMEs. The IMP³rove studies havecomparison of an SME population in one country with further developed the knowledge on drivers andthat of another country. With several thousand data barriers of Innovation Management at SMEs. Thesesets the IMP³rove database disposes of the largest studies can also provide insights on the effective-database on Innovation Management at SMEs. ness and efficiency of innovation support measures in order to derive conclusions and recommendationsScoping the Focus of the IMP³rove Research for increasing the effectiveness of future supporton Demand programmes. The insight that some years ago many policies focused on the front end of the innovationTogether with the representatives of the IMP³rove - process neglecting the focus on results from Inno-European Innovation Management Academy the fo- vation Management led to the refinement of sup-cus of the IMP³rove Research activities as well as the port programmes. Now they are putting a strongerlevel of detail will be defined. It will also be defined focus on measuring the increase of competitivenesswhether there is already a sufficient number of valid of SMEs from those support programmes.datasets available in the IMP³rove Benchmarking da-tabase. If not, then the recruiting of SMEs in this area 7.3.12 EXAMPLES FOR IMP³ROVE – BASEDis recommended prior to the research activities. INNOVATION AND COMPETITIVENESS PROGRAMMESSteps to IMP³rove Research on Demand IMP³rove-based innovation and competitivenessUsually there is an initial key question related to programmes have been established in differentInnovation Management and competitiveness that ways and intensity across Europe and beyond. Inneeds an answer. The better this question is de- the following some examples are described in morefined the more specific the IMP³rove Research can detail. Figure 45: Examples of IMP³rove-based Innovation and Competitiveness Programmes
100 High-Impact Innovation Management Consulting Services for SMEs In UK, Scottish Enterprise a support service provider the potential for gaining assistance from the state for SMEs and member of Enterprise Europe Net- was important; in others, the prestige of an EU ap- work, has 15 trained IMP³rove Guides since 2011. proved tool was convincing; for some others there They support SMEs in improving their Innovation was a genuine interest in gaining an insight into im- Management performance and competitiveness. proving their performance. Scottish Enterprise linked with other EU funded pro- grammes such as Eco-IP to gain access to SMEs via One of the problems which resulted from the high clusters in the area. With the IMP³rove Assessment response rate was the limited capacity to service all areas for improving the SMEs’ competitiveness can the companies. It was therefore necessary to stag- be identified and systematically developed. ger contracts with the companies and to recruit more experts to service them. In Serbia, the Enterprise and Innovation Project, which was part of Serbia’s process of application An analysis of the responses of the Serbian compa- for EU membership in 2009, had three main ele- nies showed a similar profile to that of EU compa- ments: development of expertise in the Ministry of nies. Their main difference lay in the results aspect, Economy and Regional Development, development where the hurdles faced by Serbian companies of innovation policies and assistance to 150 enter- in exporting were significant. Reporting the pro- prises. To assist in all these elements the project files back to Serbian companies and demonstrat- team chose to use the IMP³rove assessment and ing their similarities with companies in the EU was methodology. encouraging. The project aimed to make available assistance The profiles of the companies are also being fed in developing businesses to 150 companies. The into the Ministry of Economy and regional develop- IMP³rove Assessment was used as a selection tool to ment and may be useful in formulating priorities for target that assistance to the companies that could the implementation of the law on innovation. make best use of it. This did not mean that the most innovative companies were supported, but that the IMP³rove is being used as a tool for assessing assistance that was available could be targeted at companies and as an instrument for embed-ding the companies, which would make best use of it. knowledge and expertise on innovation in the busi- ness support infrastructure in Serbia. It was also At the beginning, there was doubt that a tool devel- a small element in assisting Serbia in its trajectory oped in the European Union and predominantly in for membership of the European Union. Western Europe, to the old member states, would be applicable to an economy in transition. This doubt In France, the national innovation agency, OSEO, could only be resolved by testing the