The innovation management and the success of a company

Innovation is a major issue for SMEs’ progress in dynamic competitive environments. Innovation capacity allows the firm to develop and coordinate the innovation process and to use innovation input to produce innovation output. Therefore, SMEs’ innovation capacity appears to be a relevant concept in assessing SMEs’ innovation activities and indirectly assessing SMEs’ innovation performance.

Innovation activities are strongly influenced by the leader of the SME, the entrepreneur or the top managers. The entrepreneur is perceived as the main driver of innovation activities, and innovation activities depend on the entrepreneur’s vision. The entrepreneur’s characteristics tend to shape the firm.

Two characteristics seem to have a significant impact on SMEs’ innovation activities. One characteristic comprises the personal experiences, knowledge, competencies and abilities of the entrepreneur, which have a significant impact on SMEs’ innovation activities. Previous experiences and academic background can influence an SME’s innovation activities. The other characteristic includes the personality and behaviour of the owner, which also impacts the SMEs’ innovation activities, particularly with regard to the will to innovate. For instance, some entrepreneurs are not willing to take risks and will limit their firms’ innovation. Some entrepreneurs implement proactive and collaborative management programs that foster innovation and change, while others prefer to implement aggressive or protective management programs that limit innovation.

Corporate conditions for innovation seem to be a relevant dimension of SMEs’ innovation capacity. First, the culture of innovation relies primarily on individuals’ capacity to constantly enhance and support the innovation policy. This policy includes permanent communication on innovation goals, encouraging employees to formulate ideas, the consideration of potential ideas, and incentives. The recruitment of qualified human resources is a key determinant of a firm’s innovation culture.

Second, organizational structure influences innovation capacity. The flexibility and lack of hierarchy are considered to be natural strengths of SMEs’ innovation capacity. An SME’s organizational structure is one of its inherent characteristics and does not need substantial ongoing attention or investment. Thus, it is presented as second lever of importance for SMEs’ innovation capacity.

Innovation management appeared as a relevant dimension of SMEs’ innovation capacity. On the one hand, the pooling of different competencies (marketing, engineering, and management) is essential to ensuring the accuracy of the innovation process. On the other hand, the capacities to constantly manage the portfolio of innovation projects are necessary. Portfolio management is essential to permanently assess the innovation potential of the firm. The ability to end projects with no potential in their early stages is critical for SMEs’ viability. Nevertheless, efficient project portfolio management ensures the respect of quality time and reduces costs. This managerial technique allows SMEs to maximize their innovation return on investment. Human and technical resources (project management software) are used by SMEs.