Innovative Strength: German Industry Falls Short of its Potential

Just four percent of managers rate their company as very innovative

05-Mar-2014 - Germany

Industrial companies are regarded as exceptionally innovative – particularly German ones. However, a current study by specialty chemicals company ALTANA indicates that many managers of industry in Germany believe there is a need for action in their own companies. One reason for this is that the companies are lacking a culture of innovation. Young industry professionals are also concerned, because they are often working in environments that do not allow them to realize their full innovative potential. These are the results of a new industry innovation index for which the ALTANA Group commissioned the Forsa Institute to survey 250 senior managers and 250 young professionals in industrial companies across a range of sectors in Germany.

Around 90 percent of industry managers in Germany believe that the innovative strength of an industrial company greatly influences its economic success. However, when asked about their own companies, managers are beset by doubts. Overall, the industrial sector rates its innovative strength as good, with the ALTANA study revealing an innovation index value of 142 (any value over 100 is positive). But just two out of five managers rate their own company in the top third on a scale of 1 to 10. And just four percent award their company top marks.

“The results are surprising – German industry has plenty of room for improvement when it comes to innovative strength. In Germany in particular, we must ask ourselves how we can make better use of the potential on offer,” says Dr. Matthias L. Wolfgruber, Chief Executive Officer of the ALTANA Group.

Corporate culture not always innovation-friendly

It is very important for companies to have a culture in which innovation can thrive. “The innovative strength of a company is not solely dependent on its research and development budget,” says Dr. Georg F. L. Wießmeier, Chief Technology Officer at ALTANA. “Instead, it is the combination of many important innovation-friendly structures, values and practices that must be rooted firmly in the company.”

For example, it is important for an innovation-friendly working environment for supervisors to react positively to unusual suggestions. Breaking new ground and thinking outside the box are key to developing innovations. And yet the study shows that two-thirds of companies do not always respond favorably to ideas that deviate from the norm. According to the young professionals surveyed, only 15 percent of companies actively promote unconventional thinking and actions. And this result is confirmed by managers, with just twelve percent acknowledging widespread acceptance for employees who want to break new ground at their company. Even tools thought to be standard for driving innovation, such as a company suggestion scheme, are fully established in less than a quarter of companies.

Managers understand the problems – but lack courage to make changes

As the ALTANA study shows, managers are well aware that they are not setting the best example. Only 17 percent claim to personally make an optimal contribution to help drive innovation. And yet these decision-makers are aware of the positive effects of strong innovative strength. Of those surveyed, 41 percent believe a very high level of innovation is needed to gain a competitive edge.

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