assessment issued innovation vouchers under the KIS-PIMS pro- in Serbia. However, the fact that it had been used in ject. These vouchers enabled selected SMEs to buy Bulgaria, Romania and Hungary did tell in its favour. consulting services in order to strengthen the busi- ness plan for their innovation. Within this project The most supportive institution was the Serbian about 25 French SMEs were supported during the export promotion agency. They had contact with IMP³rove Assessment to identify and address their many Serbian firms with views to the outer side of needs for more systematic Innovation Management the country. They made available their database performance. KIS-PIMS aimed at designing and im- of companies and assisted in the promotion of im- plementing new funding schemes for innovative proving to those companies. service companies, with a focus on SMEs, belonging to clusters located in France, Austria and Finland. The first step was to train Serbian experts in the use of the IMP³rove Assessment. It enabled the Serbian In Germany, the support programme “go-inno” experts, who could go to companies, to help with launched by the Federal Ministry of Economics the IMP³rove Assessment, and then deliver support and Technology is a voucher programme that aims to the SMEs in the next stage. However, the training at a systematic preparation of an innovation pro- did take some time. There had to be a formal train- ject at an SME. This includes the analysis of na- ing, and then a set of pilot assessments conducted tional and international market potential, search jointly with an accredited EU expert. for suitable cooperation partners for SMEs espe- cially from academia as well as support during A surprise was the high response rate from Serbian the implementation. Accredited support providers enterprises. About one of three of the enterprises also include trained IMP³rove Guides. They sup- approached wanted to undertake the assessment. ported the SMEs in innovation audits based on the This was for a variety of reasons. In some cases, IMP³rove Assessment as it also provides a com-
High-Impact Innovation Management Consulting Services for SMEs 101parison with the national and international com- 7.4 List of Abbreviationspetitors of the SME. BU Business UnitIn Hungary, the National Development Agency has DG Directorate Generalannounced an innovation and competitiveness pro-gramme for SMEs in 2011. Vouchers are provided EU European Unionto SMEs for support based on a scoring model. A IP Intellectual Propertyscore of 100 has to be reached to be eligible forthis voucher programme. By submitting a validat- KIS Knowledge Intensive Servicesed IMP³rove benchmarking report 20 out of 100 KPI Key Performance Indicatorscores can be achieved. This puts the IMP³rove As-sessment in a very prominent position. R&D Research and Development RoS Return on SalesFor the National Development Agency also thequalification of the support providers is essential. SME Small and Medium-sized EnterpriseTherefore, they intend to launch a training pro- SqM Square Metergramme for this target group. The aim is to have200 local IMP³rove Consultants trained at least USP Unique Selling Propositionon Expert level I available to assist the SMEs inthe IMP³rove Assessment and during the improve-ment phase when the identified gaps have to befilled.In Egypt, ITIDA the Information Technology IndustryDevelopment Agency decided in 2009 to use theIMP³rove Assessment to select the best small andmedium sized IT companies for a special supportprogramme. Staff members of ITIDA were trainedin the IMP³rove Approach to support the SMEs. Theagency then also organized breakfast meetingswhere they addressed key issues for the variousdimensions of Innovation Management that arecovered in the IMP³rove Assessment. Thus they in-creased the knowledge about Innovation Manage-ment at SMEs and at the same time gained insightsin the Innovation Management performance andcompetitiveness of SMEs in the IT sector.In Australia, the Queensland University of Technol-ogy (QUT), School of Design, in Brisbane decidedto collaborate with the Queensland ManufacturingInstitute (QMI) to help SMEs improve their com-petitiveness. More than 10 staff members of theQMI are trained IMP³rove Guides. With financialsupport of the national government SMEs are as-sisted during the IMP³rove Assessment and thenalso during the phase of improvement of theircompetitiveness. For the QUT the results from theIMP³rove Assessments build the basis for furtherresearch on Innovation and Innovation Manage-ment related issues. By joining forces between anacademic institution and an agency with accessto SMEs an innovation eco-system is developedbased on IMP³rove as a common approach. Thishelps to align the activities of the different playersand allows for effective learning in the area of In-novation Management.
