How to Deal with Innovation Management When You Are Small?

Innovation is frequently marketed as driver of growth and prerequisite for remaining competitive. However, the process is often risky, especially for small or medium sized enterprises in search of ways to successfully manage their new products, services or businesses in a systemic and stable manner. Luckily, tools such as the “A.T. Kearney House of Innovation” are available to lend an essential helping hand.

Innovation is marketed as key driver for growth and a must to gain recognition and remain competitive. However, innovation is a risky business. When you manage a small or medium sized company you know that you have to innovate yet you cannot afford to take too much risk. In times of crisis most companies become even more risk-averse. Therefore, companies look for insights in what needs to be done to successfully manage innovation in a systematic manner and mitigate risk. An example of a simple, yet comprehensive approach to innovation management is the “A.T. Kearney House of Innovation”. The tool covers all dimensions of innovation management – and most important – it focuses these dimensions on the sustainable growth from innovation.

Figure 1: The “A.T. Kearney House of Innovation”

Click to enlarge

These dimensions of innovation management are, in turn, interlinked.

Growth oriented companies create an innovation strategy to:

  • Set themselves growth targets according to their level of ambition and appetite for risk and share them with their staff;
  • Define where the growth will come from to meet these targets;
  • Fill their innovation pipeline in line with the growth targets.

Furthermore, this innovation strategy is defined by the capabilities of the organisation and by its culture. At the same time, a more ambitious innovation strategy can also trigger organisational and cultural change. If the innovation strategy foresees growth from internationalisation the ability to enter new markets will require new skills as well as different marketing and sales structures. Technology-driven innovation will require education and training of the staff to successfully manage the innovation projects and the innovation lifecycle. In this sense, the organisation and culture are the lubricant to turn the innovation strategy into action. Hence, growth oriented companies:

  • Prepare their organisation for change and innovation;
  • Develop a learning environment;
  • Embrace new ideas no matter where they come from.

The organisation is driving the innovation lifecycle. It is not only the manager/owner of the small company. The innovation lifecycle begins with the idea management, the development of the idea into a new product, service, business model or process and includes the successful launch and not to forget the continuous improvement of the innovation. Growth oriented companies measure the time from the idea development to the successful launch (time-to-market) as well as to the break-even point (time-to-profit).  The latter indicator is most important to get transparency on the success of the innovation. Moreover, growth oriented companies have, on average, 30% shorter time-to-market than their competitors as the IMP³rove¹ database of more than 1,600 SMEs shows.

This means that these companies are much earlier on the market with their innovation results and get revenues up to three months earlier than their competitors. They leverage innovation enabling factors such as project management, controlling of the innovation projects, etc.

Growth oriented companies also measure the revenues and profit that they gained from their innovation projects. Transparency on the innovation spent helps improve the resource allocation and eliminate inefficiencies in the various phases and activities of the innovation management. Growth-oriented companies measure:

  • The improvements they achieved in their time-to-profit;
  • The contribution to sales and profit from the various innovation projects.

Small and medium sized enterprises can assess their own innovation management by benchmarking themselves with the growth champions. More than 3000 companies have already used the IMP³rove online assessment.  It compares the company’s own innovation management performance with that of their competitors along the above mentioned five dimensions of innovation management.

Feedback from SMEs that have used the IMP³rove benchmarking tool states that it:

  • Offers an excellent learning experience for SMEs by enabling them to understand the different aspects of innovation management and how they influence the company’s competitiveness;
  • Provides a detailed and actionable benchmarking report that presents the benchmarks from the own organisation, the average and the growth champions;
  • Increases the transparency on the competitive environment the SME has to deal with.

For small companies in particular, it is rather difficult to gain practical insights into state-of-the-art innovation management and the competitive environment. With the IMP³rove Approach, it is an investment of approximately half a day to collect the required data and complete the benchmarking questionnaire – time that is well invested for further developing one’s own innovation management performance, secure one’s business and develop new strengths in responding to an ever changing environment.

Benchmarking your own innovation management performance – and taking action where needed, reduces your risk of becoming a laggard in your markets or even worse: being beaten by the economic crisis.

By Kai Engel and Eva Diedrichs

Benchmarking your innovation management capabilities


The IMP³rove – European Innovation Management Academy offers online benchmarking on innovation management at www.improve-innovation.eu. The IMP³rove benchmarking report provides small and medium sized companies with new insights on their innovation management capabilities compared to their competitors indicating the gap to the growth champions and the average.

Figure 2: IMP³rove Assessment overview on the benchmarking results. Source: IMP³rove Benchmarking Report.

The steps to receive an individual benchmarking report are simple:

  1. Register your SME on the IMP³rove website
  2. Complete the registration form
  3. Complete the IMP³rove Assessment questionnaire
  4. Request the IMP³rove Benchmarking report by selecting your preferred benchmarking sample (industry sector, country, size and age of the companies you want to compare yourself with) and your preferred language for your IMP³rove benchmarking report.
  5. Download your individual IMP³rove benchmarking report
  6. Take actions on the areas that need improvement

The IMP³rove – European Innovation Management Academy (non for profit) shall support regions to integrate the IMP³rove tools in new programs to enhance innovation management capacity of SMEs. To that end the IMP³rove – European Innovation Management Academy is supported by the European Commission, Directorate General Enterprise and Industry.

About the authors


Kai Engel is Managing Director and Partner at A.T. Kearney and leading globally the innovation and R&D Management Practice as well as the Operations Practice in DACH.


Eva Diedrichs is senior consultant at A.T. Kearney and project manager of IMP³rove and of the launch of the IMP³rove – European Innovation Management Academy (non for profit).


[1] IMP³rove is the Initiative oft he European Commission, DG Enterprise and Industry for better support in innovation management

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