An interview with Professor Uwe Dittmann, Steinbeis Entrepreneur at the Steinbeis Transfer Center for Marketing, Logistics and Company Planning at Pforzheim University
Uwe Dittmann and his team are building a network of companies in the Pforzheim, Enz County, and Northern Black Forest region with the aim of providing support with the application of artificial intelligence (AI) in all areas of everyday business. He therefore saw our recent interview as a valuable opportunity to polish his own understanding of knowledge management in advance – with the support of AI, in this case ChatGPT, and with the required degree of objectivity, of course.
Hello Professor Dittmann. For you, what are the key characteristics of innovation systems?
Innovation systems thrive on complex interactions between different stakeholders – which can be companies, universities, research institutes, institutions such as Steinbeis, but also public authorities. When we think about innovation systems within companies, we’re referring to interactions between different areas or departments. Although there’s a whole collection of attributes that define innovation systems, I believe the most important points are innovation management and the infrastructure. The latter includes things like software, which can be used to capture, track, and evaluate ideas and, among other things, promote collaboration and communication within the innovation process.
The third aspect that I think’s worth mentioning is resources, because innovation takes time and people. This is where the culture of innovation within the company is really important. It should actively encourage staff to be creative and take risks, and allow people to make mistakes and not be blamed for doing that. It’s also important to have incentive systems, such as reward systems in the form of bonuses or benefits, to encourage staff to submit their ideas. Another key aspect is project management, because innovations also require a certain degree of planning in the form of milestones, to define when decisions have to be made by. Also, resources have to be planned and risks assessed. And then there’s knowledge management, which also plays a crucial role because you need know-how to innovate, so you also require knowledge tools. In the same context, staff training is important – and methods such as design thinking are needed to foster creativity and add structure to how knowledge is applied.
All innovation systems involve interaction between different stakeholders, so they depend on collaboration and networking – and it doesn’t matter whether that involves different departments within the company or external partnerships. But of course you also need unambiguous criteria to determine what makes a successful innovation process. And – last but not least – you need a vision. When you’re dealing with an innovation system in a company, you need to clearly communicate what the goal is, because then and only then can a company decide whether an innovation will help achieve that goal.
What factors would you say determine whether an innovation is a success, but also a failure?
One of the most important success factors is close and effective collaboration between different stakeholders, because without that, resources aren’t put to use where they should be. Second, I would say, come financial resources – without which no system is in a position to support innovation. And the third factor is highly qualified workers, organized into innovation teams and working on an interdisciplinary level. Then there are other aspects, of course – open communication and trust, including constructive feedback, as well as time and space for innovation. There are already certain tools that help with this, such as the Scrum method.
Overall parameters, such as administrative hurdles and legal requirements, also play an important part in whether an innovation is a success or a failure. That said, there are also external partnerships, which play an important part when it comes to coming up with, developing, and introducing innovations – thanks to new know-how, novel ideas, or additional resources. But most importantly, an innovation system must be based on a clear strategy.
Coming back to something you just mentioned, what role does knowledge play as a factor in this?
Knowledge is crucial, because innovations are derived from knowledge. I believe there are three important aspects to this. There’s specialist knowledge, i.e. technical and scientific know-how, then there’s knowledge relating to the market and trends in that market, and the third is knowledge of customer preferences and consumer behavior. Of course, it’s rare to find individuals with an understanding of all three areas, so you have to bring different people on board to cover all bases.
Critical thinking and business acumen are also important, because innovation always entails a certain degree of risk. So you also need an understanding of this. Innovations invariably involve change, which is why a knowledge of change management is needed within innovation systems. The next aspect is knowing your own competencies, any other competencies you need to deliver innovations, and where to acquire that know-how – by which I mean networks. This is where, among others, the Steinbeis Network is able to help with its extensive expertise.
To ensure all these different types of knowledge remain up to date, and always will do, you need the willingness to engage in lifelong learning and, above all, to keep adapting to different challenges and continue developing.
If you think about innovation systems from the perspective of business leaders, what challenges do companies face at the moment, especially SMEs? And what can companies do to deal successfully with those challenges?
The first challenge is securing funding for research and development. One way to do this is to generate funds through your own means, but there are also lots of funding programs – through the state, on a federal level, and through the EU. That said, submitting applications and the procedures are often quite complex, so you often have to bring in external experts. It’s important that companies make use of the advisory services on offer. The second challenge is about finding people with the right skills to take on certain tasks – so I’m referring to the shortage of skilled workers. It’s important for companies to develop a strategy to attract the skilled workers they so urgently need – and, just as importantly, that they’re in a position to keep them.
And then, all companies have to adapt to continual changes in market requirements and technology – to ensure they remain competitive and future-proof. For example, one way to do this is to continuously monitor markets with the help of a market research system that constantly pinpoints trends, identifies customer needs, and captures competitive developments. This is also an area where SMEs can turn to external expertise. It’s important that companies understand why they need this kind of research. Although it’s not enough to simply assess the findings, companies also have to do something with those findings. To do that, you need strategies that are versatile enough to adapt to changing circumstances. You have to work up different scenarios and the measures you will require for them.
You also need to focus on promoting innovation within the company. What’s needed is a culture of innovation, hand in hand with corresponding research and development budgets and the required resources. You should also not ignore the possibility of bringing in expertise from outside the company. SMEs have particular benefit to gain from networks. The next point is that it’s important for the structure of organizations to be agile so they can react quickly to new challenges. I’ve already mentioned aspects such as staff training and risk management.
To deal with all of these challenges, companies thus need a clear innovation strategy – one that people at the company are aware of; one that takes partnerships with the right stakeholders into account, such as research institutions and other companies; one that deploys resources with specific goals in mind; one that also promotes ongoing staff development.
SMEs often struggle to grasp this – especially in these times of skills shortages, rising energy prices, and multiple crises. So it’s not surprising that attention levels have decreased among a lot of SMEs – as well as their willingness to grapple with the topic of innovation. Given this, it’s becoming all the more important that there are networks for SMEs to develop and implement innovations together – with other partners.
Contact
Prof. Uwe Dittmann (interviewee)
Steinbeis Entrepreneur
Steinbeis Transfer Center Marketing, Logistics, and Company Planning at Pforzheim University (Pforzheim)
223076-29