102 High-Impact Innovation Management Consulting Services for SMEs 7.5 List of Figures Figure 1: Short History of IMP³rove 8 Figure 2: Overview of IMP³rove Innovation Management Support Services 9 Figure 3: Average Yearly Firm Performance (Young versus Old SMEs in the Sample) 11 Figure 4: Number of Firms per Size Class (Comparison of Young and Old SMEs in the Sample) 11 Figure 5: Income Growth across Different Size Classes (Comparison of Young and Old SMEs in the Sample) 12 Figure 6: Share of Income from Innovation across Different Size Classes (Comparison of Young and Old SMEs in the Sample) 13 Figure 7: Yearly Profit Growth of Different Size Classes (Comparison of Young and old SMEs in the Sample) 14 Figure 8: Percentage of SMEs in the Sample with no Innovation Strategy (in %; Across Different Age Classes; Status as of November 2011) 15 Figure 9: Perception of Short-term and Long-term Impact of Innovation Management Consulting by SMEs (IMP³rove Database; Status as of October 2009) 16 Figure 10: Distribution of Consulting Services of IMP³rove Consultants as Percentage of 568 Associated Consultants (IMP³rove Database; Status as of September 2011) 18 Figure 11: Other Fields of Activities of Associated IMP³rove Consultants (Based on 568 Consultants; IMP³rove Global Coordination Team; Status as of September 2011) 19 Figure 12: Distribution of IMP³rove Consultants across Different Organisation Types (IMP³rove Database; Status as of September 2011) 20 Figure 13: Service Profile – Comparison of Private versus Public Organisations (IMP³rove Global Coordination Team, Status as of September 2011) 21 Figure 14: Classification of IMP³rove Intermediaries by Type of Organisation (Status as of September 2011) 21 Figure 15: Services Offered by Intermediaries based on the IMP³rove Platform (Status as of September 2011) 22 Figure 16: Services Offered by Intermediaries by Type of Organisation based on the IMP³rove Platform (Status as of September 2011) 22 Figure 17: Distribution of Services by Intermediaries by Country (IMP³rove Database; Status as of September 2011) 24 Figure 18: Overview of Intermediaries’ Support Services with Explicit Focus on Innovation Management; Figures in Percent of Intermediaries Offering this Service (IMP³rove Database; Status as of September 2011) 25 Figure 19: Overview of Intermediaries’ Support Services without Explicit Focus on Innovation Management; Figures in Percent of Intermediaries Offering this Service (IMP³rove Database; Status as of September 2011) 26
High-Impact Innovation Management Consulting Services for SMEs 103Figure 20: A.T. Kearney House of Innovation 30Figure 21: Innovation Strategy Development Process 31Figure 22: Patterns in Innovation Culture 32Figure 23: Innovation Life-Cycle Management 33Figure 24: IMP³rove Innovation Management Consulting Process 35Figure 25: Value Creation During All Phases of the Consulting Process 37Figure 26: Analytical Approach from Facts to Recommendations and Actions 38Figure 27: Shift in Value Propositions 40Figure 28: Interoperability of the A.T. Kearney House of Innovation and Other Tools 41Figure 29: Overview of Case Examples 43Figure 30: Old Value Chain 46Figure 31: New Book-on-Demand Value Chain 46Figure 32: Results for Digital Royal: Enabling Factors in the IMP³rove Assessment 50Figure 33: Description of the General Innovation Management in Eidon (Starting Situation) 55Figure 34: Description of the General Innovation Management in Eidon (Current Situation) 56Figure 35: The Aluminium Forest accompanying the A2 Highway, Eindhoven (Photos by Van Campen) 61Figure 36: Left: a Specially Developed Production Method for the Unique Sound-barrier Tubes (dedicated punching machine). Right: Production (Photos by Van Campen) 62Figure 37: Overall Innovation Management Performance (Starting Point) 64Figure 38: Overall Innovation Management Performance by the Various Dimensions (Starting Point) 65Figure 39: Overall Innovation Management Performance (After Implementing an Innovation Strategy) 65Figure 40: Overall Innovation Management Performance by the Various Dimensions (After Implementing an Innovation Strategy) 66Figure 41: Steps from IMP³rove Assessment to an Action Plan 70Figure 42: Tinsely Bridge Ltd. Manufacturer of Automotive Components 71Figure 43: Innovation Management Consulting Impact 76Figure 44: Overview of the Case Examples by Dimension of the A.T. Kearney House of Innovation 79Figure 45: Examples of IMP³rove-based Innovation and Competitiveness Programmes 99
European CommissionHigh-Impact Innovation Management Consulting Servicesfor SMEs Including Case StudiesLuxembourg: Publications Office of the European Union2012 — 103 pp. — 21 x 29.7 cmISBN 978-92-79-25007-1doi:10.2769/3826
Europe INNOVA PapersPAPER N° TITLE NB-N° 1 Innovation Clusters in the 10 new Member States of the Euro- NB-AW-04-001 pean Union €15 2 European Innovation Management Landscape - 3 Europe INNOVA Annual Report 2006 - 4 Towards a European strategy in support of innovation in ser- NB-AW-07-004 vices: Challenges and key issues for future actions 5 Innovation Clusters in Europe: A statistical analysis and over- NB-81-07-100 view of current policy support 6 Addressing Challenges for High-Growth Companies: Summary NB-AW-07-006 and Conclusions of the Europe INNOVA Gazelles Innovation Panel 7 Europe INNOVA Annual Report 2007 - 8 Sectoral Innovation Watch – synthesis report NB-AW-08-008 9 The role of clusters and cluster policies and their role for NB-NA-23-591 competitiveness and innovation: Main statistical results and lessons learned 10 Insights on innovation management NB-NA-23-470 11 Europe INNOVA Annual Report 2008 - 12 EU Cluster Mapping and Strengthening Clusters in Europe NB-NA-23-903 13 Europe INNOVA Annual Report 2009 - 14 IMP³rove: A European Project with Impact - 50 Success Stories NB-NA-24-180 on Innovation Management 15 Europe INNOVA Annual Report 2010 - 16 Priority Sector Report: Creative and Cultural Industries NB-NA-24612 17 Europe INNOVA Annual Report 2011 18 IMP³rove:High-Impact Innovation Management -Consulting NB-NA-12-001 Services for SMEs -Including Case Studies The Europe INNOVA papers are available for download at: http://www.europe-innova.eu/web/guest/publications/europe-innova-papers
How to obtain eu publications Free publications: • via EU Bookshop (http://bookshop.europa.eu); • t the European Union’s representations or delegations. You can obtain their contact a details on the Internet (http://ec.europa.eu) or by sending a fax to +352 2929-42758. Priced publications: • via EU Bookshop (http://bookshop.europa.eu). Priced subscriptions (e.g. annual series of the Official Journal of the European Union and reports of cases before the Court of Justice of the European Union): • ia one of the sales agents of the Publications Office of the European Union v (http://publications.europa.eu/others/agents/index_en.htm).ENTERPRISE & INDUSTRY MAGAZINEThe Enterprise & Industry online magazine (http://ec.europa.eu/enterprise/magazine) covers issuesrelated toSMEs, innovation, entrepreneurship, the single market for goods, competitiveness andenvironmental protection, industrial policies across a wide range of sectors, and more.The printed edition of the magazine is published three times a year. You can subscribe online(http://ec.europa.eu/enterprise/magazine/print-edition/subscription/index_en.htm)to receive it – in English, French, German or Italian – free of charge by post.