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Created on 11.02.2019

From concept to marketable innovation in six steps

How can you turn a simple idea into a marketable product or service? How do you come up with an idea in the first place? Innovations present a great opportunity for SMEs to create or sharpen a competitive edge nationally and internationally. We show you how successful innovation management works.

“Problems cannot be solved with the same level of thinking that created them”, Albert Einstein once remarked. But how can companies continually adopt new ways of thinking? Especially for small and medium-sized companies, innovation seems worth striving for, but difficult to implement. It takes time, money and expertise. Running the business day-to-day leaves little time for exploring an innovation process in depth. And how can the costs of new ideas be met if their success cannot be predicted?

It’s not just the management, but also the culture that’s decisive

Innovation is an opportunity to set yourself apart from the competition. You can further enhance a product, develop a new one or make company processes more innovative. Innovation may also be part of your growth strategy. Innovation is therefore a key success factor for your company. But becoming an innovative company overnight is a tall order. Successful innovation requires a corporate culture geared to it. How receptive is the management to new ideas, for example? Are errors tolerated? Is creativity called for and promoted? Innovation management allows you to institutionalize an innovative approach at your company – but whether implementation succeeds or fails depends on you and your employees.

The six stages of the innovation process

You need to understand the innovation process to ensure successful innovation management. There are various models which divide the process into different stages. We present the innovation process in six steps.

  • Innovation is all well and good, but where, how and for what purpose do you wish to find innovative solutions? Ask yourself what your company’s strengths and weaknesses are. How can you stand out from the competition on the market. And to what extent is innovation the solution in this respect. Use the SWOT analysis tool to evaluate your company. SWOT stands for strengths, weaknesses, opportunities and threats. Compare the opportunities and strengths – your greatest potential lies here. Based on your strategy, you can enter development areas for products and services into matrices. This will allow you to define the opportunities and risks presented by new technologies and to depict market trends. A good template can be found on the federal government’s The link will open in a new window SME website.

  • Once you’ve defined development areas, the next step involves idea generation. Who will provide the ideas?How will they be gathered?How can creativity be promoted?Possible tools for institutionalizing idea generation are specific workshops, regular brainstorming sessions or collaboration with research (in other words, traditional universities and universities of applied sciences). You should also take customer feedback into account. Encourage innovative thinking, such as the ‘imagine that’ method: here you imagine what you’d do if a raw material/material was no longer available. There are generally two types of ideas that should be gathered and analysed at SMEs:

    • Ideas that are conceived on the spur of the moment and presented to the company by chance (e.g. by employees or customers)
    • Ideas that are consciously contributed (e.g. via workshops)
  • All ideas should be collected, given a brief description and submitted. You can then carry out a uniform, objective evaluation, using a grid, for example. Eliminate the innovations which are not very promising. During the evaluation process, you should always keep your customers’ needs in the back of your mind – they will ultimately decide whether your development is successful or not. Consider the following factors when evaluating ideas:

    • Strategic fit: is the idea in line with your business philosophy, your objectives, existing product portfolio and your company’s target groups?
    • What killer criteria does the idea have to meet? These include technical feasibility or legal aspects, for example. 
    • Analyse the remaining ideas based on financial figures: the return on investment can be calculated by means of a cost-benefit analysis or portfolio analysis. By asking the question “Is it a vitamin or pain relief?”, you can also work out future demand for a product or service in a pragmatic way. You’ll find out more about this in the video. 
  • Assess the best ideas in terms of their benefits, implementability and cost-effectiveness. You could use the COSTAR model, developed by the Enterprise Development Group, for your general concept, for example. Every letter represents a sub-step: 

    • C stands for customers and their requirements which you need to describe.
    • O (opportunity) allows you to determine the market potential.
    • S stands for solution. Here you should describe your product or service in detail.
    • With T for team, you describe the human resources required for implementation – this also includes partners with whom you may wish to collaborate.
    • Under A for advantages, you explain why the innovation is unique, including in comparison to the competition. Risks should also be set out under this letter. 
    • Finally, the R stands for result: here you should summarize all previous working steps.
  • How do you want to implement the selected innovation concretely? Describe how development, production and market launch should be carried out. Finally, draw up a business case. This provides a full overview of all business aspects of innovation. A checklist for the business case can be found on the federal government’s The link will open in a new window SME website.

  • Your product is ready for market – and the innovation process has been completed. At least for the time being, as thanks to your innovation management system, the next innovative idea may already be in the pipeline. Before you start focusing on developing them, you should nevertheless make sure that the last one is successful – this involves internal and external communication, sales support and quality management, for instance.

Innovation management thanks to knowledge management

It’s easier to drive forward the innovation process if the right knowledge is available at the right place and at the right time. This can be ensured through knowledge management. You need to bear the following points in mind:

  • The knowledge in your company is accessible to everyone at all times. This includes knowledge about projects, products, processes, customers, suppliers and other employees and their abilities, etc. This knowledge has to be managed with a suitable tool – such as the intranet.
  • The knowledge must be easily accessible.
  • There should not be any obstacles to “depositing” new knowledge either.
  • When projects are handed over, somebody leaves the company or a new employee joins, the knowledge is systematically transferred (here checklists, for example, can help).
  • Employees are encouraged to undergo further and advanced training and may receive financial support.

Important: innovation is based on customer requirements

You’ve now learned quite a lot about the innovation process and innovation management. You should always bear in mind that your customers’ requirements are ultimately the key factor. Make the customer’s perspective an integral part of your approach. Take the following points into account:

  • Does the innovation create customer benefits? What’s the difference to the competition and existing products?
  • Are customer requirements being taken into account? Are there various versions, such as with different features and prices, etc.
  • Is the innovation suitable for the majority of customers? Innovation shouldn’t be based on the problems of a small minority as they are ultimately the only ones who would benefit.

Innovation cannot be planned to the finest detail. You can nevertheless promote developments in your company by creating an innovation-friendly atmosphere. If you understand the innovation process, you can deploy resources in a more targeted way – and who knows, an idea may turn out to be a top seller.